I remember seven years ago, I cautiously entered the crypto market with 800 yuan, and after the first year, I was left with only two digits. That feeling of despair is still fresh in my memory. But who would have thought that seven years later, this small amount of money has grown to over 30 million.
What comforts me even more is that my apprentice, who has been learning with me for three months, has doubled his principal using this method. Today, I selflessly share this trading system that I've kept under wraps with everyone, as living in this market is more important than making quick money.
01 The Art of Position Management: 5-Point Stop-Loss Rule
I've seen too many tragedies of losing everything overnight, the most common being betting all funds on a single asset. I made this mistake in 2018 by heavily investing in an altcoin, only for the project team to run away, leaving me with nothing.
Since then, I strictly enforce the '5-part stop-loss rule': regardless of the amount of capital, always divide it into 5 equal parts, and only invest one part at a time.
Set the stop-loss line firmly at 10%, and do not think this ratio is too strict. This way, even if there is a mistake in a single judgment, the loss will only be 2% of the total funds. If you make 5 consecutive mistakes, total losses will still be controlled within 10%, leaving room for recovery.
Profit-taking needs to be much more flexible; if profits are not above 10%, there is no need to consider exiting. In the face of a strong market, let profits run. It is precisely with this strategy that I survived two major bear markets in 2020 and 2022, and not only did I not suffer serious losses, but I was also able to accumulate positions at low levels.
02 The wisdom of trend tracking: only follow the trend, do not catch the bottom
The most common mistake retail investors make is to blindly catch the bottom, always thinking, 'It has fallen so much, it should bounce back, right?' As a result, they often buy in halfway up the mountain.
In a downward trend, 90% of rebounds are bait traps, just like someone who has already fallen into a pit reaching out to pull you down, resulting in you being dragged down too. In contrast, pullbacks in an upward trend are genuine opportunities; buying low is always safer than catching the bottom.
Another taboo: absolutely do not touch targets that have surged in the short term! Whether mainstream coins or altcoins, the crazier the rise, the more tragic the fall. Last year, there was a coin that increased fivefold in three days, many chased the high, and a week later it fell back to the starting point; those who did not heed the warning directly lost 80%.
In this market, self-proclaimed 'gamblers' often do not survive beyond three years.
03 The minimalist way of technical indicators: three are enough to defeat the market
Technical analysis is not better when it is more complicated. Based on my years of practical experience, it is enough to look at three key indicators.
MACD is a key trend indicator. When a golden cross breaks through the zero line, it is the best entry point, indicating that the trend is starting to go up; while a death cross above the zero line is a signal to reduce positions, indicating that the trend may reverse.
Trading volume is the barometer of the market. When there is a breakthrough in volume at a low level, it indicates funds are entering; if there is high volume but no price increase, be cautious, as it may indicate that the main force is offloading.
The moving average system helps me judge trends over different periods: the 3-day line looks at short-term fluctuations, the 30-day line looks at medium-term trends, the 84-day line captures main upward waves, and the 120-day line determines long-term direction. Only targets with upward trends across all moving averages are worth my time.
04 The honing of trading psychology: two iron rules determine success or failure
Finally, these two trading psychological rules are lessons I learned with real money that can help you avoid three years of detours.
First, never average down when at a loss! Many people keep averaging down, resulting in small losses turning into big losses, and ultimately getting stuck. Averaging down should only be done when in profit; adding to the position in the direction of the trend can amplify profits.
Second, you must review after each trade! Every day after the market closes, I spend an hour examining whether my holding logic is valid, then use the weekly chart to verify trend judgments. If wrong, adjust the strategy; if right, summarize the experience. Reviewing once is more effective than blindly operating ten times.
05 Risk control system: buckle up for trading
No matter how good a trading system is, it still needs strict risk control to ensure safety. I particularly appreciate those practices that deeply embed risk control into the system. For example, some platforms use intelligent algorithms to monitor market fluctuations in real time and automatically trigger protective mechanisms before unusual fluctuations.
In my system, the maximum daily loss is controlled within 5% of the total funds. Once this threshold is reached, all trading stops for the day. Meanwhile, the exposure to any single cryptocurrency should not exceed 20% of the total funds; diversifying risk is key to long-term survival.
Remember: the biggest difference between professional investors and amateur players is not in the accuracy of their judgments, but in their risk control ability.
06 Surviving is the key to laughing last
In seven years, I went from losing money while crying to making money while laughing, relying not on luck, but on this market-validated system. The crypto market never lacks opportunities for quick profits, but it lacks people who can make money over the long term.
The best investment strategy is the one that suits you, being fearful when others are greedy, and greedy when others are fearful. In this high-risk market, surviving is the first priority, then comes the consideration of how to make money.
Remember, in this circle, learning from those who have results is the most worry-free way to make money. Follow Xiang Ge to gain more first-hand information and precise points in the cryptocurrency space; become your guide in the crypto world, as learning is your greatest wealth!#巨鲸动向 #加密市场观察 $ETH
