I have been in the crypto market for 10 years, experienced three bull and bear markets, from a principal of 8,000 to financial freedom now. I have experienced everything that should be experienced, and stepped on all the pits. The only thing is to cultivate myself well and form my own stable profit system.
My crypto trading career is divided into these stages.
I: Entered the crypto circle with 8,000, caught up with the bull market, and made more than 10 million
II: 10 million was lost to 8 million in debt
III: Then borrowing 200,000 to enter the market to 20 million
IV; From more than 20 million to the current 2 million
V: What is currently in progress, the goal is to wait for the arrival of the next round of bulls to 10 million
Too long, read patiently, I believe it will be very helpful for your investment journey in the crypto circle!
You may question it when you say it, but it doesn't matter. The reason for coming to Zhihu is very simple. Sharing your own things can really help some people and some families. It's worth it! It doesn't matter if you spray it, as long as you know how to make money in the crypto circle.
Below I will explain in detail the experience and pure dry goods of my several stages!
15 Survival Rules for Crypto Circle to Remain Undefeated!
First: Protecting the principal is the only way to survive in the market for a long time.
Principal is the lifeline and must be firmly guarded! Many people neglect risks in pursuit of high returns, ultimately suffering heavy losses.
Second: As long as you are not greedy, making a profit is actually very simple.
Maintain a stable mentality. Earning a little less is easier to accumulate wealth.
Third: Concentrated investment, don't be fully positioned, follow the trend.
Don't blindly diversify investments, avoid full positions, and adjust strategies according to market trends.
Fourth: Avoid heavy positions, don't resist stubbornly, and trade less.
Control your position size, don't stubbornly resist losses, trade appropriately.
Fifth: Be calm when entering the market, be decisive when exiting, and be firm when stopping losses.
Don't rush to buy, make decisive decisions when selling, and strictly execute after setting a stop-loss line.
Sixth: The market's profits are infinite, but losses can be bottomless.
You can't earn all the money, don't be greedy, but losses can exhaust everything.
Seventh: Exit immediately once the stop loss is triggered.
Stop loss is the protection of your account and cannot be hesitated.
Eighth: For long-term and short-term, securing profits is the most stable strategy.
Whether you are doing long-term or short-term, you must ultimately ensure that you secure your profits.
Ninth: The unchanging truth in the market is that things will reverse when they reach the extreme.
Whether it rises or falls, there is a limit and it will inevitably reverse.
Tenth: Don't operate if there is no opportunity, missing it is not terrible.
Don't force yourself to seize every opportunity; it's enough to grab a portion.
Eleventh: Waiting for the right opportunity is more important than blind trading.
Don't rush to look for trading opportunities, wait patiently for more favorable ones.
Twelfth: Stop trading and maintain energy after reaching a goal.
Don't be greedy. Quit in time after completing your daily goals and save your energy for the next trade.
Thirteenth: The stop loss is set by yourself, and the profit comes from the market's reward.
The stop loss is the responsibility of the investor, and the profit is the return of the market.
Fourteenth: Wealth comes from waiting, not frequent trading.
The best investments are often obtained through patient waiting, not constant trading.
Fifteenth: When your mentality is fragile, it is most important to strictly implement strategies.
Desires are easily out of control in trading. Only by strictly executing strategies can we achieve unity of knowledge and action.
One day in the crypto circle is equal to one year in the stock market. People who play crypto trading will no longer have any interest in stock trading. The 24-hour trading and no limit on price increases and decreases in crypto trading satisfy many people's dream of getting rich overnight. This is one of the reasons why virtual currency is most popular, and this is also why losing money in the crypto circle has become a very normal phenomenon.
Every investor who comes to the crypto circle will experience major losses, being liquidated and exiting the market, and encountering profits to losses in their trading career. There is only one type of person who gets rich in the army of crypto trading, that is, people who have experienced bankruptcy and then summarized experience and have a great mentality.
Without experiencing liquidation and major losses, you will never know what a stop-loss is; without experiencing profit to loss, you can never understand the transformation of mentality between heaven and hell.
I. Survival is the first principle.
Sun Tzu said: Those who were good at fighting in the past first made themselves invincible to await the enemy's vulnerability. It is very simple to avoid major losses. Take survival as the first principle, and abandon all other principles when there is a danger that hinders this principle. Because no matter how many 100% excellent performances you have had in the past, as long as you lose one 100% now, you have nothing.
Once your funds are destroyed, you are destined to be eliminated. If you want to play this game well and win the final victory from this game, all systems and rules must be based on the principle of protecting the principal.
II. Correct capital management:
Each success will only take you one small step forward, but one failure will take you a big step backward. This big step prevents the accumulation of funds. The accumulation of funds requires opportunities and time. Human nature is always like this: the pain of losing 1000 yuan is far greater than the joy of getting 1000 yuan. A large loss of funds can easily affect an investor's mentality. A loss of 50% on 1 million becomes 500,000, but it takes a 100% profit to increase 500,000 to 1 million. It takes an hour to walk from the first floor to the top of the Empire State Building. But it only takes 30 seconds to jump from the top floor back to the bottom. You cannot control the direction of the market, so you don't need to waste energy and emotions in situations you cannot control. Don't worry about what changes will occur in the market; worry about what countermeasures you will take in response to market changes. It is not important to judge right or wrong; what is important is how much profit you make when you are correct, and how much loss you can bear when you are wrong.
Every time in the market crowd, I see many people who can bargain with merchants for a long time for the price of a piece of clothing, or go shopping for half a day, but the thinking of investors wanting to buy will not exceed a few minutes. This is the commonality of many people, and it is definitely not what a person who wants to make a big splash in the investment market does. If you want to make a lot of money in the market, investors must be cautious and guard their accounts as if walking on thin ice.
Have a clear operating system when entering the market:
(1) How much money do you want to make in this wave of the market?
(2) How much maximum loss can I accept? If the market pulls back, how much loss must I exit immediately?
(3) I must secure a certain percentage of the profit from each operation;
(4) The method of gradually increasing positions to avoid full positions, and constantly increasing the profit stop-loss level as the profit rises, and never let the profits you already have turn into losses;
(5) Always give yourself a chance to trade again, and operate strictly according to your trading system.
III. The Trend Is the Best Friend
The biggest enemies of trading are waiting patiently for clear market trends and over-trading. A bull market doesn't end in a day, and neither does a bear market. Crypto trading is the kind of place where you don't make a sale for three years, and then you eat for three years. As long as you are patient, wait for the market trend to become clear, find the leading stocks, and hold them until the end of the entire bull market without over-trading, you can get unexpected profits. When the trend comes, respond to it and follow it. When there is no trend, observe it and be still.
Over-trading is also a major enemy of investment. Those who run price differences can only earn a small profit and cannot make big money. Let's calculate the handling fees for over-trading: current virtual currency exchanges charge 0.2% for each buy and sell, meaning 0.4% for one complete transaction. If a trader operates once a day, 365 days a year, the trader will lose 4/1000*365=140% due to handling fees. You read that right, 1.4 times! Think about how Warren Buffett strives for 30%, and you lose 140% of your annual trading fees! Another thing traders often overlook is that the more frequently a person enters and exits the market, the more likely they are to change their minds. As the saying goes, the more you do, the more mistakes you make; the less you do, the fewer mistakes you make; if you don't do anything, you won't make any mistakes. You will also miss big market trends due to excessive trading.
Plan before acting, determine the arrival of the trend according to the clear price break points, popularity atmosphere, trading situation, and capital inflow situation provided by the market, and maintain a broad vision of the market trend without being confused and exiting by short-term fluctuations.
IV. Psychological Quality is the Core
Crypto trading violates human nature. This is a game that determines that only a few people can profit, and most people just provide funds to play with. You need to have a strong psychological quality in trading, and you must have a pattern and mentality of a liquidated universe. If you enter the market with 10,000 yuan and your heart is pounding for the ups and downs of 100 yuan, then I advise you to leave this market as soon as possible, which also guarantees your personal safety. If you have the big mentality of wanting to earn 100 million, then the ups and downs of 1 million will not affect your mentality, because what I ultimately want is 100 million, and 1 million is not within my consideration, so that I have the opportunity to obtain big profits.
Trading is not only a game with large institutions, with market makers, and with retail investors, but also a game with oneself. As the ancients said: It is fun to fight with the sky, and it is fun to fight with the earth. The highest level of struggle is to fight with oneself. Crypto trading is a process of constant psychological struggle, constantly asking oneself, should I sell at this price or keep it? What should I do? This has always been a process of psychological game, which requires strong psychological quality. Also, with good psychological quality, you must also ensure a good physical condition. Good health is the key. Why do people live? People live to have a healthy body and constantly temper their souls in the world.
V. A trading Tao suitable for oneself.
The Tao represents the logic of things, while technique represents the methods and approaches. As the saying goes: If you have the Tao but lack technique, technique can be sought; having technique without the Tao is detrimental to technique. The birth of a trading Tao represents the composition of a person's knowledge, insight, and courage. By constantly rising and falling in the market, one eventually figures out the basic logic of trading, which aligns with the laws of nature.
The biggest enemies of investors are the three psychologies: hope, fear, and greed. Having your own trading Tao also requires overcoming the weaknesses of human nature, hope, fear, and greed. When the market is about to fall, investors should be full of fear, but they feel that there is nothing wrong and are still full of hope; and when the market is rising, they are afraid of callbacks, at this time they should have the greatest hope, but they begin to be full of fear. These are the reasons why traders cannot make big money.
Having your own trading Tao, forming a trading system, helping yourself overcome the weaknesses of human nature, letting profits run when the market comes, and stopping losses when funds are losing money is the foundation for a person to obtain great wealth.
The only type of people who make money in the crypto trading market do not rely on what techniques and methods they use, but on your self-discipline. Crypto trading is sometimes not a battle of strategy but of time and patience.
More than 10 years of crypto trading, now the core secret to a monthly income of 7 figures and an annual income of 8 figures: pay attention to 3 conditions, the success rate of the head and shoulders top reversal signal is increased by 90%!
Many technical analysis beginners may have come into contact with chart patterns such as head and shoulders tops, double tops, and triple tops, but many introductions to these chart patterns are superficial, only telling us what a head and shoulders top is, how to trade a head and shoulders top, etc., but they do not provide detailed explanations of their background and applicable environment, which leads many investors to find that these chart patterns are 'sometimes useful and sometimes not useful' in actual combat.
In response to this situation, I have always emphasized that the environment in which K-line patterns or chart patterns appear is more important than whether the patterns themselves are standard. In order to solve this problem, in today's article, I will start from the market environment and point out some elements worth paying attention to to improve the success rate of chart patterns. It should be reminded that I use the head and shoulders top as an example in this article, but the ideas behind it are applicable to all chart patterns. Of course, this may require us to have a basic understanding of different chart patterns.
Element 1: Trading Volume
Many investors may ask, what should I do if there is no real trading volume data in contract trading? Anna Coulling provides the answer to this question in her classic book (Volume Price Analysis):
The tick volume adopted by contract for difference platforms can almost replace trading volume data, because it reflects about 90% of the real transactions in the market. When the price changes rapidly, it often means that a large number of transactions are taking place in the market. The same is true in the crypto market.
After solving this question, I drew such a virtual chart, through which to deeply understand how to interpret trading volume and chart patterns together.
First look at the left shoulder. At this time, the price is still in an upward trend, and the price decline is just a normal correction. As with previous corrections, trading volume shrinks at this time.
What should really attract our attention is when the head appears. At this time, although the price breaks through the previous high, the trading volume has changed: the trading volume failed to break through the high point during the previous rise, and even shrank compared to the previous rise.
When such abnormal trading volume occurs, regardless of whether the inflection point following the head breaks the previous low, we are already vigilant: a head and shoulders top may be forming soon.
Finally, look at the right shoulder again. The price tried to create a new high again, but the attempt failed. Then, the price broke through the neckline. At this time, we can see that the trading volume increased during the decline, and the head and shoulders top was confirmed.
In fact, some veterans will guess where the top of the right shoulder is when they see the trading volume corresponding to the head area shrinking. When the price has not finished walking on the right shoulder, but a typical reversal pattern such as Pin bar appears again, they will start to enter the short position.
Here we mainly pay attention that if the price is accompanied by an increase in trading volume when it breaks through the neckline, then this head and shoulders top may trigger a relatively large decline.
Element 2: The inclination direction of the neckline.
As a chart pattern, the head and shoulders top itself can also be divided into three different forms. I divide it into three categories here according to different necklines: neckline upward, neckline flat, and neckline downward.
Some investors may ask, what are the differences between these head and shoulders tops? The answer is that the different directions of the neckline inclination usually result in very different trends after the break. We can consider this issue from the perspective of the stop-loss cost line.
Below I have drawn a head and shoulders top with a flat neckline. The dotted horizontal line in the figure is the price position when the neckline support is broken. Which investors are at a loss when this place is lost? Obviously, it is these investors above the dotted horizontal line, that is, investors who went long at the shoulders and head (blue triangle area).
Here I will ask another question: How many people remember what the textbook tells us to do when a head and shoulders top breaks the neckline? Many people may say: Wait for the rebound to test the neckline unsuccessfully before shorting.
Then, from the perspective of the stop-loss cost line, this logic is well explained: after the price rebounds to the neckline position, it is often the last chance for the previous batch of floating loss investors to escape. Therefore, when the price comes here, it is often the time when the rebound comes to an abrupt end.
Next, let's look at a head and shoulders top with the neckline upward. The dotted horizontal line is also the price position when the neckline is broken. When this place is lost, the investors in the color-filled area in the figure have already suffered losses, but it does not include some investors on the left shoulder and head, or even the right shoulder. In this case, the investor's loss surface is significantly smaller than in the case of a flat neckline.
Finally, let's look at a head and shoulders top with the neckline downward. The dotted horizontal line is still the price position when the neckline is broken. When the price breaks below the neckline, its loss surface includes not only investors who went long at the neck and head, but also some investors who started to go long below the left shoulder. The loss surface is obviously much larger at this time.
In addition to looking at it from the perspective of the loss surface, we can also consider it in conjunction with the trend. When the neckline is inclined downward, it has already caused a situation where the highs and lows are gradually decreasing, which already meets the signal of a trend reversal. When the neckline is inclined upward, even if the neckline is broken, it does not mean that the trend has reversed.
Therefore, among these three types of head and shoulders tops, I would be more inclined to think that the head and shoulders top with a downward neckline is more reliable. The second is the one with a flat neckline. As for the head and shoulders top with an upward neckline, we need to pay attention to the second point of the neckline, which is the low point position between the head and the right shoulder, because breaking below this point means that the trend has begun to turn downward, and it may trigger more selling pressure.
Of course, if we can combine it with element 1, trading volume mentioned earlier, the winning rate is expected to be further improved.
Element 3: Head and Shoulders Top and Trend
The head and shoulders top is a high-probability trend reversal signal in chart patterns, but if we know enough about trends, we may have heard another sentence: In trending markets, 80% of trend reversals will fail. These two experiences seem to make sense, but they conflict. How should we solve this problem?
My experience is to take the big trend as the standard, seize the head and shoulders top generated during the callback process, and treat it as a signal that the price is returning to the big-level trend. This may not be easy to understand, please see the picture below:
In the picture above, the blue line represents the downward trend of the large-level cycle, and the trend is advancing in waves. During the price callback process, a series of highs and lows are formed, which is the red trend line in the picture. What we have to do is to look for the head and shoulders top reversal trend at the level of this red trend line in the downtrend.
Careful investors may have also noticed that the rebound at the red line level in the figure also formed a head and shoulders top after rebounding to the previous low resistance. This can also be used as a supplementary principle for us to screen high-probability head and shoulders tops: look for head and shoulders top patterns near resistance.
Trading Head and Shoulders Top: Entry Price and Stop-Loss Settings
After thoroughly reading the previous content, we have learned how to screen high-probability head and shoulders tops, then the next level should be entered: how to trade head and shoulders tops? For example, how to choose an entry price? How to set a stop loss?
For this question, different investors have different methods. Some people like to trade breakthroughs, while others prefer reversals after callbacks. My view is that both are possible. But the key is how to reduce stop losses and increase the profit-loss ratio.
For example, many traditional textbooks may tell us that the stop-loss setting for a head and shoulders top is at the high point of the right shoulder. The advantage of doing this is to prevent being washed out by some repeated oscillations, but the disadvantage is that the stop-loss range is too large if the direction is wrong. Therefore, I prefer to look for entry prices and stop losses from smaller cycles.
In the picture below, I have drawn a hypothetical scenario. If the price consolidates after encountering neckline support, then for investors who like breakthrough trading, we can wait for the price to break below this small consolidation range, and also break below the neckline before entering the short position. The stop loss is placed at the top of this small consolidation range.
Next is another hypothetical scenario, which is also the conventional head and shoulders top entry method: after the price breaks through the neckline, it tests the neckline. If the test of the neckline resistance fails, this is also the position to short. If we look at it from a smaller cycle, we can also look for reversal K-line combinations formed after the neckline test fails, such as evening stars, etc., or if a new narrow consolidation range is formed during the test, then the stop loss can be placed at the high point of the evening star, or above the consolidation range.
It should be reminded here that after the price breaks through the neckline support, it is necessary to observe whether an FVG is formed at this time. If the price retraces the neckline in the form of stepping back on the FVG, then the success rate of shorting here will be greatly improved. Finally, it should be repeated that although my examples today are all based on head and shoulders tops, these principles apply to all reversal chart patterns, such as triple tops, double tops, etc. Understanding the principles behind it in detail can improve our trading skills faster than rote memorization.
The crypto circle is a battlefield where opportunities and risks coexist. Some people get rich overnight, and more people lose everything. If you want to win in this game, you must strictly abide by the rules and stay awake. The following 'Five Don'ts' and 'Ten Must-Do' strategies will help you avoid detours and steadily accumulate wealth!
I. Absolute Taboos! Crypto Circle's 'Five Don'ts' Principle
Don't touch contract leverage.
Contracts and leverage are 'wealth shredders'. 99% of people ultimately get liquidated and go to zero. Market fluctuations are ever-changing, and one mistake can lead to bankruptcy. Remember: Long-term compounding is the king, and a gambling mentality will only lead to zero!
Don't rush into shitcoins, don't play Meme coins.
'Shitcoins' and Meme coins seem like hundred-fold myths, but in reality, there are more scythes than leeks. Project parties control the market, liquidity is withdrawn, and the heat dissipates quickly. Ordinary people are always bagholders.
Don't chase highs, don't speculate on waves.
FOMO (fear of missing out) is the root of losses! Chasing highs after a surge is likely to get you trapped; frequent swing trading can have profits devoured by transaction fees and missed opportunity costs.
Don't click on unfamiliar links.
Phishing websites, fake wallets, fake airdrops... Hacker methods are unpredictable. Only download the App from the official website, verify the links from multiple sources, and asset security is above everything else!
Don't trust strangers to recommend coins.
Group chat 'teachers' and private message 'insiders' are 99% scams. Real opportunities will not be given away by strangers. Independent thinking is the bottom line for survival!
II. Must Be Adhered To! Ten Laws of Financial Freedom
Asset security is the lifeline.
Private key and mnemonic = all your wealth! Never screenshot, don't store in the cloud, don't tell anyone, it is recommended to save offline with a hardware wallet.
Fixed investment in bear market, lying down and winning in bull market.
The bear market is the golden period to accumulate chips! Regularly buy core assets such as BTC and ETH, ignore short-term ups and downs, and wait for the cycle to rotate.
Holding on can make big money.
90% of the profits come from 10% of the time. Frequent position changes will only miss the main rising wave. Set a goal and don't get out of the car easily unless there are extreme market conditions.
Maintain constant cash flow.
The crypto circle is high-risk, never All in! Ensure a stable income to cover life and avoid forced liquidation.
Only choose top-tier exchanges and wallets.
Small exchanges run away, wallet vulnerabilities occur frequently. Funds must be placed on compliant platforms like Binance and Coinbase, and wallets should be reputable products like MetaMask and Ledger.
Staking platform coins, airdrop for free.
Staking platform coins of major exchanges (such as Binance, OKX) is a sure-win strategy. You can earn interest and receive new issuance quotas. Airdropped tokens are ≈ zero-cost lottery tickets.
Keep up with industry trends and improve awareness.
Pay attention to authoritative media such as CoinDesk and CoinTelegraph, join high-quality communities, and learn technology, economic models, and track trends. Cognitive difference is wealth difference!
Only invest in projects with an ecosystem and profitability.
Token value is supported by actual demand! Prioritize projects with active users and sustainable income (such as public chains, DeFi leaders), and stay away from purely speculative air coins.
Diversify risks, scientifically allocate.
Core assets (BTC/ETH) + potential tracks (Layer2, AI, Depin) + small positions for hot spots, the ratio is adjusted according to risk tolerance.
Periodically review and iterate on strategies.
Record each transaction, analyze the reasons for errors, and flexibly switch between bull market and bear market strategies. Refuse to lie flat without thinking.
III. Advanced Suggestions: 3 Things Masters Are Doing
Participate in early ecosystem construction.
Airdrops of new public chains and protocols often reward early users (such as Starknet, zkSync). Interaction, testing, and staking can increase the probability of obtaining them.
Pay attention to on-chain data.
Use Nansen and Dune to analyze whale wallets and fund flows. Data is more reliable than news.
Establish a stop-loss discipline.
Stop loss immediately if a single loss exceeds 10%, and reject the lucky mentality of 'hard-carrying to recover the capital'.
IV. Conclusion
Behind the myth of wealth explosion in the crypto circle is the bloody history of countless people stepping on pitfalls. Strictly abiding by discipline, long-termism, and continuous learning are the only paths for ordinary people to achieve financial freedom. Remember: There are many traps in bull markets, and gold is hidden in bear markets. Those who survive will eventually win the future!
Strong rebound, assets doubled! Follow the old ways, plan ahead, and easily reap big profits.
Keep an eye on: NEWT T
