Discipline is the only talisman to navigate through bull and bear markets.
Eight years ago, I entered the cryptocurrency world with a bit of curiosity and a little bit of a competitive spirit. I still remember that at that time, I couldn't even explain what blockchain was; I just felt that this field was very fresh and exciting. I started with empty hands, and now I’ve managed to make a living through trading cryptocurrencies. The biggest realization along this journey is not about which technical indicators are magical, but rather that discipline and mindset are the true keys to success.
Today, I want to share the 12 rules of trading cryptocurrencies that I have summarized. There are no profound theories, only practical insights. These rules may seem simple, but each one is a lesson I learned through my own hard-earned money.
1. Preserving your principal is more important than anything else.
In the cryptocurrency world, surviving is far more important than getting rich overnight. I've seen too many people come in with the mindset of 'a quick fortune,' only to leave quietly before the bull market arrives. Preserving your principal is not being conservative; it's so that when opportunities arise, you still have chips on the table.
My approach is: never risk more than 2% of total funds on any single trade. This way, even if I lose ten times in a row, I still have 80% of my principal to recover.
2. Don't be greedy; accumulate small victories for greater success.
The most harmful mindset in the cryptocurrency world is the 'get-rich-quick mentality.' Always thinking about hundredfold coins, but ending up unable to preserve even the existing profits. My current principle is: be satisfied with catching a part of the fish, and don't expect to eat the whole thing from start to finish. Set reasonable profit targets, and after reaching them, take profits in batches, leaving a little for others to earn, so that I can sleep soundly.
3. Focus your firepower, but don't shoot all your bullets.
Many people say 'don't put all your eggs in one basket,' but excessive diversification means you haven't studied seriously. My strategy is: focus on 3-5 mainstream coins and deeply understand their characteristics, but never go all-in. Always keep a certain proportion of cash, so that when prices drop, you have the confidence to average down.
4. Position management is an art and also a survival skill.
Novices often gamble with heavy positions, while veterans understand the importance of position control. My strict rule is: no single coin position exceeds 20%, and total position does not exceed 70%. This way, even if a black swan event occurs, it won’t be severely damaging.
5. Enter calmly and exit decisively.
Before entering, wait patiently like a hunter, and exit decisively like an assassin. This is a summary of my years of experience. Don't chase prices out of FOMO (fear of missing out), and don't hold on because of fantasies. Set clear stop-loss points and target prices before opening a position, and strictly execute them when the points are reached, without getting emotional.
6. The market always has opportunities, but your principal is limited.
A day in the cryptocurrency world is like a year in real life. This saying indicates that there are many market opportunities, but it also hints at significant risks. Missing one opportunity always means there will be another, but if your principal runs out, you're really out of the game. So, don’t use money you need in the short term to trade cryptocurrencies, and definitely don’t borrow money to trade.
7. A stop-loss is not a failure; it is self-protection.
I've seen too many people (including myself) turn small losses into big losses because they were unwilling to set stop-losses. My current principle is: a stop-loss order is a 'talisman.' Set a stop-loss when opening a position and never move it. If I lose 10%, I decisively exit; preserving capital is more important than anything.
8. Long-term or short-term, cashing out is real money.
Whether holding long-term or engaging in short-term trading, profits that aren't cashed out are just numbers. I regularly withdraw part of my profits to feel the solid sense of real money coming in. This not only preserves the battle results but also serves as positive reinforcement for my psychology.
9. The law of extremes is an eternal rule of the market.
In the cryptocurrency world, there are no coins that only rise without falling, nor are there coins that only fall without rising. When the market is euphoric, I remain cautious; when the market is fearful, I look for opportunities. This contrarian thinking has allowed me to make correct decisions multiple times near turning points.
10. Patience is the best strategy.
Most of the time in the cryptocurrency world is garbage time; there are only a few truly trend-driven opportunities in a year. Most of the time, I’m observing and waiting, only placing heavy bets on high-certainty opportunities. This not only saves capital but also conserves energy.
11. Stop-loss is your responsibility; profit is a gift from the market.
I firmly believe: good risk control is the investor's duty; whether you can profit is up to the market. This mindset allows me to calmly face gains and losses without being emotionally affected by temporary wins or losses.
12. Wealth is built by 'sitting' rather than 'doing.'
Frequent trading is a common problem for retail investors and the main reason for losses. My experience is: holding quality coins patiently after buying often yields higher returns than frequent trading. This not only saves on transaction fees but also avoids being shaken out.
These rules sound simple, but the hard part is consistently executing them. After eight years in the cryptocurrency world, my biggest insight is: trading is a game against human nature. Greed, fear, and the psychology of luck are the real enemies we need to overcome.
I remember a time when I stayed up late every day watching the market and frequently trading, resulting in not only my health deteriorating, but also my capital significantly shrinking. Later, I realized that a healthy body and a calm mindset are the best investments. Now my routine is regular; I watch the market for no more than 2 hours a day, and my returns have stabilized and grown.
The road in the cryptocurrency world is long; don't think about getting rich overnight, but rather consider how to survive continuously in this market. When you can achieve stable profits, wealth will naturally come to you.
I hope my sharing inspires you, and feel free to share your cryptocurrency stories in the comments.
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