Hello everyone, I am Brother Sanma! Two houses in Singapore, one for family, one for leisure. Trading cryptocurrencies for 13 years, from a guy with only 10,000 in his pocket, I have struggled and fought to achieve several small goals. Hey, don't envy me, it's not based on insider information, and it's certainly not from my ancestors' grave smoking, but entirely on a set of simple methods, the early bird catches the worm, and I've made it to today! In these 2880 days, I've seen a lot of storms in the crypto world, and today I'm giving you this set of life-saving and money-making 'dumb' principles for free! Understand one rule, lose less by 100,000; if you can follow three rules, congratulations, you’ve already outperformed 90% of the retail investors!
Let me first talk about my 'five golden rules for survival' (this is the foundation! If the foundation is unstable, the building collapses quickly!):
1. “Cutting losses without injuring bones and muscles” iron law: For a single trade, no matter how much I lose, it must not exceed **2%** of my total capital! Just think about it, losing 2% is like scraping a bit of skin, just let it heal; if you lose 10% or 20%, that's like breaking an arm or leg – how do you expect to recover? Remember, as long as you are alive, you can output!
2. “Leverage is a double-edged sword” iron law: Using leverage? Fine! But **never exceed half of what I can actually bear**! For example, if I can lose 100,000 without blinking, then I should only treat myself as being able to lose 50,000 when using leverage. Don't listen to people who say 'take a chance and turn a bike into a motorcycle'; if leverage goes wrong, you won't even have your shorts left! **“Leverage should not exceed three, live longer than others”**, this saying is worth remembering!
3. “Make big profits and small losses” iron law: Before I place a bet, I think about it, if this trade is right, **the profit must be at least three times the amount I am prepared to lose (profit-loss ratio ≥3:1)**! Is it worth it? This calculation must be clear! Lose 1 and make 3; this deal is worth doing.
4. “Bad luck means stop trading” iron law: If I hit stop-loss three times in a row? Immediately close the software! Stop! Today is not a good day for trading! Don’t be stubborn, don’t disbelieve; the market is slapping you in the face telling you 'stop playing!' Forcing it at this time is likely to be giving away money. Stop, have some tea, watch the show, and come back when your luck turns.
5. “Locking in profits” iron law: Did you make money this week? Great! But don’t get carried away! **Withdraw 20% of your profits every week**, and keep the real cash in your pocket! This is to reward yourself and also to lock in profits, preventing you from impulsively giving it back. If profits aren't taken out, they are just paper!
Alright, with the foundation laid, let me give you some 'dumb rules' from my practical experience to help you navigate the market:
Trend section (look at the direction):
“Moving averages aligned smoothly, price pullbacks are buying points!” – Trend is upward, moving averages are in a bullish arrangement, pullbacks are opportunities to get in, don’t be cowardly!
“Don't rush when you see new highs, wait for it to pull back and stabilize before getting in!” – When the price breaks through a previous high, don't rush to chase it; it's easy to get stuck. Wait for it to pull back and confirm stability before getting in; that’s the real breakthrough, so you can confidently invest!
Risk control section (saving your life is important):
“Stop-loss is like a talisman, you must carry it wherever you go!” – Always set a stop-loss when opening a position! This is your life-saving charm! Don't complain about the hassle, don't fantasize, 'saving your life is the first priority'! “Leverage should not exceed three, live longer than others” – emphasizing it again! Don't be greedy! Controlling leverage is controlling risk; living long allows you to laugh last!
Psychological section (maintain your mindset):
“Long and short trades are a common meal, tighten the wallet and wait for the wind to come!” – It's normal to jump around in the crypto world, and long and short kills are common. At critical moments, you need to control your hands, protect your principal, and wait for the opportunity that truly belongs to you!
“When others panic, I get excited; when they cry about liquidation, I find buying points!” – When the market is in panic, and cries of liquidation are everywhere, that's when I open my eyes wide to find cheap chips! This is contrarian thinking, but the premise is that you have to survive until that moment!
Volume-price section (understand the dynamics):
“Rising without volume is a fake show, if it drops with volume, run quickly!” – Price is rising, but trading volume is sluggish? Be careful! This could be a false rise, ready to collapse at any moment. Conversely, if there’s a sudden surge in volume during a drop? Run quickly! The main forces may be dumping!
“High volume accompanies high prices, low volume at the bottom requires patience!” – When trading volume explodes to a high level, and the price also reaches an extremely high position? This often signals a potential top. If trading volume shrinks to a low level, and the price is stagnating at a low point? This may indicate a bottom area, requiring patience to wait.
Timing section (hit the right rhythm):
“Asian markets fluctuate, European markets follow, but the US market sets the tone!” – Asian markets often have narrow fluctuations, European markets may follow suit, but real big trends often depend on the US market's performance!
*“Fridays are notorious for causing trouble; wrap things up before holidays!” – Friday is the contract settlement day, which can easily lead to unexpected events and high volatility. Before major holidays, uncertainty is high, so it’s better to close positions early and secure profits to enjoy the holiday peacefully!
Lastly, let me highlight the 6 key insights that can help you lose less by 100,000 and surpass 90% of retail investors:
1. “Don’t get off when it’s rising fast and falling slowly; the operator is secretly accumulating!” The price is going up quickly, then slowly coming down? Don’t panic! This is mostly the operator washing the plate, getting rid of the unsure retail investors, and quietly absorbing goods! What’s scary is the kind that has a massive volume surge and then suddenly crashes; that’s a deceptive 'trap'!
2. “Quick drops and slow rises are traps; don’t catch the falling knife!” The price suddenly crashes, and then slowly rebounds a little? Wake up! This isn’t an opportunity to pick up cheap; this is the operator’s last wave of deception before they run away, trying to get you to take the bait! Don’t believe the nonsense 'it's already dropped so much, how much lower can it go'!
3. “High volume at the peak isn’t necessarily fatal, but low volume in a downtrend is really dangerous!” The price has risen to a high, but is still accumulating volume? Don't rush to declare it dead; there may still be momentum, it can still rise for a while. What’s scary is when it reaches a high, but the trading volume disappears, becoming stagnant, and continues to decline; that’s when a crash isn't far away!
4. “Volume at the bottom isn’t exciting; consecutive volume accumulation is reliable!” Did volume suddenly spike when it hit the bottom? Don’t rush to shout 'bottom fishing'! This could just be a bait. What’s really worth paying attention to is **consecutive days of increasing volume, especially after a long period of low volume and sideways movement**; that’s the signal that the operator may be entering the market to build positions!
So, how about it? Brother Sanma’s straightforward advice is pretty simple, right? This is all experience bought with real money! Remember, in the crypto world, living longer is a thousand times more important than making money quickly! Master this set of 'dumb' methods, strictly implement them, and the next seasoned veteran who survives the bull and bear markets will be you! If you have any questions, feel free to ask Brother Sanma!
