Recently, many newcomers have asked me what virtual currencies are. Today, I’ll systematically sort out the mainstream coins and trading approach.

Let’s start with coins. In the virtual currency market, Bitcoin, as the leader, has been widely regarded as digital gold ever since it was created in 2009, thanks to its decentralized nature and a fixed supply of 21 million. Ethereum is the representative smart-contract platform: it supports DApp development, and its ecosystem has the richest variety of applications. Compared with Bitcoin, Litecoin has faster transaction speeds and is suitable for everyday payments. Ripple focuses on cross-border payments, lowering transaction costs through decentralized protocols. Cardano adopts the Ouroboros consensus mechanism and follows an academic research route. Dogecoin and Shiba Inu–style meme coins may have originated as a joke, but through the power of the community they have gradually gained market share. Pepe coin exists more as a product of internet culture. Some exchange-native tokens also have a place within their ecosystems. These virtual currencies represent diversified development in blockchain applications.

After talking about coins, let’s discuss trading strategies. Put simply, the crypto world is a game between opportunity and risk. It’s true that retail investors without cutting-edge information and first-hand data are easily “cut”—that’s the reality. But if you want to enter this market, first recognize one thing: the crypto world isn’t a place to get rich overnight—it’s a field that requires long-term accumulation.

Many people enter with dreams of getting rich quickly, imagining turning a few thousand into a million. Although it’s theoretically possible to achieve this through a rolling position strategy, it’s absolutely not an easy path. Rolling positions are only suitable when big opportunities arise, and you don’t need to operate frequently. If you just manage to catch a few truly real opportunities in your lifetime, you can accumulate wealth.

The key is learning how to identify opportunities. Breakouts after long periods of sideways trading, major pullbacks during bull markets, key breakouts at the weekly level, and changes in sentiment driven by major news events—all of these can be considered as timing. Once you confirm the timing, use technical indicators (moving averages, MACD, RSI, etc.) to validate the trend from multiple angles, find key support and resistance levels, and use divergence signals to capture reversal opportunities.

Position management is core. Suppose you have 1,000,000 in capital: your initial position should not exceed 10%. Add to your position gradually only after the price breaks through key resistance, and each time you add, it must not exceed 50% of the original position. When reducing positions, you also need discipline: once you reach your profit target, lock in profits step by step—don’t overthink it.

For those entering with small capital, my advice is to focus on achieving several-times growth with each trade, rather than making small profits every day. Split your funds into three or four portions, and use only part of them each time, which can effectively control risk. Use leverage moderately: mainstream coins should not exceed 10x, and altcoins should not exceed 4x. When you make a profit, extract some principal as appropriate; when you lose, add an equivalent amount of funds from outside— the core is not to let yourself lose.

The power of compounding should not be underestimated. Small capital, through continuous doubling over a long time, can eventually build up to a considerable scale. But this requires patience to wait for the right opportunities, rational position management, and a respectful attitude toward risk.

Finally, what virtual currencies are is only basic knowledge. Real returns come from understanding the market and clearly recognizing your own risk tolerance. Everyone’s capital size, risk preference, and time/energy are different, and there is no absolute trading template. I’ve also experienced liquidation, but because my futures positions accounted for only a very small proportion of my total capital—and because the spot side had gains to support me—my losses have always remained within a controllable range. That’s exactly what risk management is for. I hope everyone can lay a strong foundation and accumulate steadily, and find your own rhythm in the market.