Discipline is the only talisman for the poor in the financial market, but when a person starts to treat luck as ability, the tragedy is already doomed.
At the end of last year, Xiao Li came to me with 1500 U, his eyes filled with anxiety and the last glimmer of hope. 'Brother, this is the last bit of money I can use; if I lose this, there's really no way out.' He had previously chased after altcoins, experiencing two liquidations, even putting in his daily living expenses.
I didn't instill complex technical indicators in him; I only set three simple rules. To my surprise, three months later, his account net worth actually grew to 42,000 U. But in the end, I chose to press the delete key and ended this relationship.
01 Three Iron Rules, the Way for Small Capital to Survive
The first rule I gave Xiao Li is: “Divide capital into three parts; surviving is the most important.”
Let him divide 1500U into three equal parts, each 500U: the first part is for day trading, watching one trade closely and exiting decisively after making 3%; the second part waits for swing opportunities, never acting lightly unless the price breaks the range; the third part is the last trump card, which must not be used even in case of severe market fluctuations.
Initially, he was dismissive of this, thinking that making money this way was too slow. But when he saw another friend go all in on altcoins and ultimately get liquidated, he finally understood the meaning of diversifying his portfolio.
The second rule is: “Trends are your friend, fluctuations are not.”
The cryptocurrency market is in chaotic fluctuation 80% of the time, with only 20% of the time showing trending movements. I had him uninstall the trading software during sideways phases. I remember one time when Bitcoin was stuck in a sideways pattern for five days, he couldn't hold back and wanted to enter the market, but I firmly stopped him: “Be patient and wait for a key breakout.”
On the sixth day, Bitcoin suddenly chose to break upward, and we seized this 12% market move. Afterwards, he remarked: “It turns out that ‘not acting’ requires more courage than ‘acting.’”
The third rule is the most crucial: “Lock emotions with rules, don’t let mindset influence operations.” We agreed that the maximum loss for each trade should not exceed 2% of the principal, and if profits exceed 5%, he should reduce the position to lock in some profits.
Once, when he was trading Ethereum, the price was about to hit the stop-loss line. He wanted to increase his position to average down the cost, and I directly assisted him remotely in executing the liquidation. Later, Ethereum continued to drop, and he broke out in a cold sweat. From that moment on, he never dared to defy this rule again.
02 Hidden Dangers Behind Success
The three rules seem simple but create a complete trading system: capital management, timing selection, and risk control are all covered. Under strict adherence to these rules, Xiao Li's account steadily grew from 1500U to 42,000U in three months.
But the crisis precisely plants the seeds during times of success.
After the account balance reached 42,000U, Xiao Li's mindset underwent a subtle change. He began to boast about his “achievements” in the group, claiming he had discovered the “holy grail” of trading, and even formed a small circle privately, claiming he would lead more people to “get rich quickly.”
He was no longer satisfied with our agreed steady trading method and began heavily speculating on worthless altcoins. When I advised him against it, he retorted, “Your method is too conservative. If I had listened to my aggressive trading strategy earlier, I would have doubled my money by now.”
As I looked at the message he sent, I suddenly understood: In the financial market, the scariest thing is not market volatility, but those who lose their sense of awe after making money.
03 The True Face of the Coin Circle
I have witnessed too many similar cases. Many people are cautious when they first enter the market, but once they achieve success, they start to throw discipline out the window.
What they don’t know is that even the most professional traders need to continuously follow strict risk management rules. Those who reach the top all have a profound understanding of a set of intricate 'mind-hand rules,' relying on logical thinking and agile responses.
Currently, various chaotic phenomena still exist in the cryptocurrency market. Many projects attract investors through flashy white papers, celebrity endorsements, and community marketing, while the reality is a complete chain of exploiting investors. The price fluctuations of privately issued virtual currencies generally follow a pyramid structure, also known as 'Ponzi schemes' and 'musical chairs.'
In this unregulated market, ordinary investors especially need to stay alert. The People's Bank of China, Shaanxi Branch, recently issued a reminder to warn everyone to beware of virtual currency trading scams and to enhance risk awareness and identification skills.
04 The Final Farewell
Before deleting Xiao Li, I left him with a final message: “From 1500U to 42,000U, you think it’s your skill, but in fact, it’s the power of discipline. When you start to mock discipline, the market will quickly make you pay the price.”
In the world of cryptocurrency, there are new stories of sudden wealth and bankruptcy every day. But those who can survive long-term are never the speculators chasing overnight riches; they are rational investors who understand risk control and adhere to trading discipline.
In this market filled with temptations and risks, your discipline is your best protection. Many people only understand this simple truth after losing everything.
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