Five years ago, one early morning, I was awakened by the exchange's red liquidation warning. In just three hours, my account of 6 million was wiped out, and I stared at that flashing negative number, feeling like I was nailed to the cross of reality.
Later, I started to review, summarize, and ask friends, and with borrowed 120,000, I started again. After 90 days, using a 90% win-rate method, I turned my principal into 20 million. The process was extremely painful, but it led to today's five 'iron rules'.
No matter if you are new to the market or currently trapped, please engrave these in your heart.
Iron Rule One: Trading cryptocurrencies is not gambling, but a battle—there must be a 'risk control system'.
The cryptocurrency market is not a casino, it is a battlefield.
A true trader is a warrior, who must have 'armor' and an 'exit strategy'.
You need to learn risk control and position building:
Perpetual contracts ≠ gambling tools.
No matter how high the leverage, as long as the position is light and the stop-loss is clear, it's still low risk.
Using 100x leverage with only 1% of the principal for opening a position and 99% for risk buffer actually makes the risk smaller.
For example, I personally use a principal of 5,000U, only opening orders of 20 contracts or less, setting a trailing stop-loss at 2% profit, and a stop-loss not exceeding 3%. I only trade for 2 hours a day, with emotional stability surpassing everything.
What truly destroys people is not the market, but your lack of risk control + your failure to admit mistakes.
Iron Rule Two: Emotion is not a strategy, discipline is the way out.
Retail investors lose money, 90% die trying to chase highs and cut losses.
Seeing a coin rise makes you fear missing out, leading to a reckless all-in; seeing a coin drop makes you fear it going to zero, leading to panic selling overnight.
Do not act on impulse at the moment:
Before buying, write down 'at what price to buy, where to stop-loss, how much profit to take'.
Increase position when in profit, decrease position when in loss, never average down.
Do not get emotionally swayed by K-lines, only look at 'trading volume' and 'structural changes'.
The truth about price movements is written in the trading volume. Only with volume is there a price; without volume, it must decline.
Iron Rule Three: Only trade the logic you understand, do not chase trends, do not touch emotional coins.
Do not covet the 'myth of getting rich in the crypto world':
The projects that rise the most also fall the hardest.
Following trends is not as effective as focusing on familiar mainstream coins and strategies.
Do not touch coins without independent logic.
If you don't understand the sector structure, don't randomly buy altcoins to catch up.
Bitcoin itself hasn't changed, but its price can rise from 15,000 to 70,000, and it can also fall back to 15,000. This is not 'value changing', but rather market sentiment changing.
What you really need to learn in cryptocurrency trading is 'to understand emotions'.
Iron Rule Four: Do not average down, do not hold positions, do not cling to past prices.
The first step to losing money is averaging down.
Averaging down is 'emotionally wanting to break even', not a strategy.
If your position is wrong, you should stop-loss, not average down.
The mindset of wanting to break even will destroy your remaining capital.
Trading is always about 'process management', not 'result obsession'.
Being trapped is due to not stopping losses, liquidation is due to stubborn holding.
What you lose is not money, but rationality.
Iron Rule Five: Improve a model, stabilize it, then expand.
What beginners fear the most is not inability, but greed leading to chaos and imitation everywhere.
A sense of the market, a technique, a model—first get it right.
Do not look at MACD today, study Elliott waves tomorrow, and chase on-chain data the day after.
Mastering one method is far more efficient than blindly chasing.
Trading cryptocurrencies is not scientific research, you don't need a myriad of skills. You just need an effective system that you can repeatedly use to make money.
Market conditions are unpredictable, but your strategy must be simple, repeatable, and executable.
Epilogue: Remember, you don't get rich from a single strike, but survive through discipline.
You can make big money not because you caught a wave, but because you endured how many crashes, resisted how many temptations, and avoided how many impulsive decisions.
In losses, hold back emotions; in profits, control greed.
The end of trading is 'human nature management'.
Summary (suggest taking a screenshot to keep).
The five iron rules of trading cryptocurrencies:
Risk control first, manage your position, and clarify your stop-loss.
Plan your trades, don't make decisions based on feelings.
Only do logic you understand, don't chase trends.
Do not average down, do not hold positions, and stop losses in time.
Focus on one strategy, achieve stability, then expand.
These five points are the 'life-exchanging experiences' I gained from a 6 million liquidation.
May you who come across this article no longer be prey to the market, but become a true player.