I have seen too many people rush into the crypto market with the fantasy of 'doubling overnight', only to end up losing everything in the volatility. I started with a small capital of 5000U, experienced bear market crashes and bull market frenzies, and now I can achieve stable profits. The core is never some profound technique but engraving the word 'stability' into every step of trading. Today, no empty talk, just practical insights from my countless pitfalls, and after reading this, newcomers will at least avoid 3 years of detours!
1. Three iron rules against humanity, small capital can also compound
The cruelty of the crypto market lies in the fact that 90% of losses come from 'not being able to resist' — not being able to go all in, not being able to buy the dip, not being able to cut losses. I have survived solely thanks to these three hard rules:
Position management: you have to stay alive to earn money. I never allocate more than 15% of my funds to a single asset, no matter how promising it seems; I never go 'all in'. More importantly, after making a profit, I immediately withdraw the principal and only use profits to gamble on subsequent trends. During the bear market in 2022, I used this tactic to preserve 80% of my principal. By the time the bull market rebounded, while others were still recovering, I could use pure profits to increase my position and earn compound interest. Remember: diversification is not about blindly casting a wide net; it’s about giving your principal 'double insurance'. Always keep more than 30% of idle funds to cope with sudden fluctuations.
Go with the trend: don’t go against the market. Early on, I also got lost in various complex indicators trying to predict tops and bottoms, but I ended up losing more the more I traded. I later realized that the most effective strategy is to 'go with the trend'. For beginners, prioritize mainstream assets that have strong consensus and mature ecosystems (like ETH, BTC); their fluctuations are more predictable and have a higher margin of error. During a downtrend, don’t think about 'catching the bottom'; the market never has a 'lowest point', only 'lower points'; during an uptrend, don’t easily exit, as the strength of the trend lasts much longer than your judgment.
Take-profit and stop-loss: engrain discipline in your bones. This is the easiest yet most crucial rule to overlook. I set strict rules for myself: take profits in batches when gains reach 5%-8%, never be greedy; exit immediately if losses reach 3%, never take chances. Last year, I invested in a certain asset and encountered a pullback right after buying; seeing it about to break the stop-loss line, I decisively closed my position, ending up with only a 2.8% loss, while many friends who held on with a 'just wait' mentality ultimately lost over 30%. Remember: taking profit locks in gains, and cutting losses protects your principal; emotional decision-making will only drag you deeper.
Two extremely simple tools that even beginners can use to avoid ineffective analysis;
You don't need to learn dozens of indicators; these 2 'lazy tools' are enough to handle 80% of trading scenarios. I still use them every day:
5-day moving average: the 'lifeline' for short-term trading. For short-term traders, the 5-day moving average is the simplest signal. In a bull market, when the price pulls back to near the 5-day moving average and stabilizes, it is often a low-risk entry point; if the price effectively breaks below the 5-day moving average, it indicates a weakening short-term trend, so reduce positions quickly to avoid risks. The core of this tool is 'not getting bogged down in details'; following the direction of the moving average is ten times more reliable than your own blind judgments.
RSI indicator: capturing the key to emotional reversals. The RSI (Relative Strength Index) can help you gauge the market's 'hotness' or 'coldness'. When the RSI value exceeds 70, it indicates that market sentiment is overheated, and the asset may be in an overbought state, at which point you should be wary of a pullback and consider reducing your position; when the RSI is below 30, the market is likely in an oversold state, and you can look for low-buy opportunities after stabilization. But be careful: I never use a single indicator for decision-making; I combine price trends for comprehensive judgment to avoid being misled by 'false signals'.
Three 'deadly pits' that beginners must avoid; I have seen too many people fall into these traps.
The traps in the cryptocurrency market far outnumber the opportunities; avoid these 3 pitfalls at all costs, stepping into one could lead to total loss:
Believing in 'high multiple myths' and following small-cap assets. There are always various promotions for 'hundred-fold assets' in the market, but for beginners, small-cap assets (especially concept assets with no real application) are extremely susceptible to manipulation; they rise quickly and fall even faster, essentially a 'cutting leeks' game. I once followed the trend and bought a small-cap asset, losing 40% in 3 days; since then, I have never touched such assets again—stable profits rely on compound interest, not luck.
Frequent trading turns transaction fees into a 'bottomless pit'. The cryptocurrency market trades 24 hours, seemingly full of opportunities, but frequent buying and selling only traps you in a cycle of 'small profits, big losses'. Not only do you incur high trading costs, but emotional fluctuations also increase the probability of making mistakes. I now trade an average of no more than 3 times a week, focusing only on high-probability opportunities, and I’m earning more than when I traded frequently before.
Trusting 'trading gods' and insider information. Over 90% of 'guiding teachers' in the market are there to cut leeks; they either make you buy high or induce you to leak asset keys, ultimately absconding with your funds. I have seen too many beginners lose everything because they blindly believed in so-called 'insider information' and invested all their savings. Remember: there are no 'sure-win' opportunities in the cryptocurrency market; your independent judgment is your most reliable 'amulet'.
The core of stable profit: it's not about skills, it's about cognition and discipline;
After trading cryptocurrency assets for 5 years, my biggest realization is: this is not gambling, but a practice that requires patience, discipline, and continuous learning.
Survival is always more important than profit: invest with spare money, never trade on borrowed funds, preserving principal is the key to having a chance to turn things around;
Rules are more reliable than feelings: establish your own trading system, clearly define entry, take-profit, and stop-loss rules, replace emotional decisions with rules, and overcome greed and fear;
Simplicity is the highest realm: the cryptocurrency market changes rapidly, continuous learning is required, but there is no need to complicate simple things. The most effective strategies are often the simplest; the key lies in execution;
The cryptocurrency market is never short of opportunities; what’s lacking are those who can maintain their original intention and adhere to rules. I will continue to share the trend analysis of mainstream assets, my exclusive trading journal template, and practical skills for beginners. Follow me to avoid 90% of traps, using spare money to earn steadily, and thrive in the cryptocurrency market!
