I've seen too many retail investors who can recite candlestick charts perfectly and write out indicator formulas on three sheets of paper, yet their account balance keeps shrinking. It wasn't until last year when I helped a follower review their trades that I fully understood: the real danger in the crypto world is not the market makers, but the trader's own obsessions—fear of stop-loss, urgency to close positions, and greed for certain coins; these deeply ingrained psychological traps are more lethal than any market crash. Today, I will share the pitfalls I stumbled into and the methods I used to climb out, which can help those who understand it to at least avoid losing half a year's salary.
1. How many of these 'psychological pitfalls' have you fallen into?
The most ironic thing about trading cryptocurrencies is this: even when you correctly see the trend, if your mindset collapses, you can ruin a good hand. The times I lost the most in the first three years were when I was trapped by these traps—
1. Treating stop-loss as 'surrender' leads to increasing losses.
Some people always feel that 'stop-loss means admitting they were wrong'; they hesitate to cut losses at a 10% drop, comfort themselves with 'it will bounce back' at a 30% drop, and stubbornly hold on at a 50% drop. But the reality in the crypto world is: what you think is a 'temporary pullback' might actually be the beginning of market makers offloading. I once held a meme coin and hesitated to stop-loss when it fell from 2 USD to 1.5 USD, only to watch it drop to 0.3 USD, seeing my 30,000 principal shrink to just 4,500. I later realized: stop-loss is not about surrendering, it's about leaving a lifeline for your capital, just like wearing a seatbelt in a car—it's useless in normal times but can save your life in an accident.
2. Rushing to close positions for 'comfort', half the profits are gone.
Many people feel restless while holding positions; they panic and take profits after a 2% rise, calling it 'locking in gains', only to see the coin double after they turn away. This stems from 'anxiety dependence'—fear of market reversal, necessitating 'closing positions' for instant comfort. Last year, I bought ETH at 1800 USD, panicked when it rose to 1900 USD, and quickly sold, only to see ETH soar to 2400 USD half a month later. I later summarized a rule: 90% of the anxiety when holding positions is because you haven't set a 'safety boundary' for the trade—like pre-setting a profit-taking level of '30% at 2000' and a stop-loss level at '1700'; with clear rules, you can stabilize your mindset instead.
3. Trying to catch every variety, but end up missing them all.
This is the most common mistake beginners make: wanting to chase Bitcoin when it rises, wanting to follow Ethereum when it signals, and even being unable to resist jumping into small-cap altcoins after a couple of jumps. I once held 8 coins at the same time, watching the market for 12 hours a day, exhausted to the point of bloodshot eyes, only to miss Bitcoin's profit-taking point because my energy was scattered and I lost money on altcoins.
The choice of trading varieties actually follows two iron rules: don’t touch what you are not familiar with, and don’t touch what is not active. For example, if you don’t understand the on-chain ecosystem of Solana, don’t shout 'SOL is a hundredfold coin'; those small coins with daily trading volumes below 100 million U are entirely manipulated by market makers, and entering is like handing over your head. I now only focus on 3 coins, and surprisingly, I make more than when I held 8.
4. Obsession with 'perfect entry' results in missing the entire trend.
Some people always hope for 'prices to rise immediately after buying'; as soon as they are temporarily stuck after buying, they feel restless, and even a 1% drop makes them want to cut losses. But when trading cryptocurrencies, where is 'perfect entry'? In 2021, Bitcoin rose from 30,000 USD to 60,000 USD, with 5 pullbacks of over 10%. If I panicked and exited every time, I wouldn't have caught the main uptrend.
Later I realized: trading is like archery; you aim for the bullseye, not necessarily to hit the 10 ring perfectly. As long as the buying price is within the 'safe zone' (for example, near a key support level), being temporarily stuck at a 10% loss is normal. The real panic should not be about short-term fluctuations, but whether the fundamentals of the coin have changed—like the team running away or regulatory crackdowns; only then should you decisively exit.
2. Three 'anti-human' survival techniques to help you escape traps.
After stumbling enough, I finally understood: trading isn’t about making money from technical skills; it's about making money from 'anti-human' strategies. I’ve used these three methods for two years to slowly recover my account after three blow-ups, and last year I even tripled it—
1. ATR stop-loss method: install a 'safety valve' for your holdings.
Beginners rely on feelings for stop-loss, while veterans rely on data. The ATR (Average True Range) indicator I currently use is simple enough for beginners to understand after one look:
First, check the 20-day ATR value of the coin you bought (for example, if ETH is currently priced at 2000 USD, the 20-day ATR is 100 USD);
Set the stop-loss line at 'entry price - 2 times ATR' (2000 - 200 = 1800 USD).
The benefit of this setup is: it can avoid normal fluctuations (for example, a single-day drop of 5% is not considered a real drop), and also allows for timely exits when trends reverse. Last year, I used this method for BTC and avoided 3 corrections of over 15%; just this point alone preserved 40% of my principal compared to others.
2. 5% position rule: never let a single trade ruin you.
I've seen too many people 'putting all their eggs in one basket' on a certain coin, soaring to the sky when it rises, and directly blowing up when it falls. My position rule is simple and brutal:
A single trade should never exceed 5% of total capital (for example, if you have 100,000 U, you can spend at most 5,000 U on one coin);
The position of a single coin should not exceed 30% (for a 100,000 U account, you can buy a maximum of 30,000 U of any one coin).
This is not about being conservative; it's about saving your life. When FTX collapsed last year, a platform token I held dropped 70%, but since it only accounted for 4% of my total capital, my overall account loss was only 2.8%, and I quickly made it back with other coins.
3. Reverse averaging down method: only add positions at 'key points', don’t act as a 'bag holder'.
Averaging down is not just about adding when the price drops; you need to wait for a 'signal'. The pyramid averaging down method I currently use only acts in two situations:
The price drops to the Fibonacci 38.2% retracement level (for example, if it drops from 2000 USD to 1500 USD, the 38.2% position is around 1760 USD);
Simultaneously, there is a 'bottom divergence' (the price hits a new low, but MACD does not).
For the first averaging down, only add 20% of your capital; add another 15% when it rebounds near the cost price. Last year, I used this method for SOL and averaged down when it fell from 80 USD to 50 USD, ultimately taking profits at 120 USD, earning 30% more than stubbornly holding.
3. In the end, trading is about 'mental accounts'.
My biggest realization after 5 years of trading cryptocurrencies is: once you learn the technology to a certain extent, it’s not about who reads indicators accurately, but who can manage their own 'mental account' well.
Don’t put living expenses into exchanges; this money will make you panic if it drops by 5%;
Only monitor the market 3 times a week; the longer you stare, the easier it is to be swayed by short-term fluctuations;
Before placing an order, write a 'trading journal': what is the reason for buying? Where is the stop-loss point? After writing, you will find that 80% of trades are actually impulsive.
In trading, there is never a 'perfect system', only a 'manageable system'. The psychological traps you can't avoid are actually about not understanding that 'losses are part of trading'—just like you will always encounter red lights when driving; what you need to learn is not to eliminate red lights, but to learn to steady the steering wheel when you encounter them.
If you are also trapped by a certain type of psychological trap (like always chasing highs or fearing stop-loss), you can tell me your situation in the comments, and I will randomly select 5 people to use your actual holdings as examples to teach you how to escape the trap. Follow me, and next time I will share a 'trading journal template' to help you reduce the probability of impulsive trading to below 20%.#稳定币监管风暴 #以太坊突破3700