Old miners who have been in the crypto world for ten years know: those who can survive until the end are not the gamblers who shout 'hundredfold coins' every day, but those who look a bit 'dumb' as rule-followers. This system I call 'Three No's and Six Musts' has no fancy technical indicators, yet it can help you preserve capital during 99% of crashes—after all, in the crypto world, surviving is more important than anything.
Three No's iron rule: First learn not to lose money, then think about how to make money.
First rule: Never chase after price rises; pick up chips in panic.
In 2021, when Dogecoin surged 100 times, the trading app's download volume increased by 200%, and subway stations were filled with ads for 'One Coin, One Villa.' A colleague of mine chased the price at $0.7, only to see it plummet 70% three days later—this is not an isolated case; every peak of a bull market is crowded with price chasers. The real time to buy coins was in May 2022 during the LUNA collapse when the exchange's barrage was full of cries of 'Let it go to zero.' I built my position in batches as BTC fell to 17,600 and later sold in batches when it rose to 69,000.
Trading mantra: When others are showing their profits, I observe; when others panic, I open positions. Don’t shake hands when K-line pulls up, there’s gold beneath the waterfall.
Second rule: Never go all in on a single cryptocurrency; eggs must be diversified in baskets.
I have seen too many people bet their entire fortune on a single altcoin, calling it 'going all in for wealth.' In 2023, a certain AI concept coin surged 300% after launch, and someone invested their entire house down payment, only for the project team to run away the next day. My position is always allocated according to the '532 principle': 50% mainstream coins (BTC+ETH), 30% potential public chains (SOL+AVAX), 20% cash. Even if one day all altcoins collapse, the 50% position in mainstream coins can still protect the base.
Position example: Distribution plan for 100,000 capital.
Asset category proportion specific operation
BTC 30% 24,000 - 26,000 range, buy in batches.
ETH 20% 18,000 - 20,000 range, buy in batches.
Potential public chain 30% Distribute across 3-5 cryptocurrencies, each no more than 6%.
Cash 20% Always keep 20,000 in cash for emergencies.
Third rule: Never be fully invested, keep some bullets for opportunities.
In March 2024, when BTC plummeted from 110,000 to 80,000, I had a follower who got stuck because he was fully invested and watched helplessly as the golden pit at 78,000 went unpurchased. Being fully invested is like using up all your bullets in battle; what the crypto world lacks is opportunities, but what it lacks is the capital to seize those opportunities. My position limit never exceeds 80%; the remaining 20% cash is like a sniper's spare magazine, waiting to be used when a black swan event occurs.
Full position warning:
Market fluctuations prevent additional purchases.
When facing a black swan, you can only passively cut losses.
Missed sudden positive market events.
Imbalance in mentality leads to emotional trading.
Sixth mantra: Use simple methods to earn steady money, don’t believe in getting rich overnight.
First rule: Don't act impulsively on highs and lows, wait until the direction is clear.
The most common mistake beginners make is to chase prices when they rise and cut losses when they fall. In October 2023, when ETH rose from 1,600 to 1,800, many people chased and got stuck. If they had just waited for 4 hours for the K-line to stabilize at 1,800 before buying, they could have avoided the subsequent drop to 1,700. My operation is: After the price breaks the previous high, observe for 24 hours; if the pullback does not break the previous high, then enter; if it drops and breaks the previous low, observe for 24 hours, and sell if the rebound does not break the previous low.
Direction confirmation method:
Upward trend: Closing price above the previous high for 2 consecutive days.
Downward trend: Closing price below the previous low for 2 consecutive days.
Sideways fluctuation: Fluctuation range less than 5% for more than 3 days.
Second rule: Do not trade during sideways periods; this is a leeks grinder.
In May 2024, BTC moved sideways between 95,000 and 105,000 for 20 days, with exchange data showing that retail investors' loss rate reached 78% during this period. During sideways movement, prices jump up and down like an ECG, and the main players use this fluctuation to harvest retail investors who chase rises and panic sell. My approach is: If it moves sideways for more than a week, I turn off the trading software and go read a book or play a game—real big trends never appear during sideways movements.
Survival rule for sideways markets:
Neither buy nor sell, treat it as a vacation.
If you stare at the market for over 1 hour, punish yourself by running.
Transfer funds to stablecoins to earn some interest.
Study the next potential opportunity, don’t idle and operate blindly.
Third rule: Buy on bearish candles and sell on bullish candles, contrary to retail investor thinking.
In December 2023, when a certain DeFi coin showed a large bearish candle, the exchange barrage was full of 'Run!' but I bought 10% of my position at the bottom of the bearish candle, and sold the next day when the bullish candle rebounded 5%. This kind of operation seems counterintuitive, but the principle is simple: during bullish candles, retail investors chase the rise, and main players take the opportunity to unload; during bearish candles, retail investors panic sell, and main players quietly accumulate. I summarized a mantra: 'Buy on three bearish candles, sell on the first bullish candle.'
K-line operation example:
Bearish candle buying point: Closing price is more than 3% lower than opening price.
Bullish candle selling point: Closing price is more than 2% higher than opening price.
Position control: Buy 2% of the position for every bearish candle, with a maximum of 10%.
Fourth rule: Distinguish rebounds by the speed of decline; a rapid drop is an opportunity.
In November 2022, when FTX collapsed, BTC fell from 16,000 to 15,000 in 24 hours. This rapid decline instead triggered a strong rebound, rising to 17,500 three days later. In contrast, the slow decline in June 2023, from 20,000 to 18,000 over 10 days, saw a very weak rebound. The principle is: Rapid declines are mostly panic selling, and the main players take the opportunity to collect chips; slow declines often indicate main players unloading, and there are likely lower points ahead.
Decline classification operation:
Type of decline characteristics operation strategy
Rapid decline: 24-hour drop greater than 5%, observe for 1 hour, no further decline signs. Slow decline: 7-day drop greater than 10%, firmly do not buy, wait for stop-loss signals.
Cliff-like decline: Daily drop greater than 20%, only observe without buying; there may be bigger risks. Fifth rule: Pyramid building method, buy more when prices drop to average down costs.
In 2021, when BTC fell from 69,000 to 28,000, I used the pyramid building method to catch the bottom: bought 20% at 30,000, 30% at 28,000, 50% at 25,000, ultimately averaging down to 27,000, and later sold in batches when it rose to 60,000. The core of this method is: buy more as prices drop, but maintain distance for each purchase. My standard is: buy once for every 10% drop, with each purchase being 1.5 times the previous one.
Pyramid building example: 100,000 capital to buy BTC.
Price 50,000: Buy 10% (10,000).
Price 45,000: Buy 15% (15,000).
Price 40,000: Buy 22.5% (22,500).
Price 35,000: Buy 33.75% (33,750).
Price 30,000: Buy 18.75% (18,750).
Sixth rule: After a sharp rise and fall, do not act randomly before a breakout.
In April 2024, a certain Layer 2 token surged 200% and then moved sideways for 15 days. Many sold everything at the high point, only to see it rise another 50% after the sideways movement ended. Similarly, in July 2023, a certain altcoin dropped 70% and then moved sideways; some bought everything at the low, only to see it drop another 30% after the sideways movement ended. The correct approach is: during sideways periods following sharp rises and falls, only sell or only buy, and wait until the direction of the breakout is clear before taking action.
Signal for sideways to breakout:
Upward breakout: During the sideways period, trading volume gradually increases, and the price breaks above the upper boundary.
Downward breakout: During the sideways period, trading volume gradually increases, and the price breaks below the lower boundary.
Continue to move sideways: Trading volume continues to shrink, prices fluctuate slightly within a range.
The final survival rule: Surviving in the crypto world is more important than anything else.
Last night I had dinner with an old miner who has survived since 2017. He pointed at the trading records on his phone and said: 'Look at these profitable trades; they're actually quite boring. There’s nothing earth-shattering about them, just following the rules strictly.' The most ironic part of the crypto world is that those who shout 'hundredfold coins' every day end up being someone else's hundredfold fuel; while those who seem a bit 'dumb' as rule-followers actually last until the end.
Now my trading software homepage is always stuck with three notes:
When you want to go all in, think about how it felt the last time you got liquidated.
When you want to chase a rise, look at how cold the mountain tops were in history.
When you want to catch a bottom, ask yourself if you can accept a further 50% drop.
The crypto market is not a casino, but a training ground for human nature. This set of 'Three No's and Six Musts' simple methods may not make you rich overnight, but it can at least help you survive in this market that devours without spitting out bones—after all, in the crypto world, surviving means having the chance to see the real sunrise.
