A true expert in cryptocurrency trading is not a god of technical analysis, but a machine of disciplined execution.
When I first entered the circle, I was like a headless fly chasing after rising and falling prices, staring at the screen during the day and losing sleep at night, with my account balance riding a roller coaster. It wasn't until I engraved these eight iron rules in my mind that I truly evolved from a 'retail investor' to a consistently profitable trader.
Today, I share these long-hidden secrets with you without reservation. This is not a get-rich-quick scheme, but a set of survival rules that can help you thrive in this market for the long term.
1. Position management: Never let yourself be in a passive position.
"Averaging down to seek a break-even is greedy for profits"—this is a lesson learned by countless traders at the cost of real money.
When your held assets are trapped, the purpose of averaging down is to reduce the average cost and seek opportunities to break even, rather than blindly pursuing turning losses into profits. The market will not change direction because of your expectations; rushing will only deepen your predicament.
My operational rule is: the risk exposure of any single trade should not exceed 3% of total funds, and the holding of a single cryptocurrency should not exceed 10%. Always keep 30% cash in the account; this is not only a risk buffer but also gives you the confidence to buy cheap chips during market crashes.
2. Trend judgment: Understand the market language rather than being disturbed by noise.
"A calm surface may hide great waves behind it"—crypto veterans understand that seemingly calm markets often brew the biggest trends.
Truly significant trends do not happen suddenly; they have their technical foundations. An upward trend will continuously create higher highs and higher lows, while a downward trend will form lower highs and lower lows. This is the simplest and most effective method for judging market direction.
My personal trading system is: daily charts set the direction, 4-hour charts find levels, 1-hour charts for precise positioning. Only when the direction of the larger cycle and the smaller cycle align do I consider entering the market. This multi-timeframe analysis method effectively filters out market noise, preventing you from being deceived by false signals.
3. Timing of buying and selling: Operate against human nature to profit from the market.
"Buy on bearish candles, sell on bullish candles"—these eight characters seem simple but are the biggest challenge to human nature.
When the market is in panic and prices are continuously dropping, it is a good opportunity to build positions in batches. However, when the market is euphoric and bullish candles are continuously rising, it is time to gradually take profits.
I have summarized a more specific operational rule: buy on bearish candles, but it must meet three conditions:
The length of the bearish candle is more than 1.5 times the average of the previous three days (panic selling).
The closing price has not fallen below the previous low (downward trend is slowing).
Trading volume has increased by more than 50% (capital has started to enter).
Similarly, selling on a bullish candle requires discipline: as long as the daily increase exceeds 5%, regardless of how much potential remains, sell 30% first to lock in profits. The crypto market is not short of opportunities; what is lacking is the capital secured.
4. Risk control: Surviving is more important than making money.
"Don't sell without a spike, don't buy without a plunge, and don't trade in a sideways market"—these three phrases are tools to avoid market traps.
The fundamental reason most retail investors lose money is emotional trading: fearing missing out when prices rise and panicking when prices drop. The behavior of professional traders is exactly the opposite: they are greedy in times of market panic and fearful in times of market greed.
For sideways markets, my advice is: better to miss out than to make a mistake. Sideways markets are two-way harvesting meat grinders; only when the price breaks through key levels and confirms by retesting is it a safe entry time.
5. Key positions: Understanding support and resistance is essential for buying low and selling high.
"In an upward trend, look at support levels; in a downward trend, look at resistance levels"—this is the core of technical analysis.
Support and resistance are not fixed; yesterday's resistance may become today's support, and yesterday's support may become today's resistance. What truly matters is not where these lines are drawn but the market response when prices reach these levels.
My personal habit is: before the market opens every day, I first mark the previous day's high and low points, important moving average positions, and the areas of concentrated trading volume on the chart. Only when the price reaches these positions and there is a clear K-line confirmation signal will I consider taking action.
6. Mental management: Trading ultimately is about cultivating the mind.
"Trading is about mindset; greed and fear are the greatest harms"—this phrase is easy to say but hardest to do.
The market always cycles between fear and greed, and your emotions are your greatest enemy. Based on my observations, 90% of trading mistakes are caused by emotional instability rather than technical judgment errors.
My personal method of emotional management is very simple:
Before trading: Check your emotional state; if you didn't sleep for at least 6 hours the night before or are feeling agitated, stop trading for the day.
During trading: Strictly execute the preset plan; do not change it arbitrarily due to market fluctuations.
After trading: Regardless of profit or loss, conduct a review and record emotional changes.
7. Continuous learning: The market is changing, and you must change too.
What is most terrifying in the crypto space is not that you don't learn, but that you use past experiences to deal with future markets. The market structure in 2025 is already vastly different from that in 2017; the entry of institutional funds, changes in regulatory policies, and the emergence of new technologies are constantly changing the rules of the game.
I set aside 5 hours each week for specialized learning: including on-chain data analysis, reading new technology white papers, macroeconomic research, etc. This is not to predict the market but to understand what is happening in the market, thereby making wiser decisions.
8. Long-term thinking: slow is fast, less is more.
Finally, I want to share an counterintuitive truth: in this fast money-seeking market, those who truly make significant profits are long-term thinkers.
They view trading as a serious profession rather than gambling. They have fixed working hours every day and turn off the computer on time, eating and sleeping as needed. It seems slow, but in reality, it is fast because the key to stable profits is not how much you can earn at once, but how long you can keep earning.
In my trading system, a stable annual return of 50% far exceeds one that makes ten times and then goes to zero in a year. Compound interest is the eighth wonder of the world, but the prerequisite is that you must live to enjoy that day.
Conclusion: Understanding trading is about moving from 'seven losses, two break-evens, and one profit' to stable profits.
The process of understanding trading is the same: from seven losses to two break-evens and then to one profit. It is about focusing without distraction, not being greedy for various profit models; firmly executing one trading system will eventually make that system your stable source of profit over time.
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