Today I'll share a true story - Old Chen, who opened a building materials store, lost 180,000 U on the day of the 19.1 billion liquidation. He was almost unable to cover the building materials payment, but six months later, he came back with a 430,000 U account to have tea with me. The core of his turnaround was three points: controlling greed, treating stop-loss as breathing, and during a crash, it's better to miss out than to recklessly bottom-fish. Below is my breakdown, with some personal opinions, but each sentence is the truth of survival in the crypto world.
1. Single position limited to 5%: Losses should be bearable, and profits should be stable.
Old Chen initially fell for 'All in': 180,000 U fully invested in more than 3x leverage, and he was liquidated after a 6% drop. Later, he set strict rules - a single position cannot exceed 5% of total capital, even for the most promising market, he would invest at most 9,000 U with 2x leverage.
"Even in a store, inventory is purchased in batches. How can you dare to throw all your money into trading cryptocurrency?" He calculated: With a 5% position, even if it drops 10%, the loss is less than 0.5% of total capital, so he isn't worried about the turnover of construction material funds at all.
My opinion: Those who survive in the cryptocurrency world do not rely on making a fortune, but on being able to 'afford to lose.' Institutions suggest that cryptocurrency holdings should not exceed 2%-4% of total assets. Old Chen's 5% is already considered aggressive, but for retail investors, the size of the position determines whether their mindset is stable.
2. The stop-loss line is life: Cutting fingers to survive, not cutting wrists
Old Chen now sets a 1.5% stop-loss for every order. For example, in the case of a long position in Bitcoin, if it drops 270U, he will automatically exit. He showed me the records: In three months, there were 5 stop-losses, totaling a loss of 1500U, but with one rebound, he made back 40,000U.
"Last time I got liquidated because I couldn't bear to cut losses. Now I treat stop-losses like breathing — if you don't stop the loss, don't open a position."
My opinion: Setting stop-losses goes against human nature, but the volatility in the cryptocurrency world specifically targets the gambler's mentality. Setting a stop-loss is not admitting defeat; it's leaving room for mistakes. Especially in high-leverage contracts, the stop-loss line is the only tool that can help you sleep well.
3. Do not bottom-fish during a crash: Wait for signals, don't wait for miracles
On the day of the 19.1 billion liquidation, how many people shouted 'bottom-fish'? Old Chen stayed put. He said: 'Even in a store, they look at whether the market is stable before purchasing inventory. Who dares to catch flying knives when the cryptocurrency market is crashing?' Later, the price dropped another 12%, and he only entered the market when he saw a rebound signal on the daily chart, gaining an 8% increase.
During a crash, the market is full of FUD (Fear, Uncertainty, Doubt). Veterans die at the peak, while newcomers die halfway down the mountain.
My opinion: Bottom-fishing is one of the biggest traps in the cryptocurrency world. Historical data shows that Bitcoin typically takes 1-3 years to recover after a crash. Patiently waiting for right-side trading signals is more practical than gambling on the bottom. Old Chen's 'patience' is essentially trading time for certainty.
Summary: Rules are more reliable than luck
After his comeback, Old Chen told me: 'Is there any cryptocurrency that keeps falling? But many people lose because they are 'anxious' — anxious to recover losses, anxious to prove themselves.' My observation is that those who can survive a bear market are all prisoners of discipline.
Position management > Predicting price fluctuations: Only with money you can afford to lose can you withstand volatility;
Stop-loss discipline > Gambler's mentality: Admitting mistakes is the beginning of trading;
Waiting for signals > Blindly bottom-fishing: The market lacks opportunities, but lacks people who can survive until opportunities arrive.
Finally, here's a saying: The cryptocurrency night is long, but when the day breaks, those who follow the rules still have bullets in hand. Surviving is the greatest capital for a comeback.
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