Why do most people fail to make money? Ultimately, it’s because their cognition hasn't kept up. They always think about short-term trades for quick profits, but they haven't even grasped the most basic 'survival rules'.

Today I'll share with you the 6 practical rules that I have learned from real money experience; if you understand them, you can at least avoid 80% of the pitfalls.

First sentence: Wait for a breakout at high-level consolidation, don’t rush into low-level consolidation.

When a coin is stagnant at a high position, it's like climbing a mountain halfway up; either you gather strength to reach a new high or you lack stamina and fall down. Stagnation at a low position is even more dangerous, like lingering at the edge of a cliff; a moment's inattention could lead to a new low.


Last year, a friend followed the trend and bought a high-position stagnant altcoin without waiting for a breakout signal. As a result, after half a month of stagnation, it plummeted directly, losing 40% before he cut his losses. Remember: before the direction becomes clear, it's better to miss out than to buy randomly. Wait for the breakout or breakdown signal before taking action; this is ten times more reliable than guessing blindly. Mainstream coins still have volatility logic, and the stagnation of altcoins is more of a 'disguise before the big players offload'. Don't become a bag holder.

Second sentence: Don't reach out during the stagnant phase; rises and falls are unpredictable and can easily trap you.

When the price is stagnant, it’s like bargaining at a market, going up a bit and then down a bit, with no certainty. Trading at this time is no different from gambling with your eyes closed — you’ll get trapped eight out of ten times.


When I first entered the market, I fell into this trap: watching an altcoin stagnate 'very steadily', I rushed in wanting to earn a swing, but it stagnated for half a month without movement. Unable to resist, I cut my losses and switched coins, and just after I sold, it surged 20%. Later, I realized: stagnation is the big players 'testing patience'; they only move after retail investors can’t hold on any longer. The 24-hour trading in the crypto space is even more grueling; why should we be the 'chives that get cut'?

Third sentence: Buy on bearish lines, sell on bullish lines; newbies must not learn blindly.

Old coin investors often say 'buy on the dip, not on the rise', meaning when the price closes in a bearish line (falling), you can observe opportunities, and when it closes in a bullish line (rising), you should be alert to risks. But this rule has a premise: you must understand 'true bearish vs. false bearish' and 'true bullish vs. false bullish.'


For example, if a mainstream coin closes in a bearish line during an upward trend, it may be a short-term correction, and buying at this time is likely to earn; but if it closes in a bullish line during a downward trend, it may be a 'trap for temptation', and chasing it will surely get you trapped. Newbies without market feel should refrain from acting rashly; instead, practice 'trend judgment' — check whether the daily line is stable above the moving average, whether the volume is supportive; otherwise, it's easy to go in the wrong direction, mistaking a correction for a decline and a temptation for a reversal.

Fourth sentence: Slow drops and rebounds are exhausting, while sudden drops and rebounds come quickly.

The 'posture' of a price drop is very important: if it drops slowly, like an elderly person walking, the rebound will also be sluggish, going up a bit then back down; but if it suddenly accelerates and crashes (like a spike), it's like being pushed, and the rebound often comes quickly and violently, allowing for a rapid recovery of some losses.


On the day of Bitcoin's sharp drop to 312, I bottom-fished a rapidly declining mainstream coin, and the next day it rebounded 8%, allowing me to take timely profits; while another slowly declining altcoin dropped for a month before rebounding, and when patience ran out, it just started to rise after I sold it, which was infuriating. Remember: in a sharp decline, look for 'repair opportunities after panic' (especially for mainstream coins), while in a slow decline, 'wait for the trend to reverse before entering' (as slow declines in altcoins are usually precursors to going to zero).

Fifth sentence: Pyramid-style building has a premise of buying more as it drops.

The core of value investment in the crypto space is 'pyramid building': if you have confidence in a coin, start with a small position to test the waters; the more it drops, the more it proves to be 'cheap'; then increase your position to lower your cost. But there’s an ironclad premise: you must truly understand the value of this coin; don’t treat 'air coins' as treasures.


I operated with Ethereum in this way; when it dropped 30% in last year's bear market, I increased my position, and after another 15% drop, I increased my position again. Now, not only have I broken even but I've also made a 60% profit. However, if you don’t understand the value and buy recklessly, like 'buying more as it drops' for altcoins without real use cases, you will only get deeper into the trap — the key to this rule is not 'buying more as it drops', but 'buying more as it drops for mainstream coins with an ecosystem.'

Sixth sentence: After a big rise or fall, there must be stagnation; keep a close eye on the direction of the change.

After a significant rise or fall in price, it will definitely enter a stagnation period, just like needing to catch your breath after running. At this time, two types of operations are most taboo: panicking and selling everything during high-level stagnation (which may sell before the launch), and being greedy and buying everything during low-level stagnation (which may buy at the start of a decline).


The correct approach is to closely monitor the 'signal of change': if a high-level stagnation breaks below the support level (like the MA30 moving average), decisively liquidate without hesitation; if a low-level stagnation breaks above the resistance level (like previous high resistance), quickly follow up to avoid missing out. Last year, during that wave of AI concept coin market, how many people 'cut losses' out of fear while it was stagnating at a low level, only to see it double after the breakout, and then regretted it — but remember, a 'breakout' for altcoins might be the last temptation, while the breakout of mainstream coins is more reliable.

Finally, I want to say: making money in crypto is about 'cognitive differences'; first learn to survive, then learn to earn.

Nine years in the crypto space have taught me the harshest truth: it's not that the market is bad, it's that you don't understand the 'temperament of the crypto market' (24-hour volatility, high leverage temptation, risk of altcoins going to zero); it's not that you can't make money, it's that you haven't adhered to the 'rules of not losing money.'


These 6 rules seem simple, but not many can put them into practice. Some people always think about 'getting rich quick' by leveraging and chasing altcoins, but end up unable to preserve their principal; while others steadily practice 'not losing the basics', using mainstream coins for swing trading, and end up gradually making a lot of money.
Remember: the crypto space has never been a 'casino', but a 'battlefield of cognition'. First, learn to avoid pitfalls (don’t touch air coins, don’t use high leverage, don’t ignore stop losses or profits), then figure out how to make money; this is the way to stay for the long term. If you can fully understand these 6 sentences, you can at least surpass 80% of retail investors — the rest can be left to time and trends.

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