Only by preserving the principal can one wait for a bull market.
Some people ask me if there is a shortcut in the cryptocurrency world? My answer is always: if there is, it is to take fewer detours.
Six years ago, I entered the cryptocurrency world with 10,000 yuan, experiencing the ecstasy of tenfold returns in a day and also the despair of losing everything to just a few hundred yuan. The most painful time was when I lost nearly 800,000 due to trusting 'insider information' during a sharp decline; that was most of my net worth at the time. But it was these lessons that gradually helped me understand the survival rules of this market, ultimately achieving a leap from 10,000 to 30 million.
The experiences I share today are not just theoretical; they are hard-earned lessons from real money. Whether you are a newbie or an old hand, I hope you can avoid the pitfalls I have encountered over the years.
Preserving your principal is preserving your opportunities.
Don't put all your eggs in one basket, but also be clear about which baskets are worth putting them in.
My biggest mistake at the beginning was always wanting to go all in. When I saw a certain coin starting to rise, I couldn't wait to invest all my capital, and often ended up buying at the peak. Later, I set a strict rule for myself: no single trade should exceed 20% of my total capital. This way, even if my judgment is wrong, it won't cause severe damage, and I will always have ammunition to continue fighting.
Staying alive is more important than anything else.
The harshest truth in the cryptocurrency world is that bull markets are the main reason retail investors lose money. Why? Because bull markets inflate people's egos, leading them to borrow money, leverage up, and sell their homes to speculate. Once a black swan event occurs or the bull market turns bear, these aggressive behaviors can directly lead to bankruptcy. My principle is: never use money that you need urgently to trade cryptocurrencies, and definitely don't borrow money to trade.
Rhythm is more important than timing.
Learning to stay out of the market is the first lesson for experts.
The misconception of most retail investors is that they must trade constantly. In fact, there may be less than a month in a year when opportunities in the cryptocurrency market are truly worth acting on. Most of the time, the market is either fluctuating or declining. Learn to stay out of the market, be patient like a sniper, and only pull the trigger when you are most confident; your success rate will increase significantly.
Exhausted good news is bad news; this is an eternal rule.
Countless lessons have taught me that when a major positive news is finally announced, it often coincides with the peak price. The market trades on expectations. Truly smart money will quietly position itself before the good news is released and distribute to the latecomers when the news comes out and everyone is excited. Remember: buy on rumors, sell on news.
Your mindset determines your capacity for wealth.
Accept imperfection; no one can buy at the lowest point or sell at the highest point.
I once missed countless good trading opportunities because I was pursuing the perfect entry and exit points. Later, I realized that being able to capture most of the profits from a big wave is already a great success. Don’t try to catch every fluctuation; otherwise, you will be worn out by market emotions.
The power of compound interest is far greater than you can imagine.
Do not underestimate daily returns of 1% or 2%. If you can maintain stable compound interest, the growth of your capital will exceed your imagination. The biggest charm of the cryptocurrency market is not getting rich overnight, but rather achieving compound growth through high volatility. Focus on improving your win rate and profit-loss ratio, rather than pursuing one-time huge profits.
Avoid these pitfalls at all costs.
Stay away from contract leverage unless you are a professional.
I have seen too many people (including myself) stumble in contracts. Leverage amplifies your greed and fear, leading you to make irrational decisions. Newbies die in spot trading; veterans die in contracts. For the vast majority of people, focusing on spot trading is the best way to survive long-term.
Do not trust any 'teachers' with their trades and insider information.
The cryptocurrency market is a battlefield without gunpowder; the money you earn may be someone else's loss. So, why would someone kindly help you get rich? The so-called 'insider information' that reaches you is likely already several hands down, and you may just be the one taking the bait. Independent thinking is the most precious skill in this market.
Plant in bear markets, harvest in bull markets.
The most profitable strategies are often the simplest: buy in batches when no one cares in a bear market, and sell in batches when the bull market is bustling. However, human nature is exactly the opposite; people tend to chase highs in a bull market and cut losses in a bear market. If you can't overcome this, you'll forever be a victim.
Continue learning and establish your own trading system.
The cryptocurrency market changes every day, with new projects and new ways constantly emerging. Money earned by luck will eventually be lost through lack of skill. Only by continuously learning and forming a trading system that suits you can you survive in this market long-term. My system focuses on spot trading, only doing trades that I understand, strictly controlling my position, and always prioritizing survival.
Written at the end.
After six years of trading cryptocurrencies, my biggest insight is: this market ultimately rewards not clever tricks but great wisdom; not short-term aggression but long-term stability.
The three core qualities of a successful trader: passion (you truly love this market), courage (the courage to admit mistakes), and discipline (the discipline to execute plans).
Money is endless to earn, but it can be completely lost. As long as the green mountains remain, you don’t have to worry about running out of firewood. In the cryptocurrency market, staying alive is more important than anything else. I hope my sharing can help you avoid detours, and let’s traverse the bull and bear markets together.
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