I have been in the cryptocurrency world for ten years. Six years ago, I quit my job to trade cryptocurrencies. From having nothing to being wealthy, what truly changed me was a night five years ago.
A senior once told me words that shocked me, allowing me to clarify my position and understand the eight major periods that every cryptocurrency investor must go through. I constantly compare and use this as a mirror, finally regaining everything I had lost!
In the journey of trading cryptocurrencies, when you face a difficult choice to sell, you might as well ask yourself: If your analysis is accurate, why is the market going in the opposite direction? The answer is only one — your judgment has deviated, because the market is always right; it never makes mistakes!
I have summarized countless trading skills and strategies, but ultimately found that the only method that can sustain profitability is simple and direct — to bravely buy in a bear market and decisively sell in a bull market. This strategy seems crude, yet it never fails, allowing me to earn consistently.
The six tactics to guard in the cryptocurrency circle:
If you also want to make this profession or side job, first engrave these 24 iron rules in your mind — this is my bottom line for not being eliminated by the market for ten years:
Divide the principal into 10 parts, use at most 1 part for a single trade, and never go all in;
When opening a position, you must set a stop-loss of 3-5 points to lock in the risk;
Don't open positions frequently, and don't add plans randomly; stick to the rules;
Once you earn enough 3 points, adjust the stop-loss to allow profits to 'snowball';
If you can't understand the trend, just stay in cash; don’t force it;
When the market is vague, it’s better to miss out than to force it;
Only choose mainstream varieties or popular tracks; do not touch air coins;
Large funds should be spread across 2-3 varieties, while small funds should focus on one and do it well;
Try to trade at market prices; don’t get hung up on those little slippages;
If profits haven’t triggered a stop-loss, hold on with peace of mind; don’t panic and sell as soon as you earn a little;
After making a profit, take a portion to cash out and keep it as a backup; don’t leave everything in there;
Don’t buy coins randomly for that little pledge dividend; it’s easy to step on a landmine;
If you lose, accept it; don’t average down to adjust the price; the more you average down, the more trapped you will be;
Only trade at key support or resistance levels; the win rate is higher;
Don’t be greedy for small profits while taking big risks; picking sesame seeds and losing watermelons is not worth it;
Once the stop-loss is set, don’t change it; don’t harbor any lucky thoughts;
Set aside time every day for review; don’t stare at the market all day in a panic;
Go long when it rises and short when it falls; follow the trend;
Buy and sell according to the trend direction; don’t worry about the absolute high or low prices;
Increase your position when breaking through key points; if it breaks, clear your position quickly;
Be cautious when shorting small-cap varieties; large-cap varieties are more suitable for going long;
Don’t hedge to cover losses; accept the loss and leave the market; don’t get deeper and deeper;
Switching between long and short positions should look for signals, such as MACD divergence being very accurate;
Don’t expand when winning; each trade must still be executed according to the plan.
Whether long-term or short-term, trading boils down to two points,
Risk-reward ratio, accuracy,
Accuracy cannot actually be improved, or rather it is difficult to improve; overall, it is a 50-50 chance.
The only thing you can improve is the risk-reward ratio.
When losing, lose a little; when earning, earn a lot. This way, the overall result will be profit.
So where does the difficulty in short-term trading lie?
Everyone knows that trading is easy to say but hard to do.
Knowing to cut losses is one thing, but doing it is really difficult because of loss aversion psychology. When it comes time to cut losses, you may not be able to bring yourself to do it.
Short-term trading means frequently opening positions. You can do stop-loss for one, two, three, four, five, six... up to 100 times, but if you fail to do it just once, you may lose all the profits earned before.
You must overcome human nature at all times; this is the difficulty of short-term trading.
The most important thing in trading is to know what kind of market can make big money, what kind of market can only make small money, and what kind of market will only incur small losses. These elements may seem simple, but many people have not figured them out. Otherwise, they wouldn't be recklessly trading every day. Once you clearly understand your profit and loss boundaries through practice and experience a few rounds, you will realize that trading is just that simple. There is actually very little you can do; more often, it’s about patiently waiting.
The ability to control emotional desires (frequent opening of positions, patience in waiting) often means that you have taken control of the initiative for success.
In every field, if you don't invest considerable effort to explore and understand the underlying principles, and challenge and overcome your human weaknesses, it is impossible to achieve any results. Even those who are exceptionally lucky and make money will eventually lose it if they continue in the market; this is the reality.
Recently, many fans have privately messaged me asking which is more important in cryptocurrency trading: technical analysis or position size? Can a novice earn 20,000 from an investment of 10,000?
The market always rewards two types of people: the gamblers who dare to bet heavily, and the hunters who are good at waiting. Those who constantly draw lines on candlestick charts will never tell you that what truly changes destiny is not the MACD golden cross, but the courage to pile up chips into a mountain when the entire market is in panic.
1. All technical indicators are post-event explanations of the market.
Open any variety's weekly chart, and in the past five years, there have been no more than ten monthly lines worth participating in. The root cause of most people's losses is treating the market as a 24-hour operating casino while forgetting that the essence of speculation is waiting for those rare opportunities that only occur 2-3 times a year. Like a cheetah on the African savanna, it spends 87% of its time dozing in the shade.
2. The deadliest trap of a poverty mindset is 'safeguarding the gains.'
Retail investors always like to close profitable positions in front of resistance levels but let losing positions break through all support. Lin Guangmao, the cotton king, in that legendary battle in 2010, the key was not that he initially made the right call, but that he dared to add 200,000 contracts when floating profits reached 30 million, which was contrary to human nature. The market always rewards extreme holders with extreme market conditions.
3. Gains and losses are from the same source.
Fu Haitang's journey from 50,000 to 120 million in profits was preceded by seven years of liquidation and trial and error. A catcher of extreme market conditions must accept that 90% of trial trades will be washed out. Just like on the day oil futures hit negative $40, the 'smart people' who cut losses early will never see the subsequent 300% rebound. Major market movements often occur after everyone has cut losses.
The purpose of trading psychology is to execute your trades as mechanically as possible and to eliminate emotions as much as possible. You should not care whether the price is rising or falling. You should enter only at key positions and find low-risk, high-reward entry points.
Focus on your risk management and strategy backtesting. If you can eliminate FOMO emotions, you will find that profits will come naturally.
What is the enlightenment of trading? The most powerful technique? Can cryptocurrency trading still make money?
In trading, we often talk about enlightenment. What is enlightenment?
When starting trading, you always feel that enlightenment is finding a secret that others do not know, such as a mysterious indicator, a winning strategy, or a wealth code secretly passed on by a big shot. Later, you realize that enlightenment is not about discovering some earth-shattering secret.
It is only after stepping into all the pitfalls that one finally understands that losing money is not due to poor skills, but because emotions got the better of them. Making money is not because of excellent analysis, but because of maintaining discipline.
Enlightenment is finally learning to control your heart and hands.
Clearly bearish, yet forced to go long due to FOMO; clearly should cut losses, yet fantasizing that holding on for a bit longer might bring it back; clearly in the right rhythm, yet greedily adding positions and losing everything... These are not technical issues; they are human nature issues.
In the end, trading is not about charts, but about mindset. You are not defeating the market; you are defeating yourself.
So true enlightenment is finally figuring out a rhythm that suits yourself, knowing when to go all in, when to be in cash, knowing how much loss you can endure without panicking, how much profit you can let go of, understanding which opportunities belong to you and which are just noise, but this is not the end. Enlightenment is just the entrance ticket. It is the true beginning of trading.
There is still a long way to go for practice — persistence, iteration, calmness, waiting.
So don’t always think about suddenly becoming rich; first learn not to lose and step into pitfalls. It’s more important than making more money.
So how long does it take to earn the first pot of gold from trading cryptocurrencies?
Everyone is different in this regard. Some people withdraw from the market if it doesn't suit them. Some people, due to their passion, have persevered for years and have succeeded.
The first principle of investing is risk control.
If you pass this hurdle, no matter how lucky you are, you will eventually give it back.
Opportunities will change, the market will change,
The only thing that can keep you from failing in the long term is underlying logic and risk awareness.
"The market has always been fair; it does not punish mistakes but will keep repeating lessons until you learn."
[There is no 'Holy Grail' in trading, and there are no 'secrets' in the market.]
You think the method of making money is hidden in some book, but in fact, everything is laid out in plain sight: the market's trends, support and resistance, capital management, personal execution ability; trading is just these simple things done repeatedly to perfection.
[Predicting the future is not as good as managing the present.]
Those who guess the market's rise and fall every day will ultimately either be liquidated or slapped in the face. Trading is not about prediction, but execution. You don’t know whether the next trade will be a profit or a loss, but you know that after long-term execution of rules, the probability will be on your side.
[Let profits run, let losses stop.]
Everyone wants to make stable profits when they first enter the market, but the fact is, you must accept losses to truly make money. Losses are not scary; it’s scary to bear losses; profits are not gained through frequent trading, but through one correct trade that captures enough profit.
The closer you get to the market, the easier it is to be consumed by it.
Staring at the market every day, trading frequently, and constantly trying to catch every fluctuation will only make you more anxious and uncontrollable. Those who truly make money understand how to maintain distance from the market and learn to wait to earn their share of the market.
The essence of trading is constant self-improvement. The market will not give you more money just because you are doing well, nor will it take care of you just because you are working hard. The market will not change, you can only change yourself.
A complete trading system includes opening and closing rules + capital management. The core of trading lies in capital management, not in opening and closing positions. Don’t spend too much time learning techniques; the truly core aspects of trading lie outside of candlestick charts, such as your mindset, emotions, execution ability, etc.
The trading field requires someone to guide you in. If no one points it out, many people will never find their way out in their lifetime. Many people have stayed in the trading market for many years, going around in circles, always learning techniques. They finish learning the theory but still lose. They continue learning wave theory, and still lose after learning it. They look for various indicators to learn, and in the end, their hair turns white, but they still cannot make it work, and in the end, they still lose.
For example, a simple opening and closing rule: open long on a strong bullish candle with volume, open short on a strong bearish candle with volume. If wrong, cut losses; if right, move the stop profit. Just following this one rule that you can understand is enough to make you money. We only need to find a few techniques to learn and then refine some high-win-rate opening and closing rules based on our own experience for our own use. Don’t bother learning so many messy things.
Many people talk about various indicators; can indicators really predict future trends? What indicators should we learn? Indicators do not predict future trends; they are derived from a series of calculations based on price. First, there is the price, then there are the indicators.
Why can we predict future trends? Indicators are just a quantification and visualization of price movements and cannot predict future trends. The correct way to use indicators is to find patterns.
A good trade is always about the execution process.
And not evaluated by gains and losses.
Remember your trading discipline: you cannot lose a penny more than what is supposed to be lost; do not have any lucky hopes. What you are meant to earn will not slip away.
Overtrading will not make you rich. You must trade well to become wealthy. Overtrading will drain your profits before your capital truly accumulates and will destroy your ability to accumulate real wealth.
Every successful trader's journey is actually quite similar: years of struggle and losses, gradual improvement, and then suddenly experiencing explosive growth. Just like an undervalued cryptocurrency, once it starts, it cannot be stopped. But if you overtrade, you will keep resetting this process and will never see that explosive growth phase. In the end, you can only stand still, unable to make money.
I have experienced this feeling; it is truly overwhelming. So what should be done?
First, don’t focus on gains and losses. Counting how much you've earned from each trade will only destroy your discipline. You only need to pay attention to two data points: the risk of each trade and the maximum loss of each trade. Once you master these 2 points, profits and losses will naturally yield good results.
Second, do not set profit targets. Never set daily or monthly profit goals. As I mentioned before, excessive expectations for trading results will only lead you to make foolish decisions. Trading is not a job; you will not get paid on time. Your profits depend on whether your strategy aligns with the market and how strong your execution is. Sometimes, the money you earn in a day may be more than the total of the next two weeks; this is very normal.
Then, you need to establish a system that can prevent overtrading. Because human nature cannot be controlled 100%, but a good system can help you prevent psychological breakdowns and avoid account liquidation. Therefore, your system needs to include a clear trading framework, tools to confirm market direction, and clear entry trigger conditions. Such a system will naturally limit your trading frequency, allowing you to only act on the highest quality opportunities.
Finally, you only need to focus on executing high-quality trades within your system.