In 2014, my father handed me 1 million that he had saved his whole life to trade cryptocurrencies. I confidently claimed I could double it, but after three years, I lost it down to just 200,000. During that time, the arguments with my husband and the guilt towards my father felt like two mountains crushing me, and I even thought about quitting entirely. But making 800,000 from working was too difficult, so I gritted my teeth and started over with the remaining 200,000. Through reviewing my trades, reflecting, and building a system, I now earn a stable income every year to support my family. Today, I share with you 20 iron rules and practical strategies that I've summarized from 10 years of hard lessons, hoping you can avoid taking the wrong path.
1. Rising from Huge Losses: 4 Fatal Mistakes to Correct
1. Blindly believing in "insider information" = handing over money
When I first entered the market, I rushed to buy whatever coins the community said would skyrocket, following the 'experts' and ended up with a bunch of worthless coins, losing everything. It was only later that I understood: 90% of the cryptocurrency market's insider information is bait to harvest retail investors. When others shout out their trades, it is exactly when they want to offload their positions.
2. Not Diversifying = Gambling with Your Life
In the past, I would go in with over half my capital; encountering a black swan would lead to complete liquidation. Now, even for opportunities I believe are great, my position in a single coin doesn’t exceed 20%. Remember: not putting all your eggs in one basket is not just a saying; it’s a lifeline.
3. Not Cutting Losses = Slow Suicide
The worst time was when a certain coin dropped from 50 U to 30 U. I kept thinking it would rebound, but it eventually fell to 5 U, leaving me with just 30,000 from an initial investment of 150,000. My iron rule now is: never let a single stop loss exceed 5%; if it hits, cut it, even if it feels wrong.
4. No Trading System = Headless Chicken
Can’t distinguish between short-term and medium-long-term trading; short-term trades get held as medium-long, and medium-long trades get shaken out as short-term. I later understood: short-term looks at 15-minute K-lines to catch fluctuations, medium-term looks at 4-hour trends to hold positions, and long-term looks at weekly charts to capture cycles; they shouldn’t be mixed.
2. The Core of Stable Profits: Restructuring Trading Mindset
1. Cognition Determines Returns
It was only after meeting that senior who turned several thousand into over a hundred million that I realized: trading cryptocurrencies relies not on technology but on understanding the market. He said: "In the moment of enlightenment, the market becomes a story in your eyes, with each fluctuation hiding the intentions of the main players."
2. 5 Dimensions to Understanding Market Trends
Long and Short Judgement: Focus on the day's high and low points; breaking through the previous day's extreme values is a signal of a trend change
Force Recognition: An increase without breaking through key levels is a trap for longs, and a drop without breaking support is a trap for shorts
Amplitude Code: A sudden increase in amplitude = opportunity has arrived, a decrease to the limit = the eve of a trend change
Graphical Language: Daily charts look for support and resistance; if it hasn’t changed, trade according to the rhythm; if it changes, adjust the strategy
Trend Principle: Avoid short positions in a downtrend and be cautious with short positions in an uptrend
3. Mnemonic Trading Methods Are Easier to Execute
"Bollinger Bands: Open indicates a one-sided trend, contraction indicates volatility; a directional change is a signal for a pullback or rebound"
"In an uptrend, look for support and buy on pullbacks; in a downtrend, look for resistance and short on rebounds"
3. Position Management: A Lifesaving Technique More Important than Technology
1. Six Major Principles Embedded Deeply
Never go all in; always leave at least 30% of your backup capital (50% in a bear market)
Batch Trading: Buy in 3 batches and sell in 3 batches to dilute costs and magnify profits
Light Positioning in Bear Markets (≤50%), Heavy Positioning in Bull Markets (≤80%)
Follow the Market: If the market improves, increase by 20%; if it worsens, decrease by 30%
Keep your positions empty during sluggish markets, but don’t exceed 1 month (you will lose market feel)
Position Switching Iron Rule: Eliminate weak coins that have dropped over 15% every week, and increase positions in strong coins that have risen in the top 20%
2. Practical Position Sizing Case (Taking 100,000 U as an example)
Short-term capital: 30,000 U (single coin ≤ 5,000 U, quick in and out)
Medium-term capital: 50,000 U (single coin ≤ 10,000 U, held for 1-3 months)
Backup capital: 20,000 U (only used when breaking down for averaging down or sudden opportunities)
4. Precision Entry: 5 Entry Logics + 3 Cycle Resonance Method
1. 5 Entry Logics (with applicable scenarios)
Trend Line Entry: If the upward trend line isn't broken, a retest is an opportunity (suitable for medium-term)
Horizontal Support Entry: Enter at the bottom of a range actively contested by the market; a second retest is more stable (suitable for short-term)
Fibonacci 0.618 Entry: Corrected to the golden ratio to stop falling, betting on the end of inertia adjustment (suitable for swing trades)
K-line Pattern Entry: Capture shifts in long and short sentiment when engulfing or hammer candlesticks appear (suitable for intraday trading)
Multiple Signal Overlap Entry: Trend line + moving average + K-line patterns overlapping, the probability is the highest (suitable for heavy positions)
2. 3 Cycle Resonance Method (60% Accuracy Improvement)
4-Hour Direction Setting: Raising high and low points simultaneously = upward trend, and vice versa for downward trends
Finding Points in 1 Hour: Near the trend line and previous lows = entry zone; touching previous highs and resistance = take profit zone
15 Minutes to Seize Opportunities: Only act when a golden cross appears at a key point, and a significant volume breakout is effective
5. Three Major Pitfalls for Beginners to Avoid + Solutions
1. Chaotic Trading System
Problem: Can't control yourself, seeing others making money and following along, with trades outside the system accounting for 60%
Solution: Write the system down on paper (like "only trade coins that are trending upward on the 4-hour chart + have significant volume"), passing on any opportunities that don’t meet the criteria, and checking daily to see if you violated the rules
2. Poor Stop Loss Execution
Problem: Always fantasizing about rebounds, turning small losses into large ones; 80% of losses come from three times of holding onto losing trades
Solution: Set stop losses before opening a position (short-term 3%, medium-term 5%); use the platform's automatic stop loss function, and after a stop loss, force yourself to pause for 1 hour
3. Emotional Trading
Problem: Revenge trading after losses, running away with small gains, unable to hold onto profits
Solution: Stop trading after two consecutive losses, and take half your profits once you reach your expected target to play with the remaining profits
6. 20 Practical Iron Rules (Essence Edition)
For hot coins, swap out when profits reach your target; don’t try to eat from start to end (like last year's FIL, LUNA)
If a coin is consolidating at a high and then surges, you should run; if it’s consolidating at a low and makes new lows, that’s actually an opportunity
When the market is weak, counter-trend consolidation can lead to significant gains; when the market is good, counter-trend consolidation can lead to significant losses
Only increase positions when you're making money; never average down on losing trades (averaging down leads to more losses; cutting losses enables profits to run)
After confirming the bottom, "buy two and sell one" is a healthy upward trend; don’t get shaken out
First look at sectors, then at individual coins (hot sectors have a 30% higher success rate); only looking at indicators is for beginners, and not looking at anything is for gamblers
Volume and price are the root; indicators are shadows; ignoring volume while trusting indicators = walking blindfolded
Top-level players focus on sectors, second-tier on individual coins, third-tier rely on indicators, and the lowest tier gambles
Don’t aim for small profits and risk large losses (missing out on 5% isn’t a missed opportunity, but losing 20% is a disaster)
In a major trend, earn 200%, preserve 80% of profits, and earning another 200% next time is compound interest (better than being tossed around)
My 10 years in cryptocurrency, from losing my father's retirement savings to now supporting my whole family through trading, has taught me that there are no secrets to getting rich quickly in the crypto space, only discipline and systems that are cultivated over time. When you make every trade "right" (in line with your system), making money is just a byproduct.
If you are struggling with losses, try picking 3 out of these 20 rules and stick to them for 3 months; you might see different results. Remember: stable profits come from trading that is never exciting but rather very boring — but that’s the way to survive.
Blindly going solo will never bring opportunities; follow me, and I will take you to explore tenfold potential coins! Top-tier resources!
