Rules are more important than luck
My cousin asked me for coffee last month, holding her phone and sighing: 'Sister, I only have 1600 U left in my account, what can I do with this little money in the crypto world? I bought a few coins randomly before, and lost 800 U in less than a month...'
I looked at her dejected face and remembered the tuition I paid when I first entered the market. At that time, my principal was 18,000 U, and I lost a shocking amount in just a few months. So I told her: 'Small funds are most afraid of rushing to recover losses. The less money you have, the more you need to stick to the rules.'
Five months later, she sent a screenshot of her account: Stable at 28,000 U, without a single liquidation along the way. She smiled and said, 'Sister, those three rules of yours really saved me.'
01 Split funds into 'three active, one passive', survive first, then talk about profit.
I had my cousin divide her 1600U into four parts; at first, she found it troublesome: 'Isn't it just a little money? Do I still need to divide it?'
But I insisted she strictly follow: 350U for short-term trades, take profit at the first sign, consider exiting if profits exceed 3%; 450U for swing trades, only enter when there's a daily chart breakout at key positions with volume; 400U for medium to long-term positions, only act if it reaches the predetermined entry point; finally, 400U as emergency funds, not easily touched even with market fluctuations.
The core of this method is to control the risk of each trade. In the past, she would often go all in, feeling anxious with every rise and fall. After diversifying her investments, even if she misjudged short-term trends, the other parts of her capital wouldn't be affected, and her mindset stabilized a lot.
A friend asked why I don't fully invest in high-yield cryptocurrencies? I replied, 'How many people have you seen who can survive long-term by gambling?'
There are many opportunities in the cryptocurrency world, but survival is the top priority. Control each trade's risk to 1%-2% of total capital, so even if you have five or six consecutive losses, it won't hurt too much.
02 Only grab 'clear trend markets', don't waste bullets in consolidation.
I told my cousin that the market is in a consolidation phase 70% of the time, and it's best to keep your hands off during those times. Real profit opportunities often appear when the trend is clear.
She had a bad habit before: whenever she looked at the market, she wanted to trade, always feeling that not operating would mean missing out on billions. As a result, she paid a lot in fees, but her account kept getting thinner.
I set a rule for her: only trade clear trends; at other times, it's better to stay in cash and wait.
Last month, Ethereum fluctuated around 2000 points for ten days, and she watched the market every day without making a single trade. Until one morning, it suddenly broke through the key resistance level of 2100 points with high volume, and she decisively entered the market, earning 15% of her total capital in a week.
After making a profit, she immediately withdrew 30% to save, saying, 'Money that falls into your pocket is real money.' This is a habit I learned from veteran traders—regularly withdrawing profits from the account to make investing a 'zero-cost' operation.
03 Stick to the rules, don't let emotions lead you.
My cousin's phone notes contain three reminders: never let a single loss exceed 1.2% of the principal; immediately stop loss when the point is reached; take half profit at 3%, set stop-loss at break-even for the remaining; never average down on losses, and don't have a lucky mindset.
Once, the coin she bought fell by 1% right after she entered, triggering her stop-loss. Although she was reluctant, she still closed the position according to the rules. The next day, the coin fell another 8%, and she was relieved, saying, 'Good thing I didn't hold on.'
This discipline is especially important for small capital. Large institutions can hold positions with their capital, but we small investors cannot afford to lose.
I also advised her to stay away from high-leverage contracts. Many beginners think leverage brings quick money, but in reality, it's a trap that quickly depletes the principal. Leverage amplifies emotional fluctuations, and small investors are most likely to make wrong decisions in such emotional swings.
She is now operating with her colleague Xiao Lin. Previously, Xiao Lin was losing each month with 1300U, but after four months with this method, the account surprisingly reached 6800U. It's not about how much was earned, but about learning not to lose unnecessary money.
There's no magic in the cryptocurrency world; going from 1600U to 28,000U isn't about betting right a few times, but about adhering to discipline in every operation.
Sometimes my cousin asks me, 'Sister, is this operation too conservative? I see others making dozens of times returns.'
I asked her back, 'How many of those who post their gains are still alive in the market now?'
Small capital growth is like rolling a snowball; it may start slowly, but as long as the snowball is solid, it will grow a little bigger with each roll. The important thing is to protect the principal and keep yourself in the game.
The real survival rule in the cryptocurrency world is actually very simple: stay alive, and when the next big opportunity comes, you're still at the table.
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