This year 42 years old, always wearing a faded windbreaker, riding a creaky second-hand electric bike. No one would expect that this ordinary man, who goes to the corner every day to buy soy milk and fried dough sticks, has been struggling in the cryptocurrency world for 7 years and has managed to turn a principal of 500,000 into more than 50 million. He owns 5 houses, 1 for himself, 1 for his elderly parents, and the remaining 3 for rent, with monthly rent enough for an ordinary person's annual salary, yet he still maintains the same life rhythm as he has for the past ten years.

Last week at the teahouse, he was brewing Biluochun tea, slowly sharing the practical principles he had summarized over the years. Although they are called principles, they are actually lessons learned from real money spent, which are more down-to-earth compared to flashy technical analyses.

Rapid rise and slow fall, mostly accumulation

"Do you remember the market movement in the summer of 2020?" Old Zhang took a sip of tea, "At that time, a certain mainstream coin surged from 80 dollars to 120 dollars in three days, then pulled back to stabilize at 105 dollars, swaying back and forth by one or two dollars each day. Many people in the group shouted 'it's peaked', panicking and cutting losses to exit."

At that time, he was focused on the order book and noticed that during the pullback, sell orders were sparse, while buy orders kept popping up at key price points. "It’s like collecting vegetables in a market; the vendors won't suddenly raise the price to the sky; they first spike to attract attention, then slowly pick up those scared chips." Later, that coin rose to over 400 dollars in half a year, and he sold in batches at 380.

Sharp drops are hard to recover from; be wary of selling pressure

The crash in May two years ago left a deep impression on Old Zhang. "Around two in the morning, a certain platform's coin suddenly plunged straight down, dropping 20% in half an hour, then rebounded without even reaching half of the drop, and started to slowly drift down." At that time, he had over 2 million in positions and decisively cleared out when it rebounded to 15%.

"It's like going down a slide; if you fall hard, you want to climb back up but have no energy left. Most likely, the main forces are secretly escaping." He pointed at the tea leaves sinking in his cup, "When funds withdraw, it’s like sand leaking down; it looks slow, but it can’t be stopped at all. That time, many people thought a 20% drop was an opportunity, and ended up buying halfway up, finally losing much more than half."

High volume at a peak does not necessarily mean it's the top

Last year's crazy market for a certain altcoin allowed Old Zhang to thoroughly grasp the tricks of volume spikes. "From 30 cents to 3 dollars, there were two volume spikes in between, and every time someone shouted 'huge volume at astronomical prices'." He found that during volume spikes, buy orders were more aggressive than sell orders, and each pullback never exceeded 15%.

"It's like a concert, the more people there are, the livelier it gets. The real peak is often cold and quiet; the main forces secretly sell off their inventory." That coin finally surged to over 9 dollars, and after the second volume spike, he reduced half of his position, selling the rest at 7 dollars. "A high position with reduced volume is truly terrifying; if no one is picking up the shares, the main forces will have to slam the price down to escape."

Volume at the bottom, more stable after multiple times

In 2019, during the bear market bottom, Old Zhang kept an eye on a small cryptocurrency for half a year. "The first time it surged by 30%, I didn't move, knowing it was likely the main forces testing the waters." Sure enough, a few days later it fell back to its original position. It wasn't until there were four consecutive volume spikes over three months, with each pullback becoming smaller, that he slowly built his position.

"It's like spring plowing; one rain doesn't count, it needs to rain several times for the seeds in the ground to germinate." He remembers clearly that after the fourth volume spike, that coin was quiet for half a month, and then suddenly one day it shot up straight, multiplying 12 times in three months. "A single volume spike is like fireworks; it looks lively, but disperses quickly."

The core of trading cryptocurrencies lies in understanding emotional consensus

Old Zhang's computer doesn’t have complicated analysis software, just one market watching software and a volume indicator. "K-line charts are drawn by the main forces for you to see; trading volume is the real money piled up." Last November, when a certain coin suddenly soared, he glanced at the trading volume and found it was 20 times larger than usual, but it was all small orders buying while large orders quietly sold.

"It's like a vegetable market suddenly packed with people; it looks lively, but if you look closely, there are hardly any real buyers." That day he cleared his positions, and within three days that coin fell back to its original form. "Emotions come quickly and leave even faster; trading volume is the thermometer of emotions."

"The realm of '无' is the key to longevity

In Old Zhang's study, there hangs a character "无" (none), which he wrote himself. "When trading cryptocurrencies, having an obsession is the biggest taboo. You always think this coin should rise, that coin should fall." During the bear market of 2022, he stayed out of the market for eight months, just watching the charts and resolutely not making a single trade.

"It's like fishing; you can't just throw away the fishing rod when there are no fish biting, right?" At the beginning of last year, when the market started, he entered the market leisurely. "Only those who can hold cash can hold onto their chips. Those who feel itchy every day and want to trade will either get cut or run after earning a little money."

Before leaving, Old Zhang said he had seen too many people fall from millions back to zero, and also saw many people double their capital and then float away without knowing who they were. "In the crypto world, money comes fast, and goes even faster. The biggest enemy in trading is not the market, but one's own greed and fear."

Watching him ride off on that old electric bike and disappear at the alley, I suddenly understood that those who really make money in the crypto world are often not the smartest, nor the luckiest, but those who understand restraint and stick to their principles. After all, when the tide goes out, you find out who has been swimming naked, and those who can always stand on the shore through the ups and downs rely on anything but luck.


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