In my six years of full-time trading, I have experienced the ups and downs of life, from being heavily in debt to achieving financial freedom today, realizing a leap in class. During this time, I have ventured into various fields, whether participating in small dog projects, ICOs, or engaging in mining; I have tried them all. Along the way, I have stepped into numerous pits and experienced the battles of the market, but what I feel most deeply is the tempering of the mindset. It has been a journey filled with surprises, as well as disappointments; it is a magical and tempting circle.
I have summarized countless trading skills and strategies, but ultimately found that there is only one method that can sustain profits: simple and direct—buy bravely in a bear market and decisively sell in a bull market. This strategy, seemingly crude, has proven effective time and again, allowing me to profit consistently.
1. For example, if the total funds in the account are 200,000, the client allows you to lose up to 20%, i.e., 40,000, then I suggest your most risky loss plan is: first time 10,000, second time 10,000, third time 20,000. I believe this loss plan still has a certain degree of rationality. Because if you get one right out of three, you can either profit or continue to survive in the market. Not being kicked out of the market is already a form of success, and it provides an opportunity to win.
2. Grasp the overall market trend; trends are much harder to manage than oscillations because trends involve chasing highs and cutting losses; you need to have the determination to hold a position, while buying high and selling low aligns well with human nature. Trading that aligns with human nature tends to make money; it's precisely because it's hard to do that it becomes profitable. In an upward trend, any violent pullback should be seen as an opportunity to go long; remember what I said about probability? So, if you're not in the car or have gotten out, patiently wait for a 10-20% drop to boldly buy more.
3. Set specific profit and stop-loss targets; profit and stop-loss can be said to be the key to whether one can make a profit. In several trades, we must ensure total profit exceeds total loss. Achieving this is not difficult if the following points are met:
① Each stop-loss ≤ 5% of total capital;
② Each profit > 5% of total capital;
③ Total trading win rate > 50%: If the above requirements are met (the profit-loss ratio is greater than 1 and the win rate is greater than 50%), profit can be achieved; of course, you can also have a high profit-loss ratio with a low win rate, or a low profit-loss ratio with a high win rate.
As long as you ensure total profits are positive, total profits = initial capital × (average profit × win rate - average loss × loss rate).
4. Remember that excessive frequent trading is detrimental; since Bitcoin perpetual contracts trade 24/7, many newcomers trade every day, almost every trading day in a month. As they say: those who often walk by the river will inevitably get their shoes wet. The more you trade, the more likely you are to make mistakes, and after a mistake, your mindset deteriorates. Once the mindset changes for the worse, you might act on impulse, choosing 'revenge' trading: it could be against the trend or heavily leveraged. This will lead to one mistake after another, easily causing huge losses that may take years to recover.
1. The illusion of getting rich quickly: the most expensive cognitive tax in the crypto circle.
In every late-night trading group, there are always people sharing 'hundredfold coins' K-line screenshots; these carefully cropped local bull market curves are like the siren's song, enchanting speculators. A certain unknown project token suddenly surged 500%, and a student achieved financial freedom with living expenses; these beautified tales of getting rich are essentially carefully designed cognitive traps.
The typical mode of operation by market makers is being continuously replicated: creating a wealth effect through price manipulation → attracting retail FOMO emotions → unloading at high prices to complete the harvest. A certain animal coin project crazily achieved a market cap from zero to 10 billion in three months, ultimately going to zero after the founding team cleared their holdings, leaving hundreds of thousands of accounts with zero balances.
Data doesn't lie: CoinMarketCap statistics show that 93% of tokens launched in 2023 have halved in price within three months, and 79% of projects stop updating their code within a year. These numbers expose the truth behind the myth of sudden wealth—the collective illusion created by survivor bias.
2. Wealth alchemy: cracking the survival code of the crypto circle.
The blockchain technology revolution is reconstructing the value internet, but 99% of cryptocurrencies will ultimately go to zero. True value discovery requires penetrating the glamorous packaging of white papers to see the essence of technological innovation. While most people are obsessed with the coin trading game, a few awake individuals are researching breakthroughs in zero-knowledge proofs, analyzing TPS data of Layer 2 solutions, and tracking the real adoption rate of decentralized storage.
Investment master Peter Lynch's 'stone-turning theory' is still valid in the crypto circle: turning over 100 stones may discover 1 hidden gem. An institutional researcher found, by tracking GitHub code submission volume, that a certain privacy protocol project's development activity was three times that of its competitors, and ultimately this project surged tenfold during the bear market.
Position management is Noah's Ark through the bull and bear markets. A professional trader uses the '532' allocation strategy: 50% in Bitcoin and Ethereum, 30% in mainstream public chains, and 20% for exploring new sectors. This structure kept losses during the 2022 bear market under 15%, far below the market average.
3. Time compounding: the ultimate algorithm in the crypto world.
When most people pursue 'doubling in a month,' true wise investors are practicing the '30% annualized' snowball strategy. A certain crypto fund achieved a 47-fold return through a cross-cycle investment strategy in the complete bull-bear cycle from 2018 to 2023, proving that slow is fast in investment philosophy.
On-chain data analysis reveals astonishing patterns: addresses holding Bitcoin for over three years have a profit probability exceeding 95%. These 'diamond hands' investors have experienced at least one drop of over 50% and ultimately earned an average excess return of 8.3 times during the 2021 bull market.
Building a cognitive moat is more important than chasing hot trends. A DeFi researcher spent 300 hours studying automated market maker mechanisms, foreseeing its revolutionary value when Uniswap was just launched; a $10,000 early investment turned into $2.7 million two years later, which is the best illustration of knowledge compounding.
In this 24-hour non-stop trading digital jungle, the true wealth code has long been written into the genes of blockchain: technological innovation never stops, market volatility is always present, and human greed is eternal. When we let go of the delusion of 'a villa by the sea for one coin' and instead delve into the blockchain value network with an entrepreneur's mentality, time will ultimately reward the patient with the richest rewards. Remember: in the crypto world, living long is a thousand times more important than earning quickly.
Trading rules
1. Cherish your chips; never lose everything. You have to stay at the table to win. This market does not profit from luck; it is your patience, experience, accumulation, persistence, and logic that lead to profits.
2. Learn to review and summarize; it is essential to reflect daily and ideally form it into written records.
3. Small dog coins are a financial game, political perspective > money perspective ≈ cultural perspective > pure construction perspective; joining the election narrative Pnut] > Sotheby's Ban ≈ traditional cultural cult > ordinary project party issuing coins (project party's money > project party's strength) / pure meme.
4. The moment you can't help but want to show your profits is when you should take profits.
5. Maintain emotional stability in positions, do not self-FOMO, retreat when profits are available from non-top narratives.
6. If you don’t get in on the leading coins right away, don’t go for the second-tier; wait for the next leading coin; believe that the strong will remain strong!
7. When encountering a hot market, rush in without fear of chasing highs; when faced with certain opportunities, use market sentiment to judge the top, not the price. (Example: Trump)
8. Doubling must return the principal; this market is not about who earns more but who lasts longer.
9. Dynamic thinking looks at narratives; the development of narratives often goes in the opposite direction of static thinking logic, due to external forces.
10. Only enter during an upward trend, do not bottom fish during a downward trend; there are eighteen layers of hell below bottom fishing.
11. Memes are essentially a game of attention; think about who will see a coin and who will pay for it.
12. Opportunities are always available, and the next one may be better; if you miss out, preserve your principal and wait for the next opportunity.
13. Establish your own trading logic; for opportunities that belong to you, bet heavily, and do not envy money outside your logic.
14. What hinders your ability to make money is not the market, but your own greed, fear, impatience, and hesitation. Not entering, turning profits into losses, or selling too early—all indicate an inability to manage your emotions.
15. Avoid junk; disperse your focus. Allocate your limited energy to the most valuable.
16. Prejudices in the human heart are like mountains; never be biased. Approach new things and narratives with an open mind. If you don't understand a narrative, start with a small position; once in, research with a completely different mindset. If you don't achieve big results after investing, you won't completely ruin your mindset.
17. Small narratives must run within the day; 3-5 million is basically the peak for small narratives; most small dog narratives barely reach 1 million, while large narratives peak at 200-300 million and beyond depends on emotional fermentation.
18. Do not jump into a suddenly surging old coin with a small pool; those who have already positioned themselves will have entered earlier, and getting in now just provides them with exit liquidity.
19. Preserving the principal is the first principle; let profits run, only then do you have a chance to catch the big dog.
20. Long-term trading should not exceed your cost line due to FOMO; bottom fishing in reverse will infinitely raise your cost.
21. When the market cap/LP and trading volume of a token are severely imbalanced, when the market cap is very low while trading volume is very high, the best strategy is to add some LP to earn transaction fees.
22. The primary market is a market of small bets against big ones; never think of big bets against big ones, and definitely do not think of big bets against small ones.
23. Quantify every trade: for instance, 1.5 times to return the principal at 50%, then sell 10% for every further 1.5 times increase; prohibit margin replenishment, somewhat similar to the cap strategy; buying 1000 USD at 100k to 100 million can still yield 130k in excess returns while significantly reducing risk (the reason for 1.5 times the principal at 50% is that often it may not reach 2 times, but top opportunities like Trump can consider not returning the principal).
24. Before heavily buying any coin, consider whether I can bear the risk if it goes to zero.
25. Bet small for big without a stop-loss; when betting big against big, you must set a stop-loss.
26. Many top profits come from KOL small accounts; you need to follow these small accounts to buy, allowing the KOL large accounts to help you exit liquidity.
27. Do not average down; if you are stuck, avoid increasing your position to average down costs, as it often backfires in short-cycle speculation.
28. After a big loss, a summary must be made immediately, preferably written down word for word, giving yourself time to calm down. Do not rush to turn the tables; it is easy to get impulsive; this situation may also occur after a loss when unwilling to exit, blindly increasing positions to bet on a rebound.
29..Prohibit high-level margin replenishment.
30. Memes are a track that bets small for big rewards; do not bottom fish (there will always be newer, better, and cooler narratives for everyone to FOMO into); just take the first wave.
