How much do you know about the cryptocurrency world? Here's a guide to tell you

Survival Guide for the Digital Currency Market: Risk Management Advice from Professional Investors

1. Building a Market Cognition System

Asset Allocation Priority: It is recommended to keep digital currency investments within 5% of total assets, prioritizing low-risk assets such as gold and government bonds as the basic allocation.

Investment Tool Selection: Spot trading should be the primary method of operation, with a suggested holding period of no less than 72 hours to avoid consuming principal through high-frequency trading.

2. Contract Trading Risk Warning

(1) Leverage Usage Principles

Mainstream cryptocurrencies' leverage is strictly controlled within the range of 3-10 times.

Altcoins are strictly prohibited from using contract trading.

Perpetual contract overnight positions require an additional 30% margin.

(2) Volatility Period Management

Opening new positions is strictly prohibited from 17:00 Beijing time to 08:00 the next day; this period covers the overlap of European and American trading hours and the Asian early session, with a 63% increase in the probability of abnormal price fluctuations (according to CMC 2023 data).

3. Trader Behavior Correction

Typical Path for New Market Participants:

Spot Testing → Short-term Profit → Exposure to Contracts → Leverage Upgrade → Profit Illusion → Risk Exposure → Liquidation Cycle

Technical Analysis Misconceptions:

Avoid relying solely on minute-level candlestick decisions; it is necessary to combine 4-hour level MACD + RSI indicators for verification, with daily trend as the main directional determination basis.

4. Professional Operating Discipline

Position Management Matrix

Single Asset Position ≤ 15% of Total Position

Leverage Position Margin ≥ 30% of Contract Value

Stop Loss Set at ±7% of Opening Price (Mainstream Cryptocurrencies) / ±15% (Blue-chip Cryptocurrencies)

Capital Curve Management

Weekly return exceeding 25% enforces a cooling-off period.

Stop trading for 48 hours after three consecutive losses.

If monthly drawdown reaches 10%, activate risk hedging mechanism.

5. Trading Psychology Development

Establish a daily trading log system, focusing on recording:

VIX Panic Index at the time of opening and closing positions

Changes in Federal Reserve interest rate expectations

Large on-chain transfer data

Anchor trading decisions with objective data to eliminate subjective emotional interference.