In that deep night of 2022, I stared at the remaining 800,000 in my account, my hands trembling. Just three days ago, it was 2,000,000. Because I bet on the Federal Reserve's interest rate hike timeline, I went all-in shorting mainstream cryptocurrencies, and the result was a statement saying 'no tightening of liquidity for now,' which caused me to lose most of my profits from the past six months.
As a veteran who has been in the crypto market for 12 years, I have seen too many people make a fortune during market booms, only to lose their principal due to 'addiction to gambling.' Looking back now, those nights spent refreshing policy statements and staring at K-lines for patterns were all in vain. What truly allows you to survive in this market is not accurately guessing the direction, but holding on to your bottom line.
The pitfalls I've encountered over these 12 years could fill a book, and they ultimately distill into three 'counterintuitive dumb methods'; beginners can at least avoid 80% of losses by following them:
1. Always keep a 'reserve' in your positions, never go all in
Even if you think a certain coin will double tomorrow, only invest 50% of your principal. As for me, even if I am very confident in my market judgment, my position in a single coin will never exceed 30%. The remaining funds are not idle; they are a 'safety cushion'—they can be gradually invested to lower costs when the market declines and can provide timely risk avoidance during unexpected black swan events. During that major market surge in 2020, I made 1.8 million with mainstream coins because I kept 50% of my position, gradually increasing my holdings during three pullbacks, thus not missing out on gains or getting washed out midway.
2. Profit should be 'cashed in for safety' first, refuse 'greed traps'
This is my hard lesson: I lost 1.2 million in 2022 because I was always looking to 'earn a bit more' and reinvested all profits to snowball. Later, I set a strict rule: whenever profits exceed 20% of the principal, I immediately withdraw half to a stable channel. For example, if I earn 100,000, I first transfer 50,000 to a safe account and use the rest for operations. Don't feel 'regretful'; in the crypto market, 'money in hand' is 100 times more important than 'potential earnings'. The 2 million in my account now has accumulated this way, one 'cash-in' after another.
3. Only engage with targets within the 'circle of competence', and stay away from 'strange temptations'
In my early years, I followed trends and bought obscure coins with names I couldn't even pronounce. As a result, the project team ran away overnight, and I lost 300,000 in principal. Since then, I only deal with mainstream varieties that are 'visible and tangible'—those with real technological support, strong community consensus, and a market capitalization ranking within the top 20. They may not rise as quickly as altcoins, but they also resist declines better. The most common mistake beginners make is 'chasing the new and the hot', always thinking 'if others can make quick money, so can I', but forgetting: you can't earn money beyond your understanding; even if you do, you'll lose it back due to your lack of skill.
Old Lin wants to say: The crypto market has never lacked opportunities; what it lacks is 'the people who can survive until the opportunities come'.
Now I see people in the community asking every day, 'Will the Federal Reserve raise interest rates next week?' 'Can I buy this new coin?' I want to advise: don't bet against the market, don't bet against policies; you can't win. The real long-term winners always prioritize 'not losing first, then making money'.
