8 years ago, I had only 3000 yuan left in my pocket, and with a mentality of 'giving it a shot', I ventured into the crypto world. No tutorials, no mentors, I relied entirely on my own trial and error, chasing high BTC and losing all my savings, heavily investing in altcoins only to encounter project developers running away, stubbornly enduring the waterfall market and turning from floating profits into deep losses, just the stop-loss alone cost me a down payment for a house.
Now, I have achieved time freedom through crypto trading, but every time I review my trades, I am clear: surviving is never about luck, but about the 12 'life-saving iron laws' forged after stepping into all the pitfalls. Today, I will share the hard-earned insights that I used real money to fill in the traps.
Iron Law 1: Capital is life; without capital, everything is just talk.
How crazy is the volatility in the crypto world? A 50% rise one day and an 80% drop the next is normal. I've seen too many people treat their capital as a gamble, going all-in and completely exiting—without capital, even if you encounter a 10x market later, you won't even have the qualification to enter. Remember: protecting your capital is not being conservative; it's leaving room for future recovery.
Iron Law 2: Greed is the 'accelerator' of losses; guaranteed profits are rarer than making more money.
When I first entered the market, I always thought I could 'eat it all at once,' holding onto more than 10 different coins, hoping each would double. The result was a loss of focus; either I missed taking profits or got stuck with a bad investment. Eventually, I realized: money in the crypto world is endless, but losses can bring you back to square one overnight. Concentrate on monitoring 2-3 quality coins; it's 10 times more reliable than spreading out over a bunch of 'potential coins.'
Iron Law 3: Never go all-in; keep room to withstand black swans.
I once fully invested in ETH at a high of $1,700, only to face regulatory bad news that night, causing a direct 30% drop; my account was halved instantly. Since then, I set strict rules for myself: no single coin position over 30%, always keep 20% cash in total. There is no '100% market'; keeping a backup allows you to respond calmly to sudden fluctuations rather than being forced to sell at a loss.
Iron Law 4: Enter steadily, exit quickly, and stop loss decisively; none of the three can be missing.
Chasing highs and lows is a common disease among newbies; I also lost quite a bit due to impulsive entry in my early years. I later concluded: observe for at least 3 days before entering, confirm the trend before taking action, and don’t be swept away by the emotion of 'missing out means losing'; don’t be greedy when taking profits—once you hit your preset target, decisively secure it. No matter how much paper profit you have, if it’s not realized, it’s just an illusion; once you set a stop-loss line, even if the loss is painful, you must execute it—I've once hesitated for 3 days and turned a floating loss of 10% into a loss of 40%, which was a lesson bought with real money.
Iron Law 5: Stop loss is the last line of defense; if triggered, run without hesitation.
The scariest part of the crypto world isn't losses, but the 'luck mentality.' I've seen people breach their stop-loss lines, thinking there would be a rebound, only to get deeper into trouble, turning a 'small loss' into 'zero.' Remember: stop-loss is not admitting defeat; it's avoiding greater losses. Once the stop-loss conditions are triggered, leave immediately, even if the price rises afterward; missing out once is better than losing all your capital.
Iron Law 6: Real profits are the true security; don’t be blinded by 'paper wealth'.
Whether holding coins for the long term or trading short term, profits only count when realized. In a bull market, I've seen too many people watch their accounts double and hesitate to take profits; in the end, the market reverses, and they lose all their gains. In a bear market, some hope to 'catch the bottom' and end up losing more. The principle of extremes is an iron law in the crypto world: taking profits is essential to secure true gains.
Iron Law 7: Less trading = fewer pitfalls; frequent operations are the source of losses.
When I first started, I could trade seven or eight times a day, always thinking 'more operation means more profit'; the result was significant losses from fees and frequent stop losses due to judgment errors. I later found that in the crypto world, making money relies on 'precise strikes,' not 'busy work.' Most of the time, staying on the sidelines is more important than trading; reducing the frequency of operations allows you to avoid being thrown off by market volatility.
Iron Law 8: Don’t stubbornly resist the trend; going with the flow is the key to long-term stability.
In the crypto world, those who 'go against the trend' rarely have a good ending. I once stubbornly tried to 'catch the bottom' in a bear market, averaging down on every drop and ended up being stuck for two whole years; in a bull market, some sold early due to 'fear of heights,' missing out on subsequent multiple increases. The trend is the best friend; minimize shorting in an upward trend and minimize trying to catch the bottom in a downward trend. Go with the flow to earn stable profits with minimal risk.
Iron Law 9: Don't believe 'insider information'; all rumors are traps.
In the crypto world, 90% of 'insider information' is a scam to fleece unsuspecting investors. In my early years, I believed the so-called information from 'insiders of the project,' heavily investing in a shitcoin, only to encounter a 'rug pull' within a week, losing everything. Remember: good projects rely on technology and ecology, not on rumors. Blindly following the crowd will only make you a 'bag holder' for others.
Iron Law 10: Mindset is more important than technology; uncontrolled desire is the biggest enemy.
What tests people in the crypto world is not technology, but mindset. When profiting, they get carried away and increase their positions to gamble; when losing, they panic and make hasty moves to recover—I've seen too many people fall victim to their mindset. Before trading, stabilize your emotions; don’t be euphoric when in profit and don’t collapse when in loss. Execute according to the rules to maintain clarity amid volatility.
Iron Law 11: Don’t buy coins you don’t understand; the essence of investment is the realization of knowledge.
In the crypto world, new coins are emerging endlessly, but many people don’t even know what the project is about and buy in just for the hype. I once bought a coin simply because it had a nice name, only to find out it was a scam and lost everything. The essence of investment is the realization of knowledge; before buying any coin, first understand its technology, ecology, and team. If you don’t understand it, don’t touch it; don’t turn investing into 'gambling on luck.'
Iron Law 12: Always respect the market; there are no 'perpetual winners' in the crypto world.
In my 8 years of trading, I've seen too many big players fall from the peak and too many newbies go from sudden wealth to quickly losing it all. The market is always right; no matter how much money you've made in the past, don’t underestimate it. Maintain a sense of awe and keep learning and reviewing to stand the test of time in the crypto world rather than being a fleeting phenomenon.
These 12 iron laws have no complex formulas and no profound theories; they are all the essence of practical experience I gained through countless failures and real money. There has never been a 'shortcut' in the crypto world, but there are 'pitfall guides.' The pitfalls I've encountered, you don't need to tread again.
