I started getting involved in cryptocurrency 5 years ago. I've seen the craziness of doubling in a day and experienced the panic of losing half in 24 hours. But to be honest, the secret to making money has never been about accurately predicting every rise and fall, but rather about repeating simple actions to the extreme. The two sets of principles I'm sharing today may sound unoriginal, but it's exactly these 'boring' rules that have helped me survive through three cycles of bull and bear markets.
1. Trends are your friends; don't always think about being the 'hero of a comeback.'
The most expensive tuition in the market is thinking you're smarter than the market.
When you see a 'N' shaped breakout, just jump in with your eyes closed.
When the price of the coin goes through a wave of rise → pullback → and breaks through the previous high again, forming an 'N' shape, it often indicates the continuation of the trend. My habit is: to enter at the moment of a secondary breakout, with a stop loss set below the lowest point of the pullback. For example, last year, after SOL consolidated around $80, it broke out with volume above $90. I entered and took profits at $150 in batches.
Key point: don't get tangled up in 'has it risen too high?' In a bull market, the strong stay strong, and those who fear heights are always the unfortunate ones.
Moving averages are your safety belt
I only look at two lines: the 20-day line (short-term trend) and the 120-day line (bull-bear dividing line). If the price stands above the 20-day line and the moving averages diverge upwards, I hold; if it breaks below the 20-day line and fails to recover for two days, I decisively stop loss. This method helped me avoid the collapse of LUNA in 2022 — at that time, it broke below the 20-day line and didn't recover for three consecutive days, so I exited and avoided the subsequent plunge.
Second, in a volatile market, the money is made from 'patient money'
When the trend is unclear, 90% of losses come from frequent operations.
'N' shape builds up power; squat in the key position
When the price of the coin oscillates between support and resistance levels (for example, Bitcoin consolidating between $60,000 and $70,000), I will buy in batches as it approaches the support level and sell in batches as it rebounds to the resistance level. For example, this April, ETH repeatedly stopped falling around $2800 with volume; I placed an order at $2850 and sold when it surged to $3200.
Remember: support levels are not guessed but are the results verified repeatedly by historical candlesticks.
Volume is the mirror that reveals the truth
If the price falls to the support level while trading volume shrinks (indicating that selling pressure is exhausted), and suddenly increases during the rebound, that is a clear entry signal. Conversely, if the support level is broken with volume, hurry up and run — don't fantasize that 'it will bounce back quickly.'
Third, why can't you ever hold onto your positions?
Many people do not fail to understand the market but lose to their mentality.
A stop loss is not giving up, but rather correcting mispricing
I accept a maximum loss of 5% of my principal for each trade. For example, with a principal of 10,000, the single stop loss amount is 500. This way, even if I stop loss consecutively 5 times, I still have 75% of the principal left to recover.
During profits, let the profits run
Once the coin price enters a trend, I will use the 'trailing stop loss method': every time the price hits a new high, I raise the stop loss line to just below the previous low. For example, if Bitcoin rises from 50,000 to 60,000, I will move the stop loss line from 48,000 to 55,000, thus locking in profits without missing out on future gains.
Fourth, the pitfalls that beginners should avoid (I have stepped on all of them)
Oppose 'news-driven trading': I once rushed into a niche coin because of a big shot's call, and it took me two years to break even. Now I only believe in candlestick language and capital flow.
Refuse to go all in: even with a 99% certainty, I only invest 20% of my position. The market always has black swans.
Filter out noise: unfollow all KOLs who make calls, and only keep a few accounts that analyze data and on-chain data.
The most ironic thing in the coin circle is: the more one pursues complex techniques, the easier it is to lose everything; while those who are willing to accept simple rules and persist in repetition become the winners.
If you can only remember one sentence: use the 20-day line to judge trends, find buy/sell points with support/resistance levels, and use a 5% stop loss rule to protect yourself. The rest is just patiently waiting for the market to give you money.
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