In the winter of 2014, I invested my entire year-end bonus into the exchange without thinking that this path would make me cry for four years and laugh for six years. At the worst times, I ate instant noodles continuously in a rental house, and my account only had 3700 yuan left in a month, staring blankly at the K-line chart until dawn.
Now that I have taken over 100 beginners, I found that 90% of the losses can actually be avoided with a few iron rules. Today, I have broken down the 'survival guide' accumulated over 10 years: 6 iron rules + the essence of MACD, each one is filled with blood and tears, and those who understand it can at least lose 5 years less.
1. From losing to crying to making a steady profit for 6 years: Basic skills are 100 times more important than talent.
The detours of the first three years are enough for beginners to circle the Earth once: chasing the 'insider news' of altcoins, resulting in the project party running away; blindly believing in quantitative models, spending 20,000 on strategies and losing worse than manual trading; fully invested and going all in for doubles, only to be liquidated by a single pullback.
After a liquidation incident, I covered my walls with delivery slips and circled all mistakes with a red pen: 80% were basic errors—no stop loss, chasing surges, holding on stubbornly. Just like learning to drive starts with practicing braking, trading starts with practicing safety. These six iron rules have helped me avoid a 'fatal pit' each time.
2. Six life-saving iron rules
1. Continuous large drop stop-loss method: A drop of 7 days is not the end, but an opportunity.
Mainstream coins dropped for 7 consecutive days, each day dropping 3%-5%, and retail investors lamenting 'it will go to zero'. I bought in batches: on the 7th day, I bought 20%, on the 8th day, I bought another 30%, and on the 10th day, I bought 50% when it stabilized. It rebounded 30%, and the position earned 40%. The key: only buy mainstream coins; altcoins dropping for 7 days might really go to zero.
2. Two-day surge alert: If it increases by 30% consecutively, reduce half of the position.
MEME coin surged 40% in two days; I first reduced my position by 50%. On the third day, it indeed pulled back 25%, and those fully invested lost all their profits. After consecutive surges, the main force can offload at any time, so it's best to secure profits first.
3. Golden exit timing: Sell after 2 PM.
Observing 10 years of data: More funds in the morning, mostly a trap to lure in, while funds flowing out after 2 PM is the real offloading. Once BTC rose to the target price in the morning, I didn’t sell and waited until the afternoon to sell, earning an additional 8%.
4. The night before a consolidation breakout: If it oscillates for more than 3 days without breaking through, leave decisively.
A certain coin consolidated for 5 days, with daily fluctuations not exceeding 3%, but the volume kept decreasing, so I cleared my position decisively. Three days later, it dropped 20%. If it consolidates for over 3 days without breaking through, it indicates that the main force is either losing strength or offloading.
5. Volume anomaly: High-volume but no price increase at high levels, run quickly.
BTC's high trading volume is 3 times the normal, with only a 2% price increase, clearing the position on the same day. High volume without price increase indicates more selling pressure, and a pullback is inevitable.
6. Moving average coin selection method: Use the 30-day line to select coins, and the 3-day line to find opportunities.
The stock price is above the 30-day moving average, and the trend is upward, only then consider buying. If it pulls back near the 3-day line and does not break below, buy; if it breaks below with increased volume, sell. Last year, I used this method to select ETH and made a 60% profit in six months, which is 10 times more stable than blind trading.
Additional strategy: Small positions for stable profits.
Only eat 'the middle section of the fish', don’t chase the head and tail. A certain coin rose from $10 to $20, I bought at $12 and sold at $18, making a 50% profit. Earning 15%-25% in 5 days, operating 10 times a year can multiply the principal by 3-5 times.
3. The essence of MACD: Three lines and one axis to see through the main force's thoughts.
MACD is not complicated for beginners; just look at the 'three lines and one axis': fast line DIFF, slow line DEA, the bar line, and the zero axis.
1. Golden cross buy: Fast line surpasses slow line, buy when the red bar emerges.
DIFF crosses above DEA (above the zero axis is better), and when the bar turns red, it's a buy signal. Last year when this signal appeared for SOL, I bought a 30% position, and it rose 40%.
2. Death cross sell: Slow line surpasses fast line, sell immediately when the green bar appears.
DIFF crosses below DEA, the bar line turns from red to green, regardless of profit or loss, sell half first. When ETH had a death cross, I sold, and it dropped 20% in 3 days, avoiding a disaster.
3. Divergence warning: Price makes new highs/lows, but MACD does not follow.
Top divergence: Price makes a new high, but the red bar is shorter than the previous wave, and the fast and slow lines do not make new highs, indicating the main force is offloading, sell quickly.
Bottom divergence: Price makes a new low, but the green bar is shorter than the previous wave, and the fast and slow lines do not make new lows, indicating weakness in the bears, and it is possible to buy low. By relying on divergence, I avoided three major crashes and caught two bottoms, earning over 2 million.
4. Summary of mindset: Mechanical execution is more important than cleverness.
The most successful fan, Xiao Wang, went from 50,000 to 870,000. He said: 'I’m stupid, I just buy and sell.'
Those who make money are executors, not dreamers.
Knowing to stop loss, yet always thinking 'it will rebound';
Knowing to reduce positions, yet greedy for 'a bit more increase';
Knowing the signals are accurate, yet believing in rumors.
Now I send signal reminders daily in my friend circle: which coin has a golden cross, which has a death cross, and those who follow will at least avoid losing large sums of money.
After 10 years of trading, from crying to being able to support my family with it, my biggest realization is: the crypto world is not short of opportunities, but lacks the ability to avoid mistakes. Understand the rules, stick to discipline, and profits will not be far away.
