Many people lose money in the crypto market not because they don't understand candlestick charts, but because they don't understand 'how to make decisions at every step'—what allows me to survive in the market is turning these 5 seemingly simple questions into 'decision-making habits ingrained in my bones'. They are not 'skills', but 'safety ropes' that help you avoid 'impulsive traps'.
1. Should I take action now? Why?—Use the 'signal checklist' instead of 'I feel like it'
The core is not about 'whether to buy or not', but 'are there reasons that meet the rules'. Newbies often make the mistake of treating 'someone in the group is shouting to buy' or 'the market is up' as reasons for action, while I only look at 'three fixed signals', and I won't act without any of them:
Signal 1: Key point matching: For example, when I trade SOL short-term, I only consider entering when "retracing to the 4-hour MA20 moving average" or "touching the BOLL lower band", at other points, no matter how much it rises, I will not act impulsively;
Signal 2: Indicator resonance: Just having the points is not enough, you also need to look at trading volume (increased by more than 20% compared to the previous 3 K lines), MACD (golden cross or bottom divergence), both indicators must meet before proceeding to the next step;
Signal 3: Exclude interference periods: I set "Non-farm night, 2-4 AM (chaotic fluctuations), major positive/negative news just released" as no trading time, even if the signals are good, I wait for a stable period.
Last December, there was a time when SOL rose to 130U, everyone in the group was shouting "rush to 150U", but at that time, it neither retraced to key moving averages nor had increased trading volume, I stubbornly did not act — later that day, the price fell back to 118U, avoiding a 12U retracement. Remember: the market is never short of opportunities, what is lacking is "opportunities that meet your rules". If there are no opportunities today, there will be tomorrow; but impulsive actions may mean losing even the principal for tomorrow.
2. If I'm wrong, how much will I lose? — First calculate the "stop loss account", then decide "whether to proceed".
Before trading, I do "accounting problems", not "dream problems". For example, if I have 5000U in capital, I can accept a maximum loss of 1% (which is 50U) per trade, then my stop loss amount and position become fixed:
Assume buying ETH, current price 2000U, I plan to set the stop loss at 1980U (drop 20U stop loss, drop 1%);
Available position = stop loss amount ÷ (entry price - stop loss price) = 50U ÷ 20U = 2.5 ETH, corresponding position = (2.5 × 2000) ÷ 5000 = 10%;
If the stop loss price is set lower (for example, 1950U, drop 50U), then the position must be reduced to 4% (50U ÷ 50U = 1 ETH, 2000U ÷ 5000U = 4%).
I never place an order when I haven't "calculated the stop loss amount" clearly — there was a time I didn’t do the math, used 20% of my position to buy SOL, set the stop loss too wide, and ended up losing 150U (which is 3% of my capital), feeling regret for several days. "Tolerable loss" is not a vague "I can bear it", but a calculated "specific number": capital × maximum loss percentage per trade = stop loss amount, then backtrack to position. This way, even if I’m wrong, I only lose "planned money", and it won’t be damaging.
3. If I'm right, when do I exit? — Set a "satisfactory price" in advance and take profits in batches without being greedy.
Novices always think about "selling at the highest point", but end up turning profits into losses; I only earn "planned money", dividing the take profit into two batches in advance:
First batch of take profit (50%-70% position): Set the "risk-reward ratio of 1:2" position. For example, entry price 2000U, stop loss 1980U (risk 20U), then the first batch of take profit is set at 2040U (profit 40U), sell half when the target is reached, and recover "principal + part of the profit" first;
Second batch take profit (30%-50% position): Set the remaining position as a "trailing stop loss" — for example, if the price rises to 2060U, raise the stop loss to 2030U (preserving 30U profit); if it rises to 2080U, raise the stop loss to 2050U, allowing you to earn from the trend without letting profits retract too much.
Last year, ETH rose from 1800U to 2200U, I sold 60% at the first batch at 2040U, and the remaining 40% used a trailing stop loss, finally taking profit at 2180U. Although I didn’t sell at the highest point of 2200U, I made a total profit of 18%, which is much better than many who "waited for the highest point" and ended up losing. "Not eating the last bite" is not a loss, but a discipline to preserve profits — the profit the market gives you can only be considered real when it is realized; being greedy for the last few points may very well return all previous profits.
4. Place the order — like an "execution program", without hesitation or entanglement.
After clarifying the first three questions, placing an order becomes the simplest step. I will first fill out a "trade confirmation form" (even if written in the phone's notes):
Cryptocurrency Entry Price Stop Loss Price First Batch Take Profit Second Batch Take Profit Position Which Signals are Met ETH 2000U 1980U 2040U Trailing Stop Loss 10% MA20 + Increased Volume
After filling out the form, I will stare at it for 30 seconds to confirm there are no omissions, then press the "buy" button without hesitation — because I know, this is not a "gamble", but executing the plan set earlier. Even if the price drops immediately after placing the order, I won’t panic because the stop loss price has already been calculated, and the loss is "within the planned amount".
There was a time when I hesitated for 2 seconds with my finger hovering over the screen while placing an order for SOL, thinking "should I wait for a lower point", but looking at the table, all signals were met, and the stop loss was bearable, so I pressed it immediately — later the price rose 5% within 10 minutes, I was glad I didn’t hesitate. The "hesitation" when placing an order is essentially a lack of clarity on the "first three questions"; if the preparation is sufficient, pressing the button is just "completing the process", and there is no need to be entangled.
5. Wait — replace "market anxiety" with "patience within the rules".
The first thing I do after placing an order is exit the market APP from the background, then do other things: review the previous day's trades, read industry reports, or even just go downstairs for a walk — I never stare at the market waiting for results.
Because I know that when the price fluctuates between the stop loss and take profit, all the "entanglements" are useless: if it rises, I will think "should I take profit early", if it falls, I will think "should I modify the stop loss", these emotions will only make you break the rules.
Once, after I bought BTC, I intentionally went to watch a 2-hour movie, and when I returned, I found that the price had just hit the first batch take profit point, and I sold smoothly; if I had been staring at the market, I might have panicked and sold during a pullback, missing out on subsequent profits.
True profit is not achieved by "staring at the market" but by "waiting for the rules to take effect" — you have already prepared your entry, stop loss, and take profit plans, and the rest is up to the market. There is no need to rush to prove you are right, nor to fear being wrong; waiting for results according to the rules is the best respect for trading.
Finally: the essence of these 5 questions is "to standardize decision-making".
In crypto trading, "chaotic decision-making" is more frightening than "wrong decisions" — many people lose money without knowing where they made a mistake. These 5 questions actually help you transform decisions made "by feeling" into a "step-by-step" process:
First look for "reasons within the rules", then calculate "tolerable losses", next set "how to take profit", then "decisively place the order", and finally "wait patiently".
Every step has its basis, every step has its discipline, so even if there are occasional mistakes, I can find the problem rather than suffer increasing losses due to "emotional consumption". After all, in the crypto market, survival relies not on "always being right", but on "always knowing what you are doing".
