My three 'silly' rules, each of which has saved my life.
I bet you're currently scrolling on your phone while thinking the market has 'opportunities'—do you feel that a certain coin has 'hit the bottom'? Do you believe that a new narrative will 'definitely skyrocket'? Stop. If you've lost money and still think it's just 'bad luck', then this article is a death notice for you.
I am the one who started hoarding Bitcoin in 2013, survived three zeros, and is still alive today as an 'old miner'. I've seen too many ups and downs of big shots in the crypto world—some got arrested, some ran away, and even more died mysteriously within a month: drowning, plane crashes, passing away in their sleep.
Today we won’t talk about market trends, but about how to avoid going crazy and how to survive in this predatory market.
1. How 'smart people' die
I have seen too many tragedies of 'smart people'.
A friend trained an 'ultimate strategy' with AI, backtested to an annualized return of 300%. In the first month of live trading, his strategy was wiped out by a sudden spike. He later mumbled to himself while staring at the screen: 'It clearly calculated the market, just didn’t account for human nature...'
There’s a brother who draws dozens of trend lines every day, opening with 'Elliott wave' and 'divergence theory'. He bet all his belongings on a 'once-in-a-lifetime' opportunity, leveraged it wrong, and evaporated a house in three days.
Not to mention those once glorious cryptocurrency big shots. MakerDAO co-founder Nikola tweeted before drowning that the CIA was after him; Amber Group co-founder Kurland mysteriously died in his sleep; the founder of Forex Club, Talan, crashed his helicopter in the French mountains.
The common point among these people is: they trust their intelligence too much and underestimate the madness of the market.
2. The true face of the market
The cryptocurrency market is not an investment market; it's a casino and a mental hospital that treats all kinds of defiance.
In 2020, Chinese regulatory authorities cleaned up the cryptocurrency market, with over 500 people arrested and the amount involved reaching 20 billion. However, this did not stop the tragedy from continuing to happen.
Not long ago, a crash led to 1.6 million people being liquidated. A Ukrainian internet celebrity trader chose to commit suicide after losing 30 million dollars. On social media, countless people shared their stories of losing everything overnight.
Buffett is right: Bitcoin is not a productive asset; its value depends on how much the next person is willing to pay the last owner. When no one is willing to take over, it’s worth even less than a piece of wood for propping up a table.
3. My three 'dumb' rules
I can survive not because I'm smart, but because I'm 'dumb' enough to only believe in three simple rules.
Rule one: position is your life, not a bullet
Never let a single position exceed the limit where you can sleep peacefully. I call this the 'sleep test': if after buying you can sleep, then it’s your position; if you feel anxious and keep checking the market, that’s gambling.
I still adhere to the '5% principle'—any investment should not exceed 5% of total funds, even if it seems like a 'once-in-a-lifetime opportunity'. The cryptocurrency market is too volatile; a 10% rise or fall is common. Invest spare money, do not affect normal life, this is the first rule of survival.
Rule two: trends are a scythe, not a pie
Every trend is wrapped in honey, but inside are blades. When a certain token goes from a professional community to a regular chat group, when a group that has been silent for months becomes active again, and when search indices soar to historical highs, it’s often not an opportunity but a trap.
Real opportunities are not when the crowd rushes in, but in places where no one cares. How to find them? Focus on development activities, the number of holding addresses, and basic logic—rather than the 'shouting' in WeChat groups.
Those altcoins, air coins, and pyramid scheme coins that claim to be blockchain can be issued with just a line of code, ultimately resulting in a mess.
Rule three: mentality is more important than the model, strategy is less important than discipline
You may not have a strategy, but you cannot lack discipline. I only make decisions 1-2 times a week, and the rest of the time I don't even open the app. Why? Because looking at the K-line for one more second lets greed and fear control you more.
Data shows that the annualized return of low-frequency traders reaches 18.5%, significantly higher than that of high-frequency traders. In the cryptocurrency market, trading 24 hours a day, if you operate every day, the outcome can only be exhaustion and your funds hitting zero.
Set strict stop-loss lines, I usually set them 5% below key support levels. Once touched, exit decisively; do not have the lucky mindset of 'waiting for a rebound to sell'. In the cryptocurrency market, once a trend is formed, a rebound may never come.
4. Surviving is victory
There are no 'teachers' in the cryptocurrency market, only 'survivors'. Those big accounts who flaunt profit screenshots every day might just disappear tomorrow; while the old investor who holds their wallet and occasionally speaks up might be the one who truly makes money.
FTX collapsed, exchanges ran away, stablecoins de-pegged… these black swan events teach us: in this market, surviving is victory.
When a tweet from Trump can cause the market to crash by 15%, and over 1.6 million people are liquidated overnight, you will realize that nothing is more important than the safety of your funds.
My 'dumb' rules are actually very simple: invest spare money in mainstream coins, don’t chase trends, set stop-loss lines, and maintain low-frequency trading. These are all common sense, but the cryptocurrency market lacks common sense the most.
Success in the cryptocurrency market is not accidental and does not merely rely on luck; it requires rational decision-making, strict risk control, and sound mindset management.
If you only remember one thing after reading this article, I hope it’s: don’t trust your 'smartness', trust my 'dumbness'. In this market, living longer is much more important than making money quickly.
Those 'smart people' have already died, while we 'dumb people' are still alive. This is the best proof.
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