He rushed into the crypto market full of expectations, but ended up losing funds in his account due to reckless operations, and in the end, only had 3600U left, which was even less than the initial investment. He said he couldn't sleep at night, feeling anxious when looking at the account balance, and even considered just cutting his losses and leaving the field altogether.
To be honest, I wasn't surprised at all when I saw his message. Such stories are too common in the crypto market. Before many people enter, they are filled with thoughts of 'becoming rich overnight', thinking that they can easily make money by relying on a few so-called 'insider tips' or complex indicators. But in reality, the core of making money in the crypto market has never been about accurately predicting the market, but rather about making fewer mistakes and sticking to one's bottom line.
I didn’t share those fancy technical indicators with this fan, as complex theories would only confuse him further at that time. I only gave him three 'dead rules' to strictly follow. Unexpectedly, 90 days later, he excitedly came to report good news, as his account balance soared to 30000U, nearly an 8-fold increase! Today, I will share these three rules, along with the experiences I’ve accumulated from 7 years in the crypto market, without reservation, hoping to help more people avoid pitfalls and truly make money in this market.
The first rule: split funds, never go 'all-in'. I told him to evenly divide 3600U into 3 parts, with each part being 1200U, and these three portions must each serve their purpose and absolutely must not be mixed. The first part is for short-term trading, with a maximum of two trades per day; no matter how good the market looks, no more operations can be done. There’s a hard requirement: as long as this trade incurs a loss, stop completely that day, and never hold on with the mindset of 'getting back to break even'. Many people are unwilling to accept a loss, wanting to earn it back immediately, but this results in deeper losses until they lose all their principal. Short-term trading is inherently about earning small profits; steady and solid execution is key, and greed will only harm oneself.
The second portion of money is used for trends, focusing on mainstream coins in the market. The biggest taboo in trend trading is 'itchy hands', wanting to enter the market at the slightest fluctuation. I told him, until a clear upward trend appears, just completely 'play dead', go to work if it's time to work, rest if it's time to rest, and don’t stare at the screen every day. How to judge a clear trend? Just look at the weekly chart; there’s no need for complex analysis. When the trend on the weekly chart is clearly upward and there are no obvious correction signals, then consider entering. Don’t shoot until you see the rabbit; patiently waiting for opportunities is 100 times better than random operations.
The third portion of money is 'emergency funds', specifically used to cope with sudden risks. In the crypto market, liquidation risk is like a time bomb, which can explode at any moment. I told him to save this portion of money; as long as there is a position that triggers a stop-loss that day, he should use this money to replenish the position, ensuring he won’t be completely out of the game due to one accident. I have seen too many people have their accounts wiped out due to a single liquidation and never return to this market again. Liquidation is like amputation; losing a finger can be slowly recovered from, but if you lose your 'life', there is truly no hope left. Therefore, this emergency fund must not be touched and definitely not used for trading.
In addition to these three capital allocation rules, the signals for entering and exiting the market are also crucial. I only have one standard for entering: if the daily moving averages have not formed a bullish arrangement, stay completely out of the market. Many people feel 'uncomfortable being out of the market', always afraid of missing opportunities, but in reality, staying out when the market is unclear is protecting their principal. Wait until the trading volume breaks through the previous highs and can stabilize at the close, confirming that the trend is solid, before entering the market with a small position for the first time. Remember, it's a 'small position'; don’t go all in right away, give the market some room for error, and also leave yourself a bit of leeway.
Before entering the market, there is one more thing that must be done: write a 'life-and-death commitment'. This means setting stop-loss and take-profit levels in advance. I told that fan to set the stop-loss at 5%. No matter how the market fluctuates later, as long as this line is reached, the system will automatically liquidate the position without any room for negotiation. Many people are reluctant to set stop-losses, always thinking 'if I wait a bit longer, it will rebound', resulting in greater losses. As for take-profit, when profits reach 10%, immediately pull the stop-loss to the cost price. This way, even if the market corrects later, at least the principal can be preserved without loss. The remaining profits can be considered a 'surprise' from the market; how much more you earn depends on luck, so don’t be too greedy.
An even more important point is to learn to 'cash in'. I told him, as long as the account profits reach 30% of the principal, he should immediately withdraw half of the cash. Don’t think 'it can still rise'; there are no eternal winners in the market. Taking out the money you’ve earned is what truly belongs to you. For the remaining part, set a 10% trailing stop-loss. If the market corrects and triggers the stop-loss, exit promptly; if the market continues to rise, follow the profit. This way, you won’t miss out on profits and can promptly secure your earnings.
In my 7 years in the crypto market, I have seen too many people who 'run fast'. They chase this hot trend today and speculate on that new concept tomorrow, appearing to make quick profits, but often before long, they blow up their accounts due to a mistake. Conversely, those who can make money and stay in this market for the long term are the ones who know how to 'slow down'. They are not greedy or impatient, strictly executing the rules, first ensuring that they can 'survive', and then slowly accumulate wealth.
There are opportunities in the market every day; there's no need to rush. Many people panic when they see others making money, fearing they will miss out, and rush to enter the market, ultimately losing everything. In fact, in the crypto market, patience is more important than anything else. Lock away your emotions; don’t be influenced by market fluctuations, strictly follow your established rules, survive first, and then you’ll have the opportunity to talk about making money.
I know that many people are still trapped in the vicious cycle of 'earning and losing'. It's not that you lack effort or luck, but rather a lack of a guiding light and a set of executable rules. If you're feeling lost in the crypto market and don’t know how to operate, feel free to follow me. I will share more practical experiences and skills to help everyone avoid pitfalls and truly make money in this market.
Lastly, I want to ask everyone a question: have you ever lost money in the crypto market because you didn’t stick to the rules? Feel free to share your stories in the comments, and let’s discuss your views on these three 'foolish rules'. Follow me for more valuable insights; let’s steadily make our way in the crypto market and gradually become wealthy!
