The most common mistake among crypto beginners is treating principal as a one-time disposable item. They have only a few thousand dollars in their account but are hoping for a wave of doubling, ultimately ending up being completely wiped out.
The crypto market has never been a place for quick riches but an arena to test patience and discipline. People with little money who always think about quickly reversing losses are basically courting disaster. The right approach should be like an old hunter in the forest—first survive, then consider eating meat.
One person's experience is particularly convincing. In October this year, when he started trading, his account only had 1200 USDT. When placing orders, his hands trembled, and his mind was filled with thoughts like "how to quickly multiply by 10." I told him one thing at the time: The first lesson for small funds is not making money, but avoiding liquidation.
And what was the result? After 90 days, his account grew to 80,000 USDT. The entire process involved zero liquidation and zero margin top-ups.
This is not luck; it is the inevitable result of managing risk to the extreme.
**First Iron Rule: Always Leave an Exit Route for Yourself**
How to allocate 1200 USDT? Divide it into three parts:
600 USDT for short-term trading. Focus only on BTC and ETH, the most liquid assets, with a simple goal—exit immediately after earning 3%.
400 USDT for swing trading. Only act when clear breakout signals appear on the daily chart, with each position held no longer than 5 days.
200 USDT frozen as a life-saving reserve. During extreme market conditions, this money must not be touched, just to keep a backup.
Many people like to go all-in. A single needle prick, and the account can go to zero instantly. Only those who learn to leave some funds for themselves have a second chance at survival.
**Second Iron Rule: Follow the Trend, Don’t Waste Time with the Market**
Crypto markets spend about 70% of the time sideways. Frequent trading during this period is like working for the exchange.
True experts do this: wait without clear signals; only trade when there are more than two confirmation signals; when profits reach 12%, take half of the profit first, and let the rest run.
Look at those consistently profitable traders—they actually trade very infrequently. They’re not watching the charts all the time but waiting for the real opportunities to act.
**Third Iron Rule: Lock in Rules, Cage Emotions**
When a single loss hits the preset stop-loss point, close the position immediately. No bargaining.
When in profit, first reduce some of the position, and set a protective stop for the rest.
Most importantly: never add to a losing position. Breaking this rule leads to illusions like "just wait a bit longer, I’ll get back to break-even," but the more you wait, the deeper you go.
Markets can be misread, but once discipline collapses, losses become inevitable.
**From 1200 to 80,000: The Essence Behind the Numbers**
The key to this story isn’t how much was earned but how many mistakes were made. It’s precisely because he strictly followed these three rules that he avoided the fatal errors most people make.
Small funds themselves are not scary. What’s scary is always thinking about going all-in to turn your life around.
Want to trade crypto? Write down these three sentences on a sticky note and stick it next to your screen: Leave an exit route, wait for the trend, stick to discipline.
That’s where the difference lies. Some people stumble around in the market, unable to see the direction clearly. Those who understand risk management have already turned on the light.