Between the spatula and the candlestick chart, what lies not only is technology, but also a psychological game.
In the summer of 2016, in front of a small seafood stall at a night market in Fuzhou, Old Chen worked with the smoke of cooking oil every day, busy until dawn. An article he偶然读到 about Bitcoin ignited his desire to change his life. He took out the 30,000 yuan he had saved for three years and resolutely entered the cryptocurrency world.
Friends and family laughed at him for 'messing around', but Old Chen, like recording the stall's revenue, diligently studied candlestick charts and summarized patterns. Eight years later, this former night market vendor not only grew his initial capital of 30,000 yuan to 5 million yuan but also provided a solid living guarantee for his family.
As a cryptocurrency analyst with years of experience, I know that Lao Chen's success is not accidental, but stems from a rigorous set of survival rules. Today, I will share these hard-earned experiences, hoping to help you navigate the volatile market steadily.
Mindset determines success or failure: The crypto space is not a casino.
The most fatal misconception in the crypto space is equating trading with gambling. Lao Chen once told me: 'The real opponent in the crypto space is not the market makers, it is yourself! Price fluctuations are just surface; the key to winning is controlling greed and fear.'
Data shows that as many as 79% of beginners lose money in their first year of trading. The main reason is emotional trading. When prices skyrocket, FOMO (fear of missing out) causes blind chasing; when the market falls, fear leads to panic selling.
Successful traders know how to identify and manage these emotions. They use tools like the 'Fear and Greed Index' to assess market sentiment and avoid being swept up by collective psychology. Before each trade, ask yourself a simple question: Am I investing or gambling?
Capital management: Surviving is more important than making big money.
In the crypto world, 'surviving' is a prerequisite for long-term profitability. Lao Chen has a rule: no single investment should exceed 5% of total funds. This means that even if a particular trade is judged incorrectly, it won't deliver a fatal blow to the overall capital.
Reasonable capital management should include three parts:
Short-term trial funds: Used to gauge market direction, controlled at no more than 20%.
Trend holding funds: Used for the main battlefield, accounting for about 40%.
Emergency funds: Funds that should never be touched should account for at least 30%.
Remember, never borrow money to invest or use leverage. Data shows that users with 10x leverage have an average survival period of only 17 days, and 83% of liquidation orders occur when leverage is ≥5x. This is not alarmism, but a summary of countless lessons.
The pitfalls and principles of technical analysis.
Many beginners are obsessed with complicated technical indicators, but Lao Chen's method is surprisingly simple: 'Look at volume, look at sentiment, look at the overall trend.'
Don't panic during rapid rises and slow declines: A rapid rise in coin price followed by a slow decline may indicate that large funds are accumulating at low levels; don't sell easily due to small fluctuations.
Don't catch falling knives after sharp declines: A weak rebound after a sudden drop is likely large holders offloading; do not blindly pick up the pieces.
High position volume analysis: When prices are high, if volume continues to decrease, the market may be about to end.
Trading volume doesn't lie. When the price repeatedly expands in the bottom area, it is a true signal for an upward trend; while a one-time spike in volume may likely be a trap.
Market sentiment: The truth hidden in the data.
Lao Chen believes: 'Don't just focus on K-lines, the market will rise when everyone is optimistic (strong consensus), and trading volume can reveal true sentiment.'
Smart traders use on-chain data tools (like Glassnode, Santiment) to analyze the movements of large holders. When the Fear and Greed Index is below 20, the market may be oversold, presenting a buying opportunity; when the index exceeds 80, it indicates that the market is overheating, and profit-taking should be considered.
At the same time, remain vigilant about the fervent discussions on social media. Studies show that 68% of tokens hyped on Twitter halve in price within a month. The market is born in despair, grows in hesitation, and dies in fervor.
Lao Chen's life-saving iron rule: Summarizing practical essence.
Based on Lao Chen's experience and my observations, here are six life-saving iron rules that beginners must master:
Invest with spare money: Total investment should not exceed 10% of liquid assets, ensuring that even if losses occur, normal life is not affected.
Set stop-loss before profits: Set a clear stop-loss point before opening a position, and decisively close the position if it falls below the cost price by 3%-5%.
Avoid frequent trading: No more than 3 trades per day, excessive trading can lead to decreased decision-making quality and accumulated fees.
Nighttime position reduction: Halve positions at night to avoid sudden market movements during periods of low liquidity and high volatility.
Reduce positions ahead of major holidays: Historical data shows that the probability of market decline exceeds 70% in the week before holidays.
Learn to go to cash: Don't be greedy or fearful; waiting in cash when the market is unfavorable is wiser than making blind trades.
The path of endurance: Trading is a practice, not gambling.
Behind Lao Chen's success is eight years of perseverance and learning. He spends hours every day studying market dynamics but never stays up late staring at the screen; he dares to take large positions when opportunities arise but strictly adheres to stop-loss discipline.
Trading in the crypto world is not only a battle of skills and strategies but also a psychological game. A stable trading mindset determines the ability to achieve long-term profitability and is key to resisting emotional shocks and maintaining rational decision-making.
Cultivating an anti-fragile mindset requires learning from each trade. Do not make new trades within 24 hours after a loss, regularly maintain a trading log, and acknowledge your cognitive limitations.
Conclusion: Surviving is victory.
Research from Cambridge University shows that beginners who strictly adhere to risk control rules can increase their three-year survival rate from 19% to 68%. In this market, controlling risk is more important than chasing exorbitant profits.
Lao Chen's transformation from a night market vendor to a winner in the crypto world illustrates the most essential truth in the crypto space: successful investing comes from controlling risk, not chasing profits.
Have you also been confused on your trading journey? Feel free to share your experiences and confusions. Click to follow, and let's support each other on our journey in the crypto space, moving forward steadily#巨鲸动向 $ETH
