In the world of cryptocurrency, most of those who survive through many market cycles have one thing in common: they have suffered significant losses, but have learned how to protect their capital and maintain discipline. The following rules do not come from theory but are derived from real-world experience – where every mistake must be paid for with real money.

1. Capital Protection – The Iron Rule in All Circumstances

The first goal of a trader is not to make money, but to avoid losing money. Only use capital that you can afford to lose without affecting your life.

For example: if total assets are 100 million, only use a maximum of 20 million to invest in crypto. If monthly income is 8 million, only allocate a maximum of 800 thousand to participate.

More importantly, always set a stop-loss point. A simple but effective rule:

  • If the price breaks the 5-day moving average (short-term) → cut losses immediately.

  • If the price falls below the 20-day moving average (medium-term) → exit all positions, do not hesitate.

No one wants to witness their account drop from 100 million to just a few million – and this can completely be avoided by adhering to this discipline.

2. Rational Portfolio Management

The key to survival is smart position allocation. A safe structure could be as follows:

  • 30% holding major coins (BTC, ETH...) long term – not affected by short-term fluctuations.

  • 50% used for short-term trading based on technical signals, mainly to rotate profits.

  • 20% kept as a reserve fund – only deploy when the market drops significantly.

In a bear market, absolutely do not “blindly catch the bottom.” Wait for a clear upward trend signal.

In a bull market, only buy when there is a pullback, based on trading volume to confirm the strength of the cash flow.

3. Just Master the “3 Charts” – Enough to Trade Effectively

No need to learn too many complex indicators. The combination of three time frames is enough to improve the success rate:

  • 15-minute frame (K-line): find specific buy – sell points.

  • Daily frame (MACD): determine the major trend (up or down).

  • Weekly frame (Bollinger Bands): check if the long-term support zone is solid.

When all three charts give signals in the same direction, the probability of a successful trade will double.

4. Three Habits in Short-Term Trading

  1. Always set a stop-loss order before entering a trade.

  2. Do not average down when the price is falling – a common mistake that causes many people to blow their accounts.

  3. Do not hold positions overnight when the market is highly volatile; always close positions if there is no clear trend.

Conclusion

The crypto market is not for those who dream of getting rich quickly, but for those who understand that capital preservation is a prerequisite for survival. Among thousands of complex indicators and strategies, only discipline, capital management, and simple yet effective trading methods will help investors go the long distance.