Staring at the numbers on the screen, I recalled the version of myself eight years ago who was burdened with 18,000U in debt. Now, making a net profit of 220,000U in a single day, this is not luck, but a methodology that has been repeatedly validated by the market.
In 2018, I hit the lowest point of my cryptocurrency career. A foolish operation left me with 18,000U in debt, which was an astronomical figure for me at the time. I remember those nights, tossing and turning, contemplating whether I should just give up.
But I did not give up.
Eight years later, my asset scale has reached 48,000,000U. This is not a myth, but the result of over 2,600 days and nights of persistence and execution. I had no insider information, nor did I catch some miraculous bull market, I just mechanically executed a simple yet effective 'foolproof method.'
Today, I want to share six trading rules summarized over the years, hoping to help you avoid detours.
01 Survival first: risk control is the top priority.
A day in the crypto world is like a year in the human world. This saying not only describes the fast-changing market but also hints at the nature of high risk. I have seen too many people become rich overnight, only to return to square one the next night.
My first rule is: never let yourself get out.
This means: absolutely never invest with essential living funds, and do not touch high leverage. In the early days, I used to go up to 100 times leverage and experienced the taste of instant liquidation. Now, my actual leverage rarely exceeds 3 times, and position control is extremely strict, with a single altcoin position not exceeding 5% of the total position.
Preserving capital is more important than making money. In a bear market, I learned to wait with cash, sometimes for several months. This requires immense patience, but it is also the fundamental reason I have survived in the crypto space for eight years.
02 Market sentiment is a contrarian indicator.
When the market is in panic and everyone is shouting to 'cut losses and exit', it may be the best time to buy. When everyone is flaunting profits and the media is extensively reporting that the bull market has arrived, maybe it's time to consider taking profits.
One thing I learned is that market sentiment is often the best contrarian indicator.
At the end of 2022, while the market was in despair, I gradually built positions that quarter. This was not blind bottom-fishing but a decision based on the market sentiment reaching an extreme state of fear. Similarly, when the frenzy spread at the beginning of 2024, I gradually reduced my positions. Although I missed the peak, I also avoided the subsequent crash.
Learn to go against the flow, rather than blindly following the herd; this is a key step in the transition from an ordinary trader to a mature investor.
03 Volume is the true language of the market.
K lines can be drawn, news can be fabricated, but volume often reveals the truth.
I have summarized several volume-price relationships:
Rapid increases and slow declines often indicate accumulation: after a quick price rise, a slow retreat with gradually shrinking volume may indicate that the major players are accumulating.
Rapid declines and slow increases often indicate selling: after a quick price drop, a slow rebound with low volume is often a signal for selling.
High-level sideways movement with low volume needs to be cautious: when prices are high and sideways, but volume continues to shrink, it is very likely to change to a downward trend.
Volume increase and stabilization at the bottom is a signal: in the bottom area, after a price fluctuation with reduced volume, a sudden increase in volume may indicate a signal for major players to build positions.
I have basically abandoned various complex indicators; now I mainly look at price and trading volume. Indicators can only help you optimize entry points, but what truly determines profits and losses is the judgment of the overall market trend.
04 Event-driven is the accelerator of profit.
Traditional technical analysis often fails in the crypto space because the impact of news, policies, or a sudden event far exceeds that of technical charts.
I have experienced several event-driven markets:
Sudden policy changes leading to instant surges and drops;
Statements from well-known figures can drive the movement of the entire sector;
Continuous rise triggered by project technological breakthroughs or important collaborations.
Identifying hotspots in advance and laying out potential event-driven targets can often yield excess returns. But this requires you to have an in-depth understanding of the industry, continuously track project dynamics and policy changes.
This means you cannot just focus on price charts; you also need to take time to study the fundamentals and track industry dynamics.
05 Position management is both an art and a science.
Even if the direction is judged correctly, if position management is improper, it may also result in losses. I have summarized a set of 'three non-principles':
Do not over-invest: at any time, a single cryptocurrency position should not exceed 30%, and total positions should not exceed 80%.
Do not go all in: build positions in batches and take profits in batches. I never buy or sell all at once.
No leverage: especially high leverage, is the fastest way to eliminate capital.
Position management is not only a risk control measure but also the cornerstone of stable mindset. When your position keeps you awake at night, it means you are already over-leveraged.
I tend to operate with low leverage or even no leverage, which allows me to hold the positions without being washed out by short-term fluctuations.
06 Mindset determines the final profit and loss.
The essence of trading is a game of mindset. I have seen people with top-notch technical analysis continuously lose due to poor mindset, and I have also seen those with average skills but stable mindsets consistently profit.
Key points in cultivating the right mindset:
Dare to hold cash: most of the time, you should be on the sidelines waiting, only having funds available when opportunities arise.
Not greedy and not fearful: take profits in batches when goals are reached, and decisively exit when stop-loss is triggered.
Unity of knowledge and action: after formulating a trading plan, strictly execute it, and do not easily change due to market noise.
Accept losses: losses are part of trading; the key is to learn from them rather than being swayed by emotions.
Cultivating mindset takes time and experience. I have gone through multiple liquidations and setbacks, gradually honing a relatively calm mindset. Every loss is a lesson, teaching me something new.
I remember one time, I held a cryptocurrency that had already gained 30%, but according to my plan, it hadn't reached the profit-taking point. My inner voice told me to 'take the profit', but I insisted on waiting. As a result, the price retraced, and I lost most of my profits. Although I earned less that time, I maintained discipline, and discipline is the guarantee of long-term profitability.
The crypto space is not short of opportunities; what is lacking is patience and execution. Over eight years, I have witnessed too many people come and go. Those who can truly survive and achieve stable profits are often those with their own trading systems, stable mindsets, and the ability to persist in execution.
Every setback is an opportunity for learning and improvement. Stay rational, and I wish you successful investments!
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