Data doesn't lie, but emotions can lead to loss.
Last night I reviewed the trading records and came across a special case. My die-hard fan, Ahao, a programmer who writes code at Huawei, is known for his rationality and composure in the workplace. But this person, who has a strong sense of rhythm in his work, entered the cryptocurrency space and quietly saw his $70,000 in assets shrink to only $7,700 within three months.
When he found me, he asked just one question: "Teacher, with this amount of capital, can I still turn it around?"
I told him: "The less capital you have, the more you must adhere to discipline. You don't lack opportunities now, just patience."
He was silent for ten seconds and replied, 'Got it, this time I will do exactly as you said.' Thus, we started this three-day plan to race against time.
Step one: replace emotions with logic, ambush 'certainty.'
The core of turning small funds around is definitely not 'going all in,' but rather exchanging certainty for compound interest. The first thing I had Ah Hao do was not to analyze the market, but to turn off the trading software and take a deep breath for ten minutes.
At that time, I observed that a certain AI concept coin had a typical double bottom structure on the four-hour chart. More importantly, on-chain data showed that some addresses marked as 'smart money' had been quietly accumulating for three consecutive days. Although market sentiment was still pessimistic, data does not lie.
I synchronized the tip in the community: 'Currently place long orders around the price of 0.489, set the stop loss 5% below the previous low, and aim for the breakthrough of the descending trendline.'
Ah Hao demonstrated remarkable discipline, and after placing the order, he did not repeatedly check the market. The next morning, news came in: the project team suddenly announced a partnership with a well-known AI laboratory in Europe. The price broke through resistance, surging to around 1.193 within an hour. I immediately issued a directive in the community: 'Take profit on half, move the stop loss on the remaining part to the cost price to lock in profits.'
After this operation, Ah Hao's account went from 7700U back to 60000U. He sent me a 'dumbfounded' emoji. I replied to him, 'Don't celebrate, now is the key. Many people win once and get carried away, then quickly give it back to the market. What you need to do is repeat the correct actions.'
Step two: let the market speak for itself, seize the 'probability advantage.'
After the same asset surged, the hourly chart RSI showed a clear bearish divergence signal. At the same time, on-chain data indicated that whale addresses began to transfer tokens to exchanges in batches. This is usually a signal that requires caution.
I had Ah Hao place a short order near 1.1893. I especially emphasized that the logic here is not subjectively 'bearish,' but rather 'data indicates a probability advantage here.' The stop loss is set above the previous high, and the target looks toward the area with weak liquidity below.
As a result, when the market experienced a drastic drop, the price fell back to around 0.566. After taking profit for the second time, Ah Hao's account balance reached 320000U.
He later told me: 'These three days felt like riding a rocket, but what shocked me more was that as long as I strictly followed the strategy, even if the market was crazy, my hands wouldn’t shake.'
Core insights for ordinary traders.
1. Exchange 'frequency' for 'space,' pursue a high risk-reward ratio.
The biggest misconception for small funds is to fantasize about 'a hundredfold overnight.' The correct approach is to accumulate a 2:1 or even 3:1 risk-reward ratio for each trade. Just like the compound interest formula, what’s scary is not the single yield rate, but the 'stable positive yield.' It’s best to control the risk of a single trade within 1%-2% of total capital.
2. Don't fall in love with the news.
Both bullish and bearish news are just catalysts for the market; the real price direction has long been pre-written by the flow of funds and on-chain data. Ordinary traders should learn to identify the movements of 'smart money,' rather than being led by news headlines.
3. Cultivate three core execution capabilities.
What ordinary people should cultivate is not 'precisely bottoming and topping,' but three phrases:
Don't chase missed opportunities: the market is always full of chances, if you miss one, wait for the next.
If you make a mistake, cut it: resolutely execute stop-losses and do not harbor any lucky thoughts.
By the way, hold on: let profits run, and after protecting your principal and some profits with a trailing stop, strive for greater space.
As long as these three points are executed properly, you have already outperformed 90% of retail investors.
4. Understand cycles, patiently wait.
The flow of market funds has its rules, usually undergoing a rotation process from Bitcoin to mainstream coins, and then to small-cap altcoins. Most of the time, what we need to do is patiently wait until the 'high win rate signals' in our trading system appear. Traders who don't hold cash positions find it difficult to achieve continuous profitability.
The speed of the cryptocurrency market is never short of miracles, but the real 'fast' is when others frequently change lanes, you consistently accelerate along your own track. If you have ever lost your rhythm in the market, I hope Ah Hao's story can inspire you a bit.
The market is always here, but your capital will not be. Trade your plan, plan your trade. Follow Xiang Ge to learn more first-hand information and accurate points in the cryptocurrency world. Learning is your greatest wealth!
