Having been in this circle for seven years, I’ve seen too many people make quick money, and even more who wipe out overnight. I’ve also stepped into pits myself—once losing half a year’s salary in a single day. But it’s precisely because I’ve experienced those tragedies that I later found a set of ridiculously simple methods that, surprisingly, allowed me to achieve relatively stable returns.

Today, I want to share some honest thoughts with everyone. No metaphysics, just stuff that ordinary people can understand—why do most people lose money in the crypto world? Simply put, it’s because they dig their own graves.

**Once upon a time, I was the living example of the opposite**

The foolish things I did when I first entered the industry are now almost unbelievable when I think back.

Seeing a certain coin jump 50% in one day, my heart started pounding faster, afraid of missing the bus to instant riches, so I rushed in—only to buy at the peak, and the next day it plummeted, trapping me hard. This is called chasing highs and selling lows, officially known as "high-position bagholder."

Following big influencers on Twitter who call signals, I just followed suit. Later, I realized they were paid to promote projects, while I was genuinely taking the other side—handing over real money to be the bagholder. The feeling of being cut for韭菜 (leek) was enough once.

The most outrageous was playing leveraged contracts, always wanting to "turn it around in one shot" to recover. Using 10x leverage, even a slight market fluctuation would cause liquidation, and my principal was gone in an instant. That feeling was like riding a roller coaster, but when it came down, there was no more coaster.

The worst was in the 2022 bear market, when I couldn’t resist bottom-fishing altcoins, which then dropped 90%. During that period, I almost fell into depression. Later, I realized a simple truth: the market is best at teaching those with a lucky mindset—those who fantasize about "turning it around in one shot"—that they are often candidates for bankruptcy.

**Blood and tears have taught me a few ironclad rules**

Surviving is a thousand times more important than making quick money.

*First: Stop-loss is always more important than take-profit*

I set a strict rule for myself: if a single loss exceeds 2% of my principal, I cut it immediately. For example, if I have 100,000 in my account, I must exit if I lose 2,000.

Why so harsh? Because I’ve seen too many people hold onto losing positions. They think "it’ll bounce back soon," but small losses turn into big ones, and they get wiped out. Market makers excel at shaking out traders with repeated oscillations; once your mindset collapses, they win. The essence of stop-loss is protecting your principal—without it, everything else is empty talk.

*Second: Position management is a life-saving charm*

My allocation looks like this:

Over 50% in BTC and ETH. These are the market’s barometers—resilient in bear markets, profitable in bull markets, the anchor of the entire portfolio.

Altcoins should not exceed 10% of total funds. The remaining roughly 40% is placed in medium-risk coins or stablecoins.

Why this distribution? Because I’ve tried another approach—full allocation to altcoins chasing yields. The result? When the market is good, you earn a bit more than others; when it’s bad, you disappear altogether. That’s not investing, that’s gambling.

*Third: Never touch what you don’t understand*

Every day, new projects and concepts pop up—AI coins, metaverse, Layer2… all sounding very high-end. But if you don’t understand what they do, don’t touch them.

My standard is simple: what problem does this project solve? Who is the team? Is the code open-source? Does it have real applications? If I can’t answer these, I pass. Because if you don’t understand something, there’s no risk management.

*Fourth: Don’t follow the herd, don’t listen to stories*

Today’s crypto discourse is very easy to form consensus. A coin becomes popular, everyone discusses it, and then a bunch of people rush in. But you must know, the biggest explosion happens when everyone is most excited.

Stories about certain coins “multiplying 100 times” sound great. But in reality, 90% of these stories are just setups for retail investors to take the fall. My current approach is—stay calm when the market is hottest, and focus on fundamentals when it’s cold.

**How I operate now**

I spend two hours each week analyzing market data—not price swings, but on-chain activity, trading volume, whale movements. When I find truly valuable projects, I build positions gradually, never going all-in at once.

When making money, I don’t chase huge profits; a stable 5-10% per month is enough. When losing money, I strictly execute stop-loss, no matter how tempting.

This method may sound unoriginal, even a bit “stupid.” But it’s this “dumb” approach that has kept me alive in this high-risk market and allowed me to maintain stable profits.

Finally, I want to say—there are many who make money in crypto, but few who last long. If you’re still chasing rallies, following signals, playing leverage with dreams of turning it around, I advise you to stop first. Because the market is constantly teaching new lessons, and the tuition is paid with your principal.