The principal is 1, and the profit is the 0s that follow. Once the 1 is gone, no matter how many 0s there are, it is meaningless.
In 2016, on the day my company went bankrupt, I walked back and forth at the entrance of the exchange with only 50,000 yuan left. I smoked one pack of cigarettes after another, my mind conflicted: should I take this last bit of money to find a stable livelihood, or should I throw it into the then little-known bitcoin for a gamble?
In the end, I bought 8 bitcoins at an average price of 6000 yuan. At that moment, I had no idea that this was not just a gamble, but the beginning of an eight-year journey of self-cultivation.
In 2017, bitcoin experienced a crazy bull market, with an annual increase of up to 1700%. My account assets once surged to 800,000. Looking at the fluctuating numbers on the screen, I suffered from insomnia for several nights, thinking that financial freedom was just within reach.
However, the market quickly dealt me a heavy blow. In 2018, the bubble burst, and the total market value of the crypto market evaporated by 70%, with my account shrinking to 180,000. In that sleepless night of tossing and turning, I finally realized: unrealized profits are just numbers; cashing out is real money.
Three core iron rules that turned my situation around.
1. Capital preservation mindset: surviving is more important than anything else.
The biggest illusion in the crypto world is 'unlimited opportunities', while the truth is 'capital is limited'. I once watched an altcoin rise 50% in a day but participated only with a small position and quickly withdrew my principal after the rise. Later, that coin plummeted 90%, and because I had already recovered my principal, I was still able to make a small profit.
Those who survive in the crypto world understand one principle: preservation of capital is not cowardice, but a way to ensure you are still in the game when big opportunities arise. The market is never short of stars; what it lacks are those who can last.
I now set an absolute limit that a single trade cannot lose more than 2% of total capital, so even if I make ten consecutive wrong judgments, I can still retain 80% of my principal.
2. Only earn money within the scope of your understanding.
During the boom of IEOs in 2019, I chose to stay put, not because I was pessimistic, but because I hadn't fully understood the mechanics behind it. This restraint helped me avoid the subsequent crash.
Before the rise of Layer 2 in 2021, I spent half a year researching ZK-Rollup and Optimistic Rollup technologies. Only after understanding the pros and cons of each project did I invest heavily, ultimately achieving several times the return.
I firmly believe in one rule: you can never earn money beyond your understanding. Even if you make money by luck, you will lose it back with skill. Before each investment, I ask myself: what problem does this project solve? Does the team have actual results? How is the token economic model? If I can't answer one question, I'd rather miss out.
3. Position management is the art of survival.
I now strictly implement the '6211 rule': 60% of funds are allocated to Bitcoin and Ethereum (the ballast of the market), 20% to mainstream public chains, 10% for trying new tracks, and the final 10% is kept as cash for emergencies. The position of any single cryptocurrency never exceeds 15% of total capital.
During the LUNA collapse in 2022, because I adhered to this rule, my account's total drawdown was kept within 12%. Meanwhile, some of my friends who heavily invested in LUNA directly exited the crypto world.
The essence of position management is not to maximize profits but to prioritize survival. In the crypto world, living longer is much more important than earning quickly.
Restraint in a bull market, hoarding in a bear market.
Currently, Bitcoin has fallen from a high of 126,000 to 94,000, and altcoins are in a dire state. But to me, this is precisely the time to test investment philosophies.
In a bull market, I set a rule for myself: take profits in batches after reaching target returns. I usually sell 20% of my position when I achieve a 50% profit, then sell another 30% at 100% profit, and let the remaining 50% of the profits run while protecting with a trailing stop loss.
In a bear market, I patiently wait like a hunter, building positions in batches only when value is severely underestimated. I don’t aim to buy at the lowest point but seek price areas with sufficiently high safety margins to gradually collect chips.
In 8 years, I grew from a desperate bankrupt to a professional trader managing 30 million in assets. The greatest insight along this journey is that the crypto world ultimately competes not on who is smarter, but on who understands the market with respect and adheres to discipline.
True winners are never those who shout the loudest in a bull market, but those who quietly accumulate in a bear market and live to see the next bull market.
I hope my experience can inspire you. The road in the crypto world is long, and may we all become the 'night watchmen' who live long and steadily. Follow Xiang Ge for more first-hand information and accurate insights in the crypto world; learning is your greatest wealth!
