Core Principles of Trading
1. Trend is King, Trade with the Trend
Correct Approach:
Bullish Trend: Only go long, buy on pullbacks
Bearish Trend: Only go short, sell on rebounds
Sideways: Wait and see or buy low and sell high
Common Mistakes:
Counter-trend bottom fishing (e.g., BTC dropped from 69,000 to 15,000 in 2022)
Counter-trend shorting in a bull market (e.g., BTC rose from 15,000 to 45,000 in 2023)
2. Position Management: Never go All-in
Scientific Position Allocation:
Single trade ≤ 5% of total capital (avoid losing everything in one trade)
Total position ≤ 30% (keep 70% cash for extreme market conditions)
Build positions in batches (e.g., buy in 3 tranches, each time 1/3)
Example: • BTC rose from 20,000 to 30,000 in 2023; batch buying yielded steadier returns than a one-time All-in!
3. Strict Stop Loss: Protect Your Life First
Stop Loss Strategies:
Fixed percentage stop loss (e.g., -7% forced liquidation)
Technical stop loss (stop loss below support lines/moving averages)
Time stop loss (exit if holding for X days without profit)
Consequences of Holding On:
LUNA dropped from 100 to 0.0001
Those who didn't stop loss before FTX's collapse lost everything
4. Take Profit Strategies: Let Profits Run
Take Profit Methods:
Take profit in batches (e.g., sell 1/3 at a 20% gain, then another 1/3 at 50% gain)
Trailing stop (liquidate if it retraces 8% from the peak)
Fibonacci target levels (1.618 times, 2.618 times)
• Those who didn’t take profit when BTC hit 69,000 in 2021 saw it drop to 15,000 in 2022
5. Cyclical Patterns: Alternating Bull and Bear Markets
4-year cycle in the crypto space:
1. One year before halving (e.g., 2023): Bottom formation
2. Half a year after halving (2024): Slow rise
3. One year after halving (2025): Crazy bull market
4. Two years after halving (2026): Bear market crash
Strategy for 2025:
• Hold in the first half, gradually sell in the second half
6. Information Filtering: Block Noise, Focus on Effective Information
On-chain data (Glassnode, Nansen)
Technical analysis (TradingView)
Project fundamentals (white papers, teams)