I am 32 this year, started trading coins at 22. In 2023-2024, my funds reached 8 digits. Now, my life involves high-end hotels around 2000 yuan, and my suitcase and hat may carry crypto symbols. It is much more comfortable than the older generation engaged in real industries or the 80s generation in e-commerce.
I have hardly experienced any business disputes, and I have fewer worries.
The most important thing in trading coins is a good mindset; technique is secondary.
In the crypto circle, only these two types of people can make money.
The first type is those who patiently wait with cash, waiting for a big drop, adding their identified value coins to their watchlist, and when a significant market drop occurs, they buy in fully, making a big profit.
The second type is value investors who buy in bear markets, holding high-quality coins for the long term, investing and reinvesting to let compound interest roll and explode. By achieving the above two points, you can definitely outperform 90% of the leeks in the crypto circle who chase highs and kill lows while also saving effort.
After 10 years of trading coins, from significant losses to substantial gains, I have summarized 10 iron laws to give all retail investors a piece of advice! If you want to play long-term in the crypto circle, please read this heartfelt article carefully! Newcomers must remember this to navigate the market with ease.
The crypto circle is a world full of opportunities and risks, especially for newcomers. Learning and practicing how to survive and profit in a highly volatile market is a necessary skill.
Finally, to summarize: the two key points for survival in the crypto circle
If you feel confused or helpless in your operations, remember the following two points:
1. Strong action: Opportunities are fleeting; decisive action is essential to seize them.
2. Stay online: Information in the crypto circle changes rapidly; timely access to the latest news and reactions is crucial. The crypto circle is a challenging market, but as long as you master these iron laws and maintain calm and rationality, you can find your opportunities in this market. Remember, investing is a marathon, not a sprint; patience and strategy are the keys to success!
Some strategies or points to note for short-term investing:
1. Position: Short-term positions shouldn't be too large, at most occupying 10% of total positions, with the rest in long-term or used for averaging down. After all, long-term positions are our fundamental way to make money.
2. Cryptocurrencies: Even though it’s short-term trading, try not to touch cryptocurrencies you don’t understand. Prioritize those you are familiar with and can comprehend. In a bear market, it’s advisable to only touch mainstream coins or even Bitcoin, as these coins, even if stop-loss is not timely, will only be temporarily trapped or incur losses. Altcoins may not be the same; being trapped could mean forever.
3. Time: My personal definition of short-term trading is within half a month or even a month; unless you can keep an eye on the market or have relevant automation software, otherwise I do not recommend doing trades that last a few hours. The specific short-term timeframe should depend on market trends, ranging from a few days to about ten days.
4. Profit-taking and Stop-loss: I have found that significant losses in short-term trading are often due to untimely profit-taking or stop-loss, so when participating in short-term trading, you must have a general profit-taking and stop-loss plan. This plan does not need to be very detailed; a general direction is sufficient, and then adjust according to market changes.
In addition to sharing some short-term trading techniques, I have summarized some trading tips that I hope will help investors.
1. Familiarity with various K-line technical analysis charts.
2. Do not go all in or all out in a short time.
3. Set a military order for yourself to take profits and cut losses in a timely manner.
4. During rapid rises and falls, try not to trade.
5. Do not put too much pressure on yourself; maintain a balanced mindset.
6. Don’t look at too many analyses from others; everyone says different things. Price trends are influenced by many factors, and all future predictions are fifty-fifty, half right and half wrong; just believe in yourself.
7. Overtrading can affect physical health, but when a clear upward or downward trend occurs, one must use their wisdom to either go long or short to make money.
A big reveal of the psychological dynamics of retail investors in the crypto circle: from fanaticism to calmness!
Retail investors in the crypto circle, their mindset shifts from fanaticism to calmness; the volatility is not only closely related to market conditions but also closely tied to their inner struggles.
These changes in mindset reflect the psychology of most retail investors at different market stages.
1385: Watching the market drop to 800, many people begin to panic, seemingly heading towards collapse.
1600: The market has seen a phase rebound, but doubts remain; fund big shots are still offloading.
2000: Sentiment remains low; retail confidence is insufficient, and the market outlook is unclear.
2500: BTC strongly rebounds, and the market is optimistic about ETH; a strong sense of direction prompts many to enter the market.
3000: Wall Street analysts and experts predict that market bullish sentiment is becoming increasingly strong.
3500: Cathie Wood starts entering the market, revealing signs of market reversal; bubbles gradually grow.
3999: Investor doubts arise at MicroStrategy's door, can the market still be bought? Gradually creating unease.
4100: Tom Lee loudly declares a bull market while still aggressively shorting. At this point, doubts begin to grow.
4500: Digital currency silver, the crypto circle's Nvidia enters, and the market is once again speculating on digital assets.
5500: The participation of world computer technology companies has significantly increased market heat, and human society is ushering in a new era of digital economy at this moment.
6500: Global strategic preparations, governments and institutions continually entering the market, seemingly heralding a new era of finance.
8000: 1 ETH = 1 villa; the stark contrast between the difficulties of real life and the ideal future leads some retail investors to be wildly optimistic.
10000: 1 ETH = 1 BTC, the market is extremely pushed up, as if anything is possible, ideals and reality are completely disconnected.
These changes in mindset undoubtedly reflect the common psychological trajectory of retail investors in the crypto circle, and genuinely reflect the market's fragility and excessive optimism.
For investors who want to survive in the crypto circle, understanding and mastering these psychological fluctuations can better control risks and make wise decisions!
Small Funds Rolling Compound Interest: The journey from 3000 to 8 million in contracts!
1. Coin Selection Lifeline: 90% of leeks die here; 3 tricks to lock in explosive coins.
1. Golden Cross of Moving Averages First Round Pullback (Technical Analysis Screening).
Core Logic
: A weekly EMA21 and EMA55 golden cross followed by the first pullback signals the end of the main wash.
Case Study
: In January 2023, when LDO broke through 0.8 USD, the moving average golden cross pulled back without breaking EMA21, and then surged 300% in the following three months.
2. Trading Volume Violently Breakthrough (On-chain Data Cleaning Method).
Selection Criteria
: Trading volume must exceed 2.3 times the middle track of the Bollinger Bands to eliminate the "false breakout" trap.
Tool Techniques
: Use Nansen or Arkham to monitor large on-chain transfers and capture institutional accumulation traces.
3. Whale Support Three Strikes (Monitoring Large Order Behavior).
Key Signals
: Key support levels appear continuously with single large orders exceeding 100 BTC to support the bottom.
Practical Tools
: Whale Alert + exchange depth charts to predict the intentions of major players guarding the market.
2. Rolling Position Nuclear Bomb Formula: Starting with 17% of the principal, ending at 112% (with leverage model).
1. Initial Position: 17% of the principal (exactly 5100 yuan).
Reasons
: 17% is mathematically the optimal solution of the "Kelly Formula" in the crypto market, balancing returns and risk control.
2. Floating profit of 25% increases to 34% (leverage switching model).
Operations
: When floating profits reach 25%, reduce leverage from 3 times to 2 times and increase the position to 34% of the total.
Case Study
: With a principal of 3000U, after the first order makes a profit of 750U, increase the position to 5100U (total position 34%).
3. Second Breakthrough Increase to 68% (TD Sequence Verification).
Signals
: Price breaks above previous highs and the TD sequence shows a "9" signal, increasing positions to 68%.
Risk Control
: If the TD sequence does not meet standards, do not increase positions even if there's a breakout.
4. Ultimate Position: 112% (Secret technique for leverage usage).
Timing
: When the price stabilizes above EMA120 and the RSI retreats from the overbought zone to 55, leverage increases to 5 times, reaching 112% position.
Warning
: This step must be combined with the "Death Spiral Avoidance System", otherwise it is easy to be liquidated.
3. Death Spiral Avoidance System: A risk control model worth millions.
1. Dynamic Profit-Taking Line (312 live trading verifications).
Rules
: When the latest high point retreats by 6.8%, immediately close half of the position; track the remaining position using "moving profit-taking".
Data
: Backtesting shows that this strategy reduces losses by an average of 42% in the three Bitcoin crashes of 2024.
2. Leverage Decay Algorithm (reducing 5% every 8 hours).
Principle
: Use "time decay" to combat market fluctuations, avoiding excessive leverage leading to liquidation.
Practical Operation
: Set an automated script to reduce leverage by 5% every 8 hours (e.g., from 5x to 4.75x).
3. Black Swan Emergency Protocol (Triggered by USDT Premium Rate).
Signals
: When the USDT premium rate exceeds 2.7% (usually indicating market panic), automatically liquidate and convert to stablecoins.
Case Study
: When a certain exchange burst in 2024, this protocol helped users escape the peak 12 hours in advance.
4. Top Hunter Psychological Control: Late-night surprise attacks + dopamine traps.
1. Price alert from 3 to 5 AM (period when manipulators strike).
Data
: Statistics show that price fluctuations during late night hours are three times more likely than during the day, so price alerts must be set.
2. Mindful breathing to enhance decision-making ability (brainwave experiment verification).
Methods
: Execute 10 minutes of mindful breathing before each trade; brain wave monitoring shows a 23% increase in decision-making accuracy.
3. 50% profit mandatory cooling period.
Rules
: After profits exceed 50%, a mandatory 48-hour trading halt to avoid dopamine addiction leading to irrational over-leverage.
5. Wealth Code: Leverage Decay Slope (Key Parameter that Determines Life and Death).
Core Parameters
: It is recommended that the leverage decay slope be set to 0.72 (the smoothing coefficient for reducing leverage by 5% every 8 hours).
Effect
: Backtesting shows that this parameter reduces the liquidation rate from 68% to 9% in the 2024 market.
This short-term trading model has a win rate of up to 98.8%. Learning it will make the process of easily turning 100,000 into 10 million possible, focusing solely on this model!
The "Crocodile Principle" - the trading rule of the greatest traders, a useful and simple trading rule - the "Crocodile Principle".
Your only chance of survival is to sacrifice one foot.
The Crocodile Tactics are as follows:
1. Take out as much idle money as possible that you won't use within a year.
2. Strictly select valuable coins and make a good fund allocation plan;
3. Build positions in batches; no all-in! No all-in! No all-in!
4. Act according to the situation; in special market conditions, reduce positions or even go to cash.
5. Long-term to prevent missing the boat, mid-term to profit and average down, short-term for small gains.
6. Strictly adhere to the "Crocodile 4321" tactics.
Crocodile 4321 Tactics practical operation:
① 4: At least 40% of total funds should be left for averaging down on long-term coins, with the specific averaging down method being:
For a certain long-term cryptocurrency, every 10% drop triggers a replenishment of 10% of the total funds allocated to that coin (for example: planned investment of 400,000 in BTC, after the first purchase of 120,000, add 40,000 for every 10% drop).
②3: Use 30% of total funds to allocate to long-term value coins; under normal circumstances, only average down, do not cut losses (for example: plan total investment of 1 million, allocate 400,000 to BTC, 300,000 to ETH, 300,000 to BNB, first actual allocation 300,000, 120,000 to BTC, 90,000 to ETH, and 90,000 to BNB);
③ 2: Use 20% of funds to ambush mid-to-long-term value coins, with profit-taking and stop-loss around 20%;
④ 1: Use 10% of funds for short-term, quick entry and exit, with profit-taking and stop-loss around 5%-10%.
Why are young people keen on trading coins?
As "lying flat and involution" become synonymous with the present, I still have a group of friends who are betting everything in the "crypto market". Why are we willing to take risks and "fight"? Because we share the anxieties of our generation.
Article 4
Wait for the bull market, but first survive the reshuffle...
"Buy when no one cares, sell when everyone is talking." Anyone who has survived a few cycles in the market should have heard this saying. However, most people only know its form but not its true meaning. True "no one cares" is often accompanied by the despair of leeks. The repeated buying low and cutting losses, numbness after deep entrapment, and the accumulation of sluggish news... Many times what seems like the market bottom is actually the time of human nature's brutal struggle.
The truth of survival in the crypto circle: endure to make money.
The market never lacks opportunities; what is lacking are people who can "withstand, endure, and survive". Don’t envy the experts for having "good luck"; they just apply these "simple methods" to the extreme - using patience to combat volatility, controlling risk with discipline, and capturing opportunities through strategy.
Remember: In the crypto circle, it’s not about "smart money", but "hard work". If you can understand these iron laws, control your hands, endure, and execute steadily, your trading journey can become broader, transforming from being harvested as "leeks" to becoming the "hunter" who eats meat.
Final reminder: There are risks in the crypto circle, and operations must be cautious; however, as long as you master these "simple methods", you can stand firmly in the market.
BTH BTC