Last week during a live broadcast, a fan sent three consecutive messages: 'Teacher, I see others buying and their investments go up, is it that my luck is too bad?' Looking at the screen filled with requests for good luck, I suddenly realized that too many people attribute profits in the cryptocurrency market to metaphysics, but forget a painful truth: luck will always favor those who are prepared, and 'preparation' is the key to widening the gap in returns.
In the past two years, I have seen too many cases of 'entering the market by luck and losing everything by skill': Some people bought a certain popular cryptocurrency based on insider information, feeling pleased with a short-term gain of 30%, but without setting a profit-taking point, when the market corrected, they not only lost their profits but also incurred a loss of 20%; others saw someone double their investment and followed suit, ignoring their own risk tolerance, and were directly eliminated by the market after a single fluctuation. These people always say, 'luck is not on my side,' but they never consider: even if luck does come next time, what will you use to catch it?
First level of preparation: trading strategy is not 'fortune-telling', but 'the net of the catcher'.
Many newcomers mistakenly believe that 'strategy' is used to predict the market and are always looking for '100% accurate indicators', which actually leads them into a dead end. The essence of the fluctuations in the crypto market is a game of capital, and no tool can accurately predict every rise and fall, but a good strategy can help you grasp the core logic amidst the chaos.
I have used the 'trend following + key level breakout' strategy for five years, and the core is three points: look at the long-term trend to determine direction, find short-term support and resistance to set entry points, and set fixed ratios for take profit and stop loss. For example, last year a certain mainstream cryptocurrency was sideways for three months at the bottom. I judged the trend to strengthen through the weekly moving average and entered with a small position when it broke through the previous high of the consolidation, while setting the stop loss at the lower edge of the consolidation range. Later, the market indeed started, and I took half of the profit when it reached 60% of my expected target, while the remaining position was tracked with a trailing stop, ultimately achieving a 120% return.
Remember, the role of a strategy is not to 'bet right once', but to keep you disciplined during countless trades—be decisive when it's time to enter, and not greedy when it's time to exit. When the market suddenly explodes (what everyone calls 'luck'), your 'net' can steadily catch the profits instead of watching opportunities slip through your fingers.
Second level of preparation: capital management is not 'spending frugally', but 'keeping the capital for the harvest.'
There is a harsh reality in the crypto space: 90% of people have already lost their principal while waiting for a 'big opportunity'. Why? Because they do not understand capital management; either they frequently trade and end up paying huge fees or they lose all chances of recovery with one heavy mistake.
The iron rule of capital management I give to my students is the '33 system': 30% of the principal is kept as a 'safety cushion', never to be touched; 30% is used for medium to long-term layouts with clear trends; the remaining 30% is divided into 5-8 parts for short-term trial and error and swing trading. Last year, when a student first came, he couldn't help but go all in. I had him strictly adjust his positions according to the '33 system', and as a result, during a sudden pullback, his 'safety cushion' and medium to long-term positions were unaffected, and instead, he seized the rebound opportunity with his trial and error positions.
Capital management is like a farmer planting crops; you need to leave enough seeds and grains while dividing the land to plant different crops—some for stability, some for profit. Only in this way, even if you encounter a short-term drought (market downturn), you will have the confidence to wait for the rainy season (major market) to arrive, instead of abandoning the land early.
Lastly, I want to say to everyone: the crypto market is never short of luck, what is lacking is the ability to 'catch luck'. When you have honed your strategy into muscle memory and ingrained capital management into your bones, you will find that 'good luck' is actually an inevitable result because you are already well-prepared, just waiting for the wind to come.
