Surviving in the crypto world always comes first
Seven years ago, I entered this market with a curiosity about cryptocurrency, never expecting it would be such a tumultuous journey. From a profit of 3 million to a debt of 8 million, and then clawing back to a profit of 10 million, behind these numbers are countless sleepless nights and painful lessons.
I used to be a 'retail investor' who chased after rising prices and sold on dips. I blindly jumped into the 'meme coins' on the rise list, ignoring trends and patterns, and the result was always becoming a bag holder. The worst time, I heavily invested in a 'star coin' that had dropped for three consecutive days, directly losing 2 million, giving back all my previous profits and still owing.
At that moment, I suddenly realized that stable profits in the crypto space are never based on luck, but on a trading system that requires relentless effort.
The pitfalls I've stepped into have piled up like mountains.
In early trading, I made almost every mistake that beginners make: blindly following trends, overtrading, and making emotional decisions. Not cutting losses when losing money and failing to hold on when making profits is the reality for most retail investors and was also my past state.
Even more frightening is the feeling of complacency. There was a time when I deceived myself into thinking I was making money, but in reality, the profits were too small. I always looked at the value of my investment portfolio as comfort, ignoring actual risk control. The greatest killer in the crypto field is complacency; ignoring warning signals, not locking in profits, and being slow to react to new information can all be attributed to complacency.
The biggest tragedy in the crypto space is mistaking luck for skill and thinking of a bull market as a sign of one's own intelligence.
The transformation path of my trading system.
After experiencing countless losses, I finally understood the need for a systematic trading approach. A good trading system is like a map; it helps you find direction amidst the fog of the market, avoids emotional decisions, and makes profits a reproducible pattern rather than a matter of luck.
Precise coin selection: no longer blindly following the crowd.
Now, my coin selection completely discards the blind methods of the past and instead follows a strict set of standards:
Focus only on those cryptocurrencies that have shown stable performance recently, rather than simply chasing after the ‘meme coins’ on the gainers list. This means I will conduct a comprehensive analysis of both the fundamentals and technicals, paying attention to the actual value of the project, team background, and community activity.
Trend judgment: the monthly chart determines direction.
I now switch to the monthly chart, using the MACD indicator to judge long-term trends. This not only avoids interference from short-term market noise but also significantly improves the safety and stability of my trades.
When the MACD forms a golden cross on the monthly chart, it indicates that the long-term trend is upward, which adds a layer of safety to my trades.
Position management: never put all your eggs in one basket.
Position management is an art and a survival rule. I now strictly control the risk of a single trade to within 2% of total funds to avoid losing everything due to a single judgment error.
At the same time, I adopted a strategy of building positions in batches, initially opening a position not exceeding 20% of the total funds, and after making profits, gradually increasing my position using compound interest. This pyramid-style increasing approach allows me to expand profits when the direction is correct while controlling losses when the direction is wrong.
Stop-loss and take-profit: mechanically executed, devoid of emotions.
Now, every trade I make has a clear entry point, stop-loss point, and take-profit point. The stop-loss is set at the point that 'proves the analysis wrong'; once triggered, I decisively exit without harboring any false hopes.
In terms of taking profits, I adopt a strategy of staggered profit-taking: sell one-third when it rises by 30%, sell another one-third when it rises by 50%, and track the remaining position for profit-taking. This strategy ensures that some profits are secured while not missing out on potential further increases.
Trading psychology: the invisible cornerstone of survival in the crypto space.
After seven years in the crypto space, I've come to realize that whether trading is successful or not, technical analysis accounts for only 30%, while the remaining 70% is all about mindset management.
Emotion is the biggest enemy in trading. Greed during profitable times and fear during losses are the main culprits that lead to poor decision-making. Now, before trading every day, I silently remind myself: stay calm and respect the market. In front of the market, everyone is just fodder; being cautious ensures long-term survival. The notion of getting rich overnight has little to do with me.
I have also learned not to develop feelings for my holdings. Major losses always come when I feel overly confident; the trades that cause us to lose the most money may very well be the ones we are most confident about. Therefore, regularly checking my holdings and strictly following the signals from the trading system has become an unyielding habit for me.
A practical case from last year.
Last year, there was a cryptocurrency where I strictly followed the aforementioned strategy, heavily investing near the 60-day line. I reduced my position when it rose by 30%, sold again at 50%, and finally exited all remaining positions on the day it broke below the 60-day line, securing a steady profit of 40%.
Meanwhile, friends around me couldn’t withstand the corrections, selling early or holding on with false hopes and ultimately losing everything. This case made me more convinced: in the crypto space, surviving always comes first. Even if I sell early, I can just wait until I can re-enter at a suitable buying point.
A trading system that persists relentlessly is the way to go.
After seven years of trials and tribulations, I deeply understand that there is no holy grail in the crypto space, and no one can predict every market fluctuation. However, having a trading system that suits oneself and sticking to it relentlessly allows one to find their own certainty in an uncertain market.
In a bull market, even pigs can fly, but when the tide goes out, the ones that survive are always systematic traders.
My trading system may not be suitable for everyone, but the mindset of building a trading system is something that anyone wanting to survive long-term in the crypto space should possess. Only with quantitative thinking, strategy combination, and strict risk control can one stand undefeated in this highly volatile market.
The doors of the crypto space are always open; the key is to master the right timing for entry and exit. Going with the trend is the way to live a trend-following life.
Remember, a day in the crypto space is equivalent to a year in the human world. High returns inevitably come with high risks; the core of stable profits is not how much can be earned in one go, but how long one can survive in this market. Build your own trading system, execute it strictly, and conduct regular reviews to progress steadily amidst the waves of the crypto space.
This article is dedicated to those of you who have struggled in or are currently in the crypto space. Though the road is long, progress is sure to come. Follow A Ke to learn more up-to-date information and knowledge about the crypto space, becoming your guide in the crypto world; learning is your greatest wealth!
