On the night my account was liquidated, I finished a whole pack of cigarettes, but finally understood the secret to making money...
In 2019, when I first entered the cryptocurrency market, I experienced the feeling of 'a zeroed account overnight' for the first time. That feeling is still fresh in my memory: sweating palms, staring at the screen without moving, as if I could hear the sound of my heartbeat.
However, last year when I turned 30, my assets broke into eight figures. Looking back, what truly turned my losses into profits was not advanced technical analysis, but discipline ingrained in my bones.
Today, I want to share these experiences with you. This is not some 'wealth password', but survival rules that can help you avoid detours.
1. Three red lines: Surviving is more important than making money
1. Be greedy when prices drop, be fearful when prices rise
In the crypto space, most people lose money simply because of one word: 'greed'. Seeing a surge, they get FOMO and blindly chase high prices, ending up trapped at the peak; encountering a sharp drop, they panic and sell at the bottom. True opportunities often appear when everyone is in panic.
My habit is: when the market's fear index is extremely high, and the community is in despair, and prices drop below support levels, I start building positions in batches. While others are cutting losses, I’m picking up bargains, buying a batch when it drops by 5%, and adding more when it drops by another 10%. This is not blindly bottom-fishing but a planned way to 'pick up cheap'.
2. Never stubbornly hold on
The crypto market changes rapidly; a big bullish or bearish candle can change trends. Many novices stubbornly hold losing trades, resulting in small losses turning into large ones, eventually leading to liquidation.
I now set strict stop-loss points and decisively exit when breaking below key support levels. Stop-loss is not giving up, but rather protecting the principal and waiting for better opportunities. Remember, the market never lacks opportunities; what it lacks is capital.
3. Never expose all your ammunition to the market
Full position trading is a major taboo in the crypto space. Once fully invested, you lose control and can only leave it to fate. I always keep about 30% in cash reserves, which allows me to have the ability to average down during extreme market fluctuations.
Opportunity cost is the most easily overlooked cost in the crypto space. After going all-in and seeing a fantastic opportunity but having no funds available, I have experienced this pain too many times. Now, operating with half positions allows me to enter and exit as needed, and my mindset is much more stable.
2. Six short-term tricks: Small steps, fast runs, accumulating more from less
1. Wait for new highs in high-level consolidations, and prevent new lows in low-level consolidations
When the price is consolidating at high or low levels, it is like a compressed spring, accumulating energy for a trend change. My strategy is: do not participate when the direction is unclear; once the direction is chosen, follow it immediately. A breakout after consolidation at high levels often marks the beginning of a new upward trend; a breakdown after consolidation at low levels may indicate further declines.
2. During sideways markets, restrain yourself and avoid ineffective trades
Statistics show that 80% of losses occur during sideways fluctuations. When the market has no clear direction, blind trading will only lead to continuous losses from fees. I set a rule for myself: reduce operations during sideways periods, calmly observe changes, and wait for a clear direction.
3. Buy on bearish candles, sell on bullish candles
This is contrary to the public's habitual thinking. When closing with a bearish candle, market sentiment is pessimistic, often making it a good time to build positions in batches; when closing with a bullish candle, the market is exuberant, making it the right time to take profits in batches. This contrarian thinking strategy has allowed me to buy multiple times at relatively low levels and sell at relatively high levels.
4. The speed of decline determines the strength of the rebound
Slow and steady declines usually indicate weak rebounds because this signals that capital is slowly leaving the market; whereas rapid drops are often due to panic selling. Once the panic emotions are released, strong rebounds are easier to occur. By observing the 'acceleration' of the decline, one can predict the strength of the rebound.
5. Pyramid position building, buy more as prices drop
This is my most commonly used position-building method: initially buying 20%, adding 30% when it drops by 5%, and adding 50% again when it drops by another 5%. This continuously lowers the cost, and once the market reverses, it can quickly become profitable. Of course, this only applies to fundamentally sound targets that I have a long-term positive outlook on.
6. At the extremes of rises and falls, a consolidation change is inevitable
When a coin continues to rise or fall sharply, it will inevitably enter a sideways consolidation phase. I do not blindly chase highs after a sharp rise, nor do I hastily bottom-fish after a sharp drop, but wait for the breakout direction after the sideways phase. The longer the sideways period, the greater the force of the breakout afterwards.
3. My practical case: Full record of MATIC doubling trades
In August last year, I successfully operated MATIC using this method.
First, I noticed that MATIC showed a MACD golden cross on the weekly chart, and the price bounced back without breaking the EMA21 moving average, which aligns with the principle of 'only act when panic has passed'. I established an initial position (20%).
Then, as the price slowly rose, I added to my position to 50% when it broke above the previous high. When the price rose by 40%, I sold 1/3 of my position to lock in some profits; when it rose by 80%, I sold another 1/3. Finally, when the price broke below the 20-day moving average, I liquidated my position.
This trade yielded a net profit of over 100%, and my mindset was stable throughout because I did not violate any principles.
4. Mental management: The invisible code for survival in the crypto space
1. Set a maximum daily loss limit
I set a rule for myself: if my daily loss reaches 3% of total capital, I stop trading and take a half-day to calm down. This avoids greater losses brought about by 'revenge trading'.
2. Must withdraw profits after earning
Every time I make a certain profit, I will withdraw a portion to my wallet, turning digital currency into real money. This is not only securing profits but also a way to gain positive feedback.
3. Avoid emotional decision-making
After consecutive losses or significant profits, I require myself to pause trading and stay away from the market. The greater the emotional fluctuations, the poorer the decision-making quality. Sometimes, taking a break is the best trading strategy.
Conclusion: The crypto space is the realization of cognition
After many years in the crypto space, my biggest realization is: the market never lacks opportunities; what it lacks is players who can survive for a long time.
These principles and rules seem simple, but executing them goes against human nature. It is precisely because of this that only a few people in the market can achieve stable profits.
The crypto space is not a casino but a place for realizing cognition. You can never earn money beyond your understanding, even if you make money by luck, you will lose it back through skill.
I hope my sharing can help you avoid detours. Remember, stability is more important than aggressiveness; only by surviving can you earn more. Follow Xiang Ge to learn more firsthand information and knowledge about the crypto space, precise points, and become your navigator in the crypto space. Learning is your greatest wealth!#巨鲸动向 #加密市场观察 $ETH
