Staying up all night staring at the K-line chart, my account balance changed from red to green and ultimately went to zero—I'm all too familiar with this experience.
I still remember when I first entered the crypto market, I lost most of my capital overnight. At that time, I thought I had mastered the market rules, trading with high leverage and full positions, but a small reversal in the market caught me completely off guard. That night, I smoked half a pack of cigarettes before realizing one important principle: in this market, surviving is a thousand times more important than making quick money.
Eight years have passed, and I have transformed from an impulsive novice into a seasoned player who can achieve stable profits. It’s not because I have any insider information, but because I have summarized four survival rules. Today, I will share these experiences with you in hopes of helping you avoid unnecessary detours.
1. Position Management: Don't put all your eggs in one basket
Many beginners fall into the 'all-in syndrome' as soon as they enter the market, thinking that 'fortune favors the bold' and putting all their capital into one asset. This is the most fatal mistake.
My current approach is: no single project investment exceeds 5% of total funds, and total investment does not exceed 10% of liquid assets. Some may feel that this makes profits slow, but what the crypto market lacks is not opportunities, but the capital to seize those opportunities.
Reasonable position management is like wearing a seatbelt while driving; just because you can't see the danger doesn't mean it doesn't exist. When the market corrected last time, several of my friends who were fully invested panicked, while I was able to add to my position at a low level because I had spare funds. After the correction ended, I not only broke even but also made a profit.
Remember: The probability of liquidation for fully invested traders is 11 times that of those who diversify.
2. Go with the trend: Don't go against the market trend.
I have a friend who is a 'reverse operation master' and always thinks he is smarter than the market. When the market rises, he says, 'It has to drop now,' and rushes to short; when the market drops, he shouts, 'The bottom has been reached,' and frantically tries to catch the bottom. What was the result? After a year, he lost 60%.
The market is like the Pacific Ocean; no matter how skilled you are, you can't create waves. Judging trends is actually not complicated:
Uptrend: A series of higher highs and higher lows, like climbing stairs.
Downtrend: Lower highs and lower lows, like descending stairs.
I only enter the market after confirming a trend, never blindly trying to catch the bottom. Many people end up getting stuck halfway up the hill because they want to catch the bottom; this is the most common and regrettable loss situation.
The golden rule: In a bull market, the trend is clearly upward; in a bear market, the trend is clearly downward. Don’t confidently attempt to catch the top or bottom.
3. Take Profit and Stop Loss: Equip your investments with a braking system.
Wanting to earn more after making a profit, and being reluctant to cut losses after a loss—this is human nature, but also the enemy of investing.
After my liquidation, I set strict rules for myself: If a single trade loses 5%, I will stop loss immediately; if it gains 8%, I will take half the profit. Once, the asset I held rose by 15%, and I greedily wanted to wait for 20% to sell, but then the market corrected, and I lost half the profit that day.
Protecting your capital is more important than pursuing profits. A practical method is to set a trailing stop: after achieving a certain degree of floating profit, set a protective stop loss near the cost price. This way, even if the market reverses, you can at least retain part of the profit.
Remember: Don't let profitable trades ultimately stop out.
4. Reduce Frequent Trading: Less movement means more winning.
The most common mistake beginners make is 'itchy hands,' wanting to trade every time they open the trading software. They might place seven or eight orders in a day, paying hundreds in fees, only to end up losing money.
Data shows that the loss rate for high-frequency traders is as high as 92%. Now, I trade no more than three times a week, which turns out to be more stable than watching the market all day. Trading is like fishing; only those with patience can catch big fish. The market fluctuates every day, but truly valuable opportunities only come once or twice a week.
Kick the habit of frequently checking prices: Task switching is the enemy of productivity; every glance at the intraday candlestick chart will disrupt your focus.
The crypto market is not a casino; it is a field that requires learning and patience. A beginner's first lesson is not 'how to make money,' but 'how not to lose money.'
Those who can truly profit in the long run do not rely on luck but rather on stable strategies and a strong mindset. If you can strictly adhere to the rules mentioned above, your chances of survival will increase from 19% to 68%.
In this market, controlling risk is more important than chasing after high profits. Protect your capital, and you will be able to wait for the opportunities that truly belong to you.
Sometimes, the best trading strategy is not to trade at all. The market will always present the next opportunity, but if you lose all your money the first time, you won't be able to participate in the next one.
I hope everyone can find their own way to make steady profits in the waves of the crypto market. Follow Xiang Ge to learn more firsthand information and knowledge about the crypto space, becoming your guide in the crypto world; learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
