Six Laws for Surviving in the Crypto World: Stay Away from Liquidation, Move Towards Stability

1. Ironclad Profit Taking and Stop Loss:

Profit Taking: Restrain greed, preset goals. The price won't rise forever; taking some profit is success.

Stop Loss: Execute decisively! Abandon sunk costs; exit at the breakout. ‘Amputate to survive’ to protect the principal; the cost of fantasizing about a reversal is painful.

Core: There’s no end to making money in crypto, but the principal can be lost completely!

2. Reject Frequent Trading:

Don’t fantasize about ‘making money on both sides’; being able to profit from one side is enough.

Beware of fees: Especially with high-leverage contracts, there’s an immediate loss (1-2%) upon opening a position. Ensure that potential returns far exceed costs; otherwise, trading is meaningless.

3. Learn to Wait with No Position:

If you can’t understand the market, don’t open a position! ‘Missing out’ is far better than ‘losing money.’

Trading is a probability game; entering when the direction is unclear is like ‘opening a blind box.’ Be patient and wait for high-certainty opportunities. (Hedging can reduce directional risk but is not a panacea)

4. Gradually Accumulate:

Abandon the fantasy of getting rich quickly. Use light positions (e.g., using 100 as capital to open 10x) to steadily accumulate (e.g., earning 10-20 per trade).

Pursue a win rate (60-70%): A few stable trades per day yield far better returns than heavy bets. Little by little, compounding can be substantial.

5. Never Go All In:

An absolute taboo! Black swan events (like sudden bad news) can instantly destroy heavily invested accounts.

Test the waters with light positions, prioritize stability. There are plenty of opportunities in the crypto world (still existing for the next 10-20 years); living means seizing opportunities. Don’t be fooled by short-term illusions.

6. Strive for Unity of Knowledge and Action:

The most difficult but crucial! Overcome human weaknesses (greed, fear, luck).

Eliminate random trading without a plan. Success requires:

A mindset far beyond the ordinary

The courage to act decisively when the timing is right

Discipline to exit decisively at stop-loss

The determination to ‘amputate to survive’

Core Summary:

The key to stable profits is risk control (stop-loss/light position/no position) + disciplined execution (profit-taking/not frequent/not all-in) + mindset cultivation (unity of knowledge and action).

Remember: Protecting the principal is the top priority; opportunities are always reserved for those who are alive and prepared.