At three in the morning, the cold light of the phone screen illuminated Xiao Li's excited face. He had just seen the news of '100 times potential' in a altcoin group and jumped in with all his funds. For the next five hours, he constantly refreshed the K-line, his heart racing with the price fluctuations. The next day at noon, the coin plummeted 40%, and Xiao Li cut his losses, with his account shrinking by nearly half.

This story plays out in the cryptocurrency world every day. The cryptocurrency market, with its 24/7 operations, extreme volatility, and wealth effects, attracts countless newcomers, yet very few are prepared for its brutal other side. Real trading is not gambling, but a skill that requires systematic learning and continuous evolution.

Why do 90% of traders lose money?

The cost of emotional trading

The most common pattern for newcomers in the crypto world is 'FOMO chasing the rise and panic selling'. When a coin suddenly surges, the FOMO (fear of missing out) drives them to buy at a high point; once the price pulls back, fear causes them to sell at a low point. This high buy-low sell pattern is a wealth crusher.

Information overload and noise differentiation

The information environment in the crypto world is extremely noisy: exchange announcements, project updates, KOL calls, community rumors, macro policies... Newcomers are often overwhelmed by various 'insider news' and 'great opportunities', lacking the ability to filter real signals.

The deadly temptation of leverage

'10x leverage, a 10% rise doubles your investment!' This mathematically correct statement conceals a harsh reality: with 10x leverage, a 10% reverse price fluctuation will lead to liquidation at zero. Leverage amplifies not only profits but also human greed and fear.

Systematic trading: The transformation from gambler to trader

Step 1: Establish a trading framework

Mature traders all have their own trading systems, which include:

1. Market analysis framework: combining technical analysis (trend lines, support and resistance, indicators) and fundamental analysis (project team, technical strength, ecological development, token economics)
2. Risk management rules: the risk of a single trade should not exceed 2% of total funds, and total exposure should be controlled within a certain proportion
3. Entry and exit standards: clear buying conditions, profit-taking points, and stop-loss points

Practical case: A rational trader's operation log

Taking Ethereum trading as an example, assuming the current price is $3,000:

Technical analysis: The daily chart shows that $3,000 is an important support level, RSI is close to the oversold zone, and there is a bullish divergence on the 4-hour chart.

Fundamental judgment: The Ethereum ecosystem continues to develop, Layer 2 adoption is rising, and there are expectations for ETFs.

Position management: total funds of $10,000, deciding to build positions in batches in the $3,000-$2,900 range, with risk control as follows:

· First purchase: $3,000, invest $2,000 (20% position)
· If it drops to $2,900: add another $2,000
· Stop-loss point: $2,800 (breaking key support)
· Position limit: 40% of total funds ($4,000)
· Maximum potential loss: if the stop-loss is triggered, a loss of about $400 (4% of total funds)

Exit strategy:

· Short-term target: $3,400 (previous resistance level), partial profit-taking
· Medium-term target: $3,800 (trend line resistance), further profit-taking
· Long-term holding: retain part of the position and move the stop-loss to protect profits

Step 2: Emotional and psychological management

80% of successful trading relies on psychology. You need:

1. Trading journal: record the decision basis, emotional state, and results of each trade, conduct regular reviews
2. Stress testing: clarify your psychological reactions at different levels of loss
3. Discipline execution: even with strong impulses, strictly adhere to the trading plan

Step 3: Continuous learning and adaptation

The cryptocurrency market iterates rapidly: from DeFi summer to NFT frenzy, from Layer 2 competition to RWA narratives. Traders need:

· Keep the tech stack updated, understand new protocols and token models that emerge
· Pay attention to on-chain data, such as smart money flows, exchange traffic, and position distribution
· Learn macroeconomics, understand how interest rate cycles affect risk assets

Risk management: surviving is more important than how much you make

The art of position management

'Don't put all your eggs in one basket' has a special meaning in the crypto world:

· Major coins (BTC, ETH): 50-70% of the position, as a ballast
· Mid-tier coins (ALT with real ecosystems): 20-30%
· Small cap potential coins: no more than 10%
· Always retain a portion of stablecoins to deal with extreme market conditions and bottom-fishing opportunities

The philosophy of stop-loss

Setting a stop-loss does not mean admitting to being wrong, but rather paying an insurance premium. A reasonable stop-loss should:

· Be set below key technical levels (such as breaking through a support level)
· Consider market volatility (ATR indicator)
· Form a reasonable risk-reward ratio with profit targets (at least 1:3)

Bear market survival guide

In a bull market, everyone is a 'trading genius'; the real test comes in a bear market:

· Reduce trading frequency to avoid 'catching the bottom traps'
· Shift to a dollar-cost averaging strategy, gradually accumulating quality assets
· Use the bear market to learn and prepare for the next cycle

The path to advancement: find your trading style

Four types of traders

1. Day traders: utilize minute-level and hourly fluctuations, requiring high time and psychological demands
2. Swing traders: capture trends lasting from days to weeks, balancing opportunity frequency and pressure
3. Trend traders: follow major trends, holding positions for weeks to months, requiring great patience
4. Dollar-cost averaging investors: ignore short-term fluctuations, buy regularly, hold long-term

Newcomers are advised to start with swing trading or dollar-cost averaging to gradually find their own rhythm.

Tools and resources

· Analysis tools: TradingView (technical analysis), Dune Analytics (on-chain data), CoinMarketCap (basic information)
· Learning resources: classic trading books (Reminiscences of a Stock Operator), well-known trader blogs, high-quality podcasts
· Community selection: stay away from signal groups, join communities that focus on analysis and education

Conclusion: Trading is a practice

The essence of crypto trading is finding limited certainty in extreme uncertainty. It tests not only analytical ability but also the control of human nature. Those who ultimately survive in this market are often not the smartest, but the most disciplined, the best learners, and the most adaptable.

Remember, in the ever-accelerating cryptocurrency market, your primary goal is not to get rich overnight, but to survive until the next bull market. When you are no longer emotionally bound by candlesticks, when your trading decisions stem from a plan rather than impulse, when you can remain calm amid wild price fluctuations—you have already surpassed 90% of market participants.

There is no endpoint to this journey, only continuous evolution. Start today by building your system, recording your trades, and managing your risks. In the wild world of crypto, be a strategic surfer, not a drowning swimmer.