In the cryptocurrency circle, it's not the smartest who survive, but the most disciplined.
Looking at more and more friends around me entering the cryptocurrency circle, I often think back to when I first encountered cryptocurrencies. At that time, I also blindly followed trends and traded frequently, watching my assets shrink before my eyes. Many years have passed, and I am increasingly clear: in this market, knowledge, discipline, and mindset are far more important than luck.
Today, I want to share a few trading principles that I have summarized myself, hoping to help those of you who are new to the circle.
1. Luck and hesitation are the beginning of losses.
"If only I had sold earlier," "Let’s wait and see, maybe it will bounce back"... Do these phrases sound familiar? The gambler's mentality amplifies risks, and hesitation lets opportunities slip away. I have seen too many people set stop-loss points but hesitate to cut losses when prices hit those points, turning small losses into big ones.
The market will not give you a second chance just because you regret. My principle is: plan your trades, trade your plan. Once the price hits the preset stop-loss or take-profit point, act decisively, without attachment or daydreaming.
2. Long-term, short-term, and swing, find your rhythm
Long-term is gold, suitable for those who do not want to watch the market all day; short-term is silver, suitable for those who react quickly and have more time; swing trading is like diamonds, but requires precise control of buy and sell points.
What type of investor are you? Understanding your personality and time constraints is important. I never advise office workers to do short-term trading—you don’t have the time to compete with professional traders on speed. Finding a rhythm that suits you is more important than blindly following trends.
3. Position management is key to survival
Never go all in easily. I find that many people, upon seeing an opportunity, go all in, only to encounter a black swan event and exit directly.
My approach is to divide funds into five parts, and not exceed 20% in a single cryptocurrency position. This way, even if the judgment is wrong, there is still room to average down or cut losses. Leaving room allows for a calm mindset.
4. Eat the middle section of the fish, leave the head and tail for others
Those who try to buy at the lowest point and sell at the highest point often end up losing the most. The market tops and bottoms are the riskiest areas; I would rather give up that portion of profit and only earn relatively safer swings in between.
Remember, the market never lacks opportunities; what it lacks is the capital to survive and seize those opportunities.
5. Frequent buying and selling is slow suicide
Data shows that low-frequency traders have significantly higher annualized returns than high-frequency traders. Frequent trading not only increases transaction costs but also makes it easy to get lost in short-term fluctuations.
I spend most of my time currently on 'not trading', but rather observing, learning, and waiting. Less action, more thinking, and you will find that making profits is actually easier.
6. Mindset first, strategy second, technique third
Many beginners get obsessed with studying various technical indicators but neglect the most important aspect: mindset management. Mindset determines success or failure, strategy provides the framework, and technique is just a tool.
I have seen too many technical analysis experts incur losses due to imbalanced mindsets. Cultivating a good mindset is more important than mastering any technical indicators.
7. Markets are born in despair and end in madness
This is an immutable law of the market. When everyone is lamenting being trapped, opportunities are often right in front of them; when everyone is discussing trading coins, the risks are quietly approaching.
Learning to act against emotions is key to long-term profits.
8. Greed and fear are the biggest enemies
Greed will keep you from selling when you should, and fear will prevent you from buying when you should. How to overcome it? My method is to replace emotions with rules.
Prepare your trading strategy in advance, and execute strictly once the target is reached, leaving no room for hesitation.
9. A decline is synonymous with opportunity
Opportunities arise from drops. A market decline is the best time to build positions. But the prerequisite is: having cash on hand. That’s why I always keep a portion of my capital.
Cash is not wasteful; it is the bullet you use to capture opportunities.
10. Buy with confidence, hold with patience, sell with determination
These are the three key mindsets for successful trading. Conduct in-depth research before buying to give yourself confidence; be patient while holding, and do not be swayed by short-term fluctuations; be decisive and firm when selling, without hesitation.
My own habit is: write three reasons before buying and check three signals before selling. This helps avoid emotional decisions.
11. Indicators are tools, not the Bible
There are no absolutely accurate indicators, only retail investors who understand partially. Indicators are useful for those who know how to use them, but harmful to those who do not.
My experience is: do not blindly believe in any single indicator; multiple indicators and multiple timeframes should be used for verification. Meanwhile, the relationship between volume and price is often more reliable than a single indicator.
12. Stop-loss is the insurance of trading
Not cutting losses in trading will definitely lead to significant losses. Cutting losses is not admitting failure, but a means of risk control.
The rule I set for myself is: a single trade should not lose more than 2% of total capital. This way, even if I make consecutive wrong judgments, there’s still a chance for recovery.
13. When others are fearful, I am greedy; when others are greedy, I am fearful
This is a famous saying by Buffett, and it applies equally in the crypto world. When the market is fearful, it is often a good time to buy boldly; when the market is euphoric, it is time to consider gradually selling.
But be aware, contrarian investing is not about being against the market, but maintaining rationality in extreme market emotions.
14. From looking at prices to looking at trading volume, ultimately looking at trends
Beginners only look at prices, experienced traders look at trading volume, and experts look at trends. True winners do not get caught up in short-term price fluctuations but grasp the larger trends.
My current focus is: judging the direction and duration of trends, rather than predicting whether tomorrow will rise or fall.
My personal experience
After years of navigating this market, my biggest realization is that the cryptocurrency world lacks stories of sudden wealth, but those who last are traders who prioritize 'stability'.
Establishing your own trading system and strictly adhering to it is more important than chasing any hot trend. I have seen too many people chasing 'hundredfold coins' end up losing everything, and I have also seen how those steady investors navigate through bull and bear markets.
The market is always changing; the only constant is human nature. Overcoming greed and fear, and maintaining a mindset of continuous learning is essential for long-term survival in this market.
Remember, trading is a marathon, not a sprint. Surviving is more important than anything else.
I hope my sharing helps you! Welcome to discuss and communicate together. Follow Ake, and let me help you understand more first-hand information and cryptocurrency knowledge, precise points, and become your guide in the crypto world; learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
