The cryptocurrency market is not a casino, nor is it an ATM. For newcomers, the most important thing is not to make quick money, but to protect your principal first. Only by surviving longer can you have the chance to win more. I have summarized the pitfalls I've encountered and the nights I've endured into a set of practical experiences, hoping that you can avoid detours.
Before trading, you must solidify your basic understanding. Contracts are divided into perpetual and delivery types; the former has no expiration date and is more suitable for beginners. Many people think leverage is a tool for doubling profits, but it actually hides significant risks. For example, with 10x leverage, if the price moves against you by 5%, you could lose half of your principal. It is recommended to start with 5x leverage for beginners and set stop-losses for every trade, keeping losses per trade between 5%-10%. This way, even if you are wrong, you can still survive.
When selecting a platform, do not be casual; even if the fees seem lower, do not easily try small exchanges. There have been too many incidents of exchanges running away, and the safety of funds is paramount. Binance, OKX, and Huobi are currently recognized as stable platforms in the industry, with spot trading fees controlled within 0.1%. Also, pay attention to hidden costs during contract trading, such as funding rates.
Risk management is crucial for survival. The most taboo action is to hold on without a stop-loss. When floating losses exceed 10%, what you should do is not to 'wait and see', but to exit immediately. Losing one trade is not a big deal; preserving your principal is more important than any technique.
Regarding trading strategies, remember an iron rule: do not rely on luck, but on 'certainty'. When the trend is clear, go with the flow; your win rate will be much higher. For example, in a four-hour candlestick chart, if the short-term moving average is above the long-term moving average, it indicates an upward trend; it is safer to go long at this time. If coupled with a MACD golden cross above the zero line and an RSI above 50, the odds increase even more. When trading swings, do not easily try to catch a falling knife; wait for three consecutive bullish candles to stabilize before considering entering; do not chase high prices when the price deviates too far from the moving average; instead, patiently wait for a pullback.
Many people ask how to operate steadily with an 8,000 yuan principal. I recommend dividing your positions and not going all in at once. Use 40% for an initial trial; if the direction is wrong, stop-loss in time to minimize losses; if the direction is right, use another 30% to add to your position, leaving the remaining 30% as flexible funds. Keeping leverage between 5 to 10 times is relatively safe. Once your account has floating profits, for example, if you earn 20%, it is advisable to lock in part of the profit, such as taking out 320 yuan from a 1,600 yuan profit, and use the rest for further operations; this can effectively reduce drawdowns.
If you only choose one asset to trade, I recommend starting with BTC or ETH. These two have strong liquidity and better resilience to price drops, making them suitable for beginners to practice the basics. Before building a position, first assess the trend and only open a position if the conditions are met. For example, if you use 3200 yuan of principal to open a 5x leverage position, it equals a BTC contract worth 26,000 yuan; set a stop-loss at 25,700 yuan and a take-profit at 28,000 yuan. Review your positions before the daily close to see if you are over-leveraged and if stop-loss has been adjusted with the market; these details determine if you can keep the profits you earn.
Finally, let me remind you of three fatal pitfalls: do not touch cryptocurrencies that experience wild fluctuations; 90% of short-term surges are just schemes for the big players to cash out; do not use high leverage, as the liquidation rate for more than 10x leverage is very high; and do not go all in; even with high confidence, keep 30% cash as emergency ammunition.
The cryptocurrency market is not a place where pigs can fly just because they're at the right place; it is a high-risk battlefield where black swans and gray rhinos take turns appearing. To survive here, it relies not on luck, but on discipline. If you are willing to follow this strategy, you can at least avoid 90% of the pitfalls.
