The cryptocurrency market has never been a casino; it is a battlefield for cognitive realization.
I have seen too many people flaunting their profits in the morning, only to face liquidation by night. I have also seen those silent players achieve exponential wealth growth over the years. In this market, IQ and EQ are not the determining factors; discipline is.
In 2018, I entered this market with 3000U, experiencing the joy of a fivefold increase in assets within 24 hours, as well as the despair of returning to square one overnight. Eight years later, my account has reached over 50 million U.
Today, I will share a few principles of position management that have helped me survive in the market.
One, stop-loss is the best insurance policy.
When I first entered the market, like most people, I always wanted to wait for a rebound after a loss. What was the result? Small losses turned into big losses, and big losses turned into zero.
The market will never change direction because of your prayers. My current iron rule is: as soon as the stop-loss point is touched, I leave the market without hesitation.
I remember one time I heavily invested in a popular altcoin, and it started to drop after I bought it. When it hit the stop-loss point, I hesitated and thought, 'What if it rebounds right after selling?' The result was a further drop of 50%, and I had to exit with a larger loss.
This lesson made me realize: accepting losses is a small loss, while stubbornly holding on is the beginning of a big loss. Setting a stop-loss line and strictly enforcing it is the first lesson in survival.
Two, if you make three mistakes in a row, you must stop.
In the market, the most terrifying thing is losing reason after consecutive losses. When your judgments are repeatedly proven wrong by the market, the problem may not be the market but your mindset.
I set a daily trading circuit breaker mechanism: if I have three consecutive losses, I immediately close my computer and do not engage in any trading for the day.
This point seems simple, but it is the hardest to execute. Because after consecutive losses, people often want to quickly recover, but the result is often more losses. Stop, let yourself calm down, and face the market the next day with a completely new mindset, which often helps avoid more fatal mistakes.
Three, profits must be realized regularly.
No matter how good the numbers in your account look, as long as you haven't withdrawn, they are just numbers. The cryptocurrency market is highly volatile; your account might have seven figures today and shrink by half tomorrow.
I stick to a strategy of regularly realizing profits: every time I earn 1000 U, I withdraw 300 U to my fiat wallet.
This approach has two benefits: one is that it actually secures profits, and the other is controlling the scale of positions. The remaining 700 U can continue trading, but the 300 U withdrawn is already real profit. After eight years, this strategy has allowed me to maintain a stable mindset even in extreme market conditions.
Four, trends are your friends; fluctuations are your enemies.
In a one-sided trending market, leverage is a tool for amplifying profits; but in a fluctuating market, it becomes a killer that consumes capital.
I have seen many newcomers frequently trade in sideways markets and ultimately get harvested from both sides. My principle is: do not open positions easily without a clear trend; I would rather miss out than make a mistake.
How to judge trends? I mainly look at the arrangement of moving averages at the 4-hour level and key level breakthroughs. When the price stabilizes above a key level and breaks out with volume, that is the time worth participating in. At other times, patiently waiting is the best strategy.
Five, position determines mindset, mindset determines success or failure.
Going all in sounds exciting, but in reality, it is a suicidal behavior. I always insist that the position in a single trade does not exceed 10% of the total capital.
This means that even if I have 5 million U in my account, I can invest a maximum of 500,000 U in a single trade. The benefit of this approach is that even if I make a wrong judgment, I won't suffer too much loss and can retain most of my capital, leaving the opportunity for a comeback.
The essence of position control is: trade with amounts you can afford to lose. Only when losses do not affect your mindset will your decisions be rational.
Survive and wait for opportunities.
The biggest charm of the cryptocurrency world is that there will always be big market movements. The ICO boom in 2017, the bull market in 2021, the halving market in 2024... Every few years, there is an opportunity for wealth redistribution.
But most people fall before dawn, not because their skills are lacking, but because they failed to manage their positions and could not survive the market fluctuations.
I often tell team members: we do not need to catch every fluctuation; we just need to have large stakes when opportunities we understand arise. The premise is that we are still at the table when the opportunity comes.
These five iron rules seem simple, but very few have persisted in executing them for eight years. It is precisely these points that differentiate those who profit in this market long-term from those who get eliminated.
Remember, the cryptocurrency world is not about who earns faster, but who survives longer. The key to stable profits lies in position management, not in predicting the market. When you can control your positions and mindset well, the market will become your ATM.
Do you have any memorable risk management experiences in the cryptocurrency world? Feel free to share your thoughts in the comments.
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