Luck fades in the face of rules.
"Teacher, I've blown my account again." Looking at the private message on the screen, I can feel the helplessness and anxiety on the other side. This is a beginner who has just entered the cryptocurrency market for less than three months, and in just a few weeks, he has lost half of his capital.
I asked him: "Do you want to continue trading based on feelings, or are you willing to make money using rules?"
He replied: "Of course I want to make money, but I really don't know what to do."
I gave him six basic trading rules and asked him to strictly follow them. A month later, he sent a message: "Teacher, the losses have stopped, and the account has started to stabilize and recover."
Today, I will share these six practical rules with everyone, hoping to help more confused beginners in the market.
1. Learn to cut losses and embrace small losses.
The money in the crypto space is endless, but your principal can run out. This is the first lesson every beginner must engrave in their heart.
I have seen too many people who, after opening a position, are unwilling to set stop losses. When the price fluctuates in the opposite direction, they pray for a reversal the next second. As a result, small losses turn into large losses, and large losses turn into liquidation. Data shows that once losses exceed 50%, you need to double your investment to break even, which is extremely difficult.
My advice is simple: always set stop losses for each trade. Don't be greedy, don't fantasize. A stop loss is not an admission of failure, but a way to survive longer.
2. Reduce trading frequency, improve the quality of each trade.
One of the most common mistakes beginners make is overtrading. Executing dozens of trades in a single day not only incurs high transaction costs but also has a low success rate.
I had that beginner reduce his daily trades from dozens to at most three. He was initially very unadaptable and felt he would miss opportunities. But after a week, he found that transaction fees had decreased and the speed of his losses had notably slowed.
The market always has opportunities, but not every opportunity belongs to you. Do less, do it well, and only capture the market conditions you are confident in.
3. If you don't understand, stay out of the market; missing out is not scary.
"Missing out is more painful than losing money," this is typical retail investor psychology. Seeing market fluctuations makes one anxious, regardless of whether they truly understand the market direction.
I told them: missing out is just not making money, but losing money is a loss of principal. The former is a small profit, while the latter directly harms your principal.
The crypto market is highly volatile, with daily fluctuations exceeding 20% being the norm. If you can't understand the current market conditions, staying out and observing is the best strategy.
4. Progress step by step, starting with small amounts.
Another common mistake beginners make is hoping for a single trade to turn things around. After a loss, they increase leverage in an attempt to recover quickly, but often end up deeper in trouble.
The rule I set is: start cultivating a sense of rhythm from making 10U. Don't underestimate small profits; consistent small gains over several days will help you build confidence and rhythm.
Remember, the market is always there; do not rush. First, learn to steadily earn small amounts, then consider larger gains.
5. Light positions are the baseline; staying alive is more important.
Those who face liquidation when the market turns are almost all those who operate with heavy positions. Leverage is a double-edged sword; it can amplify gains but also accelerate demise.
I strongly recommend beginners: do not exceed 2% of total capital in a single trade, and do not exceed 30% of total positions. This way, even if you make a wrong judgment, it won't be devastating.
In the crypto market, staying alive is more important than making money. Only by remaining in the game can you seize real opportunities.
6. Unity of knowledge and action; execution is key.
This may be the hardest rule. Many people know what to do, but just can't do it.
I had that beginner write a trading journal every day, recording the reasons, outcomes, and deviations for each trade. Through continuous review, he gradually overcame the bad habit of making decisions based on feelings.
Successful traders do not lack emotions; rather, they have a system to avoid the influence of emotions. When you change your operations from "based on feelings" to "based on rules," you are not far from stable profits.
Written in conclusion.
The crypto market is never short of opportunities; what is lacking is "people ready to seize the opportunities." In today's market, institutional funds are continuously flowing in, with new tracks like Layer2 and AI + blockchain emerging. But for ordinary investors, avoiding significant losses is the top priority for survival.
These six rules seem simple, but very few people can truly implement them. This is also why the market is always a place where a few people make money.
If you are still confused, why not start with these six rules? Replace feelings with rules and systems with luck. Remember, it's not that the market is unfair to you; it's that you need better coping strategies.
The market is always there, but your principal and opportunities may only come a few times. May you stabilize your footing amid fluctuations and walk the path to stable profits.
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