The market specializes in all kinds of fancy tricks, while my 'dumb' strategies have ironically made me one of the few winners.
Every time I see someone in the group posting screenshots of liquidation, lamenting 'I got cut again', I think back to when I first entered the space. Back then, I also believed that I needed high-IQ strategies to make money and ended up paying a lot of tuition.
Later I understood that in this rapidly changing cryptocurrency world, complex does not necessarily mean effective; the simplest methods are often the most powerful.
The method I’m sharing today may seem a bit 'dumb', but it has helped me navigate through multiple bull and bear markets. The key is that it can almost consume all profit margins; though slow, it's steady enough to provide peace of mind.
Three things I will never do
First, I never chase prices. I remember last year when Bitcoin broke through 60,000 USD, there was a wave of FOMO (fear of missing out) in the group, and many people increased their positions overnight. I went against the trend and began to reduce my position in batches. As a result, it soon pulled back to around 50,000 USD, and I quietly bought back.
Be fearful when others are greedy, and be greedy when others are fearful. Anyone can say this, but truly achieving it requires strong psychological resilience. My secret is: set clear rules, execute mechanically, and don’t let emotions lead you astray.
Second, I never 'press orders'. What does that mean? It means not setting stop-loss or take-profit, watching profits evaporate. I have seen too many people earn 30% and not take profits, thinking they can double it, only to end up losing their capital.
My strategy is simple: exit decisively when reaching the preset point, without getting attached to the battle. What the market lacks is not opportunities, but the capital to hold onto.
Third, I never go all in. Even if I have 99% confidence, I only invest the amount planned. The biggest problem with going all in is that it puts immense psychological pressure on you, distorting your judgment. Once the market experiences extreme fluctuations, you will have no room for maneuver.
One day in the cryptocurrency world is like a year in the human world. This market lacks nothing but opportunities, and the opportunity cost of being fully invested is actually very high.
My six short-term trading maxims
After years of practice, I have summarized six maxims to help me maintain direction during volatility.
1. High-level consolidation awaits new highs; low-level consolidation awaits new lows
After the price consolidates at a high level, it often reaches new highs; after consolidating at a low level, it often reaches new lows. The key is to wait for the direction of the trend to become clear before taking action. This is not about chasing prices but about respecting trends.
2. Do not trade during sideways phases
Most people lose money trading cryptocurrencies simply because they cannot do this simplest thing. It is best to observe during sideways phases and wait for direction to become clear. This not only saves capital but also saves energy.
3. Buy on bearish candles, sell on bullish candles
This is contrary to public intuition. When the price falls and closes with a bearish candle, consider buying in batches; when it rises and closes with a bullish candle, consider selling in batches. Of course, this should be combined with overall trend judgment.
4. Slow decline, slow rebound; sharp decline, fast rebound
In a downtrend, if the decline is slow, the rebound is usually weak; if the decline is rapid, the rebound is often fierce. Understanding this can help us judge the strength of the rebound.
5. Pyramid-style building positions
This is the unchanging truth of value investing. Building positions is not done all at once, but in batches; the more it falls, the more you buy, but always leave reserved funds. This structure ensures that you will never be fully invested and trapped.
6. Continuous rises and falls must lead to sideways trading, and sideways trading must lead to trend changes
When a cryptocurrency continues to rise or fall, it will inevitably enter a sideways trend. At this time, there is no need to sell everything at high prices, nor to buy everything at low prices. After a period of consolidation, a trend reversal will inevitably occur, so wait until the direction is clear before taking action.
Why is this 'foolish' method effective?
A core reason why the vast majority of people in the cryptocurrency market lose money is excessive trading. Data shows that high-frequency traders have a loss rate as high as 92%.
My method essentially helps everyone control their hands. It’s not about seizing every opportunity, but about helping you avoid most pitfalls. In the cryptocurrency circle, losing less is earning.
Many people always want to find a hundredfold coin and get rich overnight. But the reality is that the era of tenfold and hundredfold in the cryptocurrency circle has passed. Now, major institutions and elites have entered the market, and the big dividends are gone. Being able to avoid losses already beats over 90% of people, and being able to double your investment is already quite good.
Final risk reminder
Although I have shared my method, I must emphasize: the risks in the cryptocurrency market are enormous. Recently, seven associations jointly issued a risk warning, pointing out that virtual currencies are not issued by monetary authorities, are not legal tender, and do not have equivalent legal status, and cannot be used as currency in the market.
I always believe that only idle money should be invested, and no single project should exceed 5% of total funds, always keeping emergency cash. Data shows that the probability of liquidation for those who go all in is 11 times higher than that for those who diversify.
If you are new to the market, I strongly recommend that you study systematically for three months before going into practice. A report from Coinbase shows that systematic learners have a 230% higher probability of making a profit.
In this market, survival is victory. Data from Cambridge shows that beginners who strictly adhere to basic rules can increase their survival rate from 19% to 68% over three years. Remember, controlling risk is more important than chasing high profits.
The market is always there, opportunities are always present, but the premise is that you must always stay at the table.
This is my experience as a 'fool' in trading cryptocurrencies. If you have different opinions, feel free to share — but don’t forget, in this market, our only enemy is often ourselves.
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