I entered the cryptocurrency world at the tail end of the bear market in 2018. At that time, the screen was full of myths like 'make a fortune overnight with 100x leverage,' but when the excitement faded, I realized that those who survive are always the ones who have ingrained the rules into their DNA. Today, I will share my four iron rules, not discussing metaphysics, just talking about how to suppress human greed with discipline.
1. Layered profit-taking: turn 'unrealized gains' into 'real money'
The most misleading saying in the cryptocurrency world is 'just hold on and you'll get rich.' I've seen too many people ride the roller coaster, from tenfold gains to zero, all because of greed. My rules are very simple:
When profits reach 15%, first withdraw half of the profits to store in a cold wallet. This money is locked in directly and is not to be moved.
For every doubling of the account, forcibly withdraw 30% to buy gold or government bonds. While combating inflation, also resist the 'illusion of wealth.'
Many people are reluctant to take profits, thinking it delays compounding, but the real prerequisite for compounding is that the principal does not collapse. With this approach, my drawdown has never exceeded 9% over five years.
Second, multi-period linkage: 'pick' profits in a choppy market.
70% of the cryptocurrency market is in a choppy phase; chasing highs and selling lows is like giving away money. My strategy is:
Weekly direction setting: only trade mainstream coins (like BTC, ETH) that are above the 200-day moving average and avoid coins that are declining.
Draw range on 2-hour charts: mark support and resistance levels, and reverse positions when approaching the boundaries (buy near support, sell near resistance).
Look at volume to enter after 1 hour: a sudden increase in volume after a period of extreme contraction is a signal to start.
In 2021, while Bitcoin fluctuated between $30,000 and $40,000, I relied on this approach to earn an average of 8%-12% monthly, even profiting during sideways trading.
Third, stop-loss rules: use 'small losses' to avoid 'death.'
My win rate is only 39%, but I achieve a risk-reward ratio of 5:1. The core three points are:
Divide funds into 12 parts, investing only 1 part each time: if there are three consecutive losses, stop and review immediately to avoid emotional over-investment.
When profits reach twice the stop-loss amount, move the stop-loss to the breakeven point: ensure that this trade is at least break-even, preventing a reversal from profit to loss.
Single trade stop-loss not exceeding 0.8% of total capital: even if there are ten consecutive stop-losses, the account will only draw down 8%.
There are too many black swans in the cryptocurrency world; surviving is more important than making quick money. Don’t believe that 'holding positions can recover losses'; those who get liquidated all think this way.
Fourth, weekly review: eliminate 'intuition' with data.
Many people make money by luck, but luck cannot be replicated. I do two things every week:
Use Excel to track the effectiveness of signals: for example, if the signal 'breaks above the 20-day high' has a win rate below 40% for two consecutive weeks, eliminate it immediately.
Quarterly parameter adjustments: for example, in a bull market change the moving average from MA200 to MA50, and in a bear market lower the position limit.
The market is changing, and strategies cannot be rigid. Reviewing is forcing oneself to admit mistakes, not making excuses for failure.
The last heartfelt truth.
There are no gods in the cryptocurrency world, only survivors. Those flaunting hundredfold returns won't tell you how many accounts they have blown. The essence of discipline is to acknowledge that one can make mistakes, so set defenses in advance. After five years, my greatest sense of achievement is not how much I've earned, but that I can sleep soundly every night—this is more substantial than any candlestick chart.
Remember: use rules to control your hands, and profits will follow you. Follow Ake to learn more first-hand information and accurate points in the cryptocurrency world, becoming your navigation in this space. Learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
