From chasing highs and cutting losses to learning to 'wait for the wind': the evolution of my cryptocurrency trading strategy
When I opened the trading software and looked at the fluctuating K-line on the screen, I always remembered how I looked when I first bought coins three years ago. At that moment, when my finger pressed the 'buy' button, my heart raced as if it would shatter my chest—now looking back, it wasn't trading at all; it was clearly a blind gamble. In these three years, my strategy, like a crooked tree, has been battered in the storm of losses and has grown wildly in the sun of luck, finally slowly growing branches that can withstand the wind.
Stage One: The rookie running naked following the 'wealth password'
At the beginning of 2022, I was lured into the crypto world by screenshots of 'doubling in three days' shared in my friend circle. At that time, I knew nothing about 'blockchain' or 'consensus mechanism', I couldn't even tell the difference between Bitcoin and Ethereum, yet I dared to transfer all my year-end bonus into the exchange.
My first 'strategy' was laughably simple: watching the messages in the group. Which coin was called out by the 'big shots', and which project announced 'good news', I would charge in with my eyes closed. I remember the first coin I bought was a small one called 'XX Ecosystem'; the group said 'the team has a strong background, it will be listed on the top three exchanges soon', so I bought 50,000 yuan worth. It indeed rose by 20% in the first three days; I was so excited that I got up in the middle of the night to check the market, feeling like I was the chosen one. However, on the fourth day, the project team ran away, and the coin price plummeted to zero— that was the first time I experienced the taste of 'capital evaporation', staring blankly at the screen for half an hour, without even the strength to curse.
Later, I followed the trend of the 'metaverse concept', chased the 'Layer 2 hotspots', and each time felt like being led by the nose by the market. When it rose, I was reluctant to sell, thinking it could go higher; when it dropped, I was even more reluctant to cut losses, comforting myself with 'it will bounce back'. At my most frantic, I changed three coins in one day, stored over a dozen 'insider groups' on my phone, and was still checking the market at three in the morning, afraid of missing out on the so-called 'wealth password'. After three months, my capital had lost nearly seventy percent, and my account balance looked like wood eaten away by termites, full of holes.
Looking back now, I realize I wasn't really trading back then; at most, I was participating in a nationwide guessing game. I only cared about 'how much I could earn if it rises', never considering 'how much I would lose if it falls', and I didn't understand what risk meant— it was like running barefoot on a road covered with broken glass, not bleeding was just luck.
Stage Two: The naive rookie holding indicators like a 'sword of authority'
When I was down to only 20,000 yuan, I finally got scared. I came across a post on the forum titled 'K-line must-learn for beginners', and like grabbing a lifeline, I started to devour the tutorial. Buy on MACD golden crosses, sell on death crosses, throw when RSI is overbought, buy when oversold, bottom fishing on the lower Bollinger band, escaping on the upper band... I took screenshots of these indicators and saved them in my phone album, comparing them one by one against the screen while trading, feeling that I finally touched the threshold of 'technical trading'.
The first time I used indicators to trade, I chose a coin hovering around the lower Bollinger band, with RSI showing 'oversold' and MACD indicating a golden cross. Following the tutorial, I bought half a position in two batches, silently telling myself 'indicators won’t lie to me'. The next day, the coin price indeed rose by 5%, and I quickly sold according to the 'escape at the upper band' rule, earning a few thousand. That day, I was so excited that I treated my friends to hotpot, patting my chest and saying 'trading is just that simple'.
But the good times didn't last long. Once, while trading Ethereum, even though the MACD showed a golden cross, I went all in; the result was that the coin price turned around and dropped by 15%. I stared at the indicators on the screen, like watching a lying child—later I learned that in a choppy market, indicators can frequently 'mislead', like trying to find a path in the fog; the more you trust, the easier it is to fall into a pit. Even more embarrassingly, I learned over a dozen indicators but didn't know which to trust: sometimes MACD would say to buy, while RSI would say to sell, staring at the screen for half an hour, ultimately choosing a direction based on instinct, essentially still gambling.
During that time, I was like a craftsman with a toolbox but no idea how to use it, staring at a bunch of wrenches and screwdrivers, unable to tighten a single screw. Through the ups and downs, I slowly understood: indicators are just tools, not answers. Just like a doctor won’t rely solely on a thermometer to diagnose a disease, in real trading, merely looking at K-lines is far from enough.
Stage Three: Putting a 'brake' on the strategy and learning to deal with risks
The bear market in the second half of 2022 came quickly and fiercely; many coins were left with only scraps. The coins I held also halved, but this time I didn’t panic like before—because I added a crucial component to my strategy: taking profits and cutting losses.
This change stemmed from a painful lesson. When trading SOL earlier this year, I set an 8% stop-loss, but when it dropped by 5%, I couldn’t bear to cut it, thinking 'the rebound is just around the corner', and stubbornly held on until it fell by 30%. When I finally cut my losses, my hands trembled as I pressed the screen. That night, I sat at my desk calculating: if I had strictly stopped my losses, I would have lost 5,000; but by holding on, I lost 30,000. A difference of six times.
Since then, I buckle a 'seatbelt' on every trade: short-term trades have a stop-loss of 5%-8%, and medium to long-term trades can accept a maximum of 15% drawdown; profit-taking is split into two batches, selling half when reaching the expected 60%, and keeping the rest based on the trend. More importantly, I learned to diversify—splitting the funds into five parts, never exceeding two parts for any coin I’m optimistic about.
Once, I traded a meme coin, and after buying, it dropped 7% the next day, just touching the stop-loss line. Gritting my teeth, I pressed 'sell', cursing to myself 'lost again', but the next day, that coin plummeted 40%. Watching the people in the group wailing, I experienced for the first time that 'stop-loss is not a loss, it's a lifesaver'.
The strategy at this stage is like putting a bridle on a galloping wild horse. I no longer pursue 'making enough in one go', but learn to 'lose less and earn more'. Although I still lose money due to misjudging trends, the numbers in my account no longer resemble a roller coaster—when it drops, it slows down, and when it rises, I can steadily pocket a portion of profit; that feeling of 'control' is much more reassuring than making quick money.
Stage Four: Understanding the direction of 'wind' and learning to wait for opportunities
The turbulent market at the beginning of this year pushed my strategy a step further. At that time, the market was like a headless fly, rising for two days and falling for three. Following my previous indicator strategies, I often found myself buying just before a drop and selling just before a rise. Once, I made five trades in a week, and four of them hit stop-losses; I stared at the review table and suddenly thought: trading is not 'a must do', but 'worth doing'.
I started learning to distinguish 'market conditions': in a bull market, trends are more reliable than indicators; holding still earns more than frequently changing positions; in a bear market, cash is safer than any coin; occasionally rebounding to earn a little and then running away, don’t be greedy; the choppy market is the most exhausting, waiting for clear signals—like breaking key resistance levels or falling below support levels, without signals, just lay low.
Last month, a new coin was launched, and the group started shouting 'hundredfold potential' again. I opened the K-line and saw the trading volume fluctuating wildly, with a messy trend. In the past, I would have jumped in, but that day I sat there sipping tea while staring at the screen and eventually closed the trading software. Three days later, that coin indeed dropped by 60%. This feeling of 'watching the temptation without acting' is more reassuring than making a profit—it indicates I can finally control my hand.
Now in my strategy, 'waiting' has become the most important step. Spending half an hour every day watching the market is not to find opportunities, but to confirm 'whether there are opportunities'. If the market doesn’t provide a clear direction, I put my money in stablecoins to earn interest; if signals that meet my strategy appear, I enter the market according to plan. Stop-losses are still in place, diversification is still in place, but there’s an added 'switch'—when there are no signals, the switch is off.
A few days ago, Ethereum broke through $2000; I bought a portion according to the trend strategy, and it has now risen by 15%. But unlike before, I'm not glued to the screen every day, because I know once a trend forms in a bull market, it won't end in a day. This sense of 'calmness' is something I wouldn't have dared to imagine when I was chasing highs and cutting losses.
Written at the end: The endpoint of strategy is reverence
Flipping through three years of trading records, from a screen full of 'buy - plummet - cut losses', to now occasionally appearing 'wait - signal - enter - take profit', the change in numbers reflects that I finally understand: the evolution of trading strategy is not about how many indicators you learn or how many skills you master, but slowly putting away the arrogance of 'I can beat the market' and growing a reverence of 'I want to follow the market'.
I still make mistakes now, like misjudging trends or missing opportunities, but I no longer deny myself because of a single loss. Because I know trading is not a 100-meter sprint, it’s a marathon—those who reach the finish line are never the fastest runners, but those who understand how to adjust their breathing and conserve their strength.
Perhaps my strategy will change in the future, with more new insights added, but one thing I am certain of: the rookie who ran naked following the 'wealth password' will never return. This evolution of strategy is also a practice in 'how to control oneself'. After all, in the crypto world, what defeats you is never the market, but the uncontrollable desire.