The first principle of iron rules is 'control desires and protect the principal.' I always adhere to the 'three no principles': no borrowed funds, do not invest beyond one's capacity, and do not chase highs and sell lows. In the bear market of 2018, many people leveraged to buy the dip, resulting in liquidation and total loss. I used 80,000 as the principal, only took out 20,000 to try small coins, while the remaining 60,000 was securely placed in mainstream coins. Despite fluctuations, the principal was preserved, laying the groundwork for future rebounds.
Technical analysis must be integrated into daily operations. I habitually judge trends through candlestick patterns, for example, when 'three white soldiers' appear, it often indicates an upward momentum; 'three black crows' may signal a downward trend. In 2020, Litecoin formed a 'morning star' pattern at the bottom. Considering the increase in trading volume, I decisively bought a portion. Not long after, Litecoin experienced a surge, letting me taste the sweetness of technical analysis.
At the same time, moving averages are also an important reference. When the short-term moving average crosses above the long-term moving average, forming a golden cross, it is a good buying opportunity; conversely, when a death cross appears, one must be wary of the risk of decline. In 2021, Ethereum's 5-day moving average crossed above the 60-day moving average, I judged that an upward trend was forming and increased my position moderately. The subsequent increase validated my judgment.
The execution of profit-taking and stop-loss must be decisive. I set a profit target of 100% to reduce my holdings by half, and I firmly stop-loss at a 15% loss. Once, when investing in a new coin, it had a good upward momentum, and at 100% profit, I timely reduced my holdings. Later, due to negative news, the coin plummeted, allowing me to retain most of my gains. On another occasion, the coin I bought did not perform as expected, and when it hit the 15% stop-loss line, I sold without hesitation, avoiding greater losses.
In the crypto space over the years, I have seen too many people fail due to greed and blindness. From 80,000 to tens of millions, there is no secret, just adherence to iron rules, good use of technology, and maintaining rationality in the market to achieve financial leaps in the unpredictable crypto world.
