The paradox of making money in the crypto world is right here—more complex strategies tend to be more prone to failure, while the simplest methods often last the longest.

Today, I want to discuss the underlying trading logic that is fiercely guarded by experts but often overlooked by most people. It’s nothing new—just seemingly simple things that are often dismissed.

Three trading traps, each capable of wiping out your account

**Chasing highs and selling lows is a dead end.** The data is brutal—about 90% of retail traders’ losses are tied to this. When the price surges, FOMO emotions are at their peak. Then they get caught at the top, watching the price fall. The traders who survive? They actually build positions during times when the market is blood-red and no one dares to look at the charts. Not to mention, this psychological resilience isn’t something ordinary people can develop easily.

**Going all-in on a single coin is gambler’s logic.** Putting all your funds into one asset concentrates risk excessively. There are countless historical examples of this. The smart approach is to always reserve about 30% in cash—so when the market crashes, you have dry powder to buy the dip instead of following the herd to cut losses.

**Full position and going all-in make you lose flexibility.** The harshest part of the crypto world is that opportunities are abundant, but those with full positions have already tied their hands. Position management, simply put, is about leaving yourself a backup plan. Holding some positions while keeping others flexible allows room to maneuver when the trend shifts.

Six proven trading principles

**1. The dual nature of consolidation breakouts.** Fake breakouts often occur during sideways moves at high levels, while bottoming phases can hide the risk of accelerated declines. Before confirming the true trend reversal, it’s worth holding your finger down—patience here is priceless. This is the most testing moment for traders’ patience.

**2. Liquidation hotspots during sideways trading.** Data shows that about 80% of liquidation events happen during sideways oscillations. The reason is simple—without a clear market direction, participants are most easily caught. Doing nothing is often the best strategy.

**3. Practical rhythm of contrarian operations.** When a candlestick shows an extreme large bearish (downward) candle, it often signals the peak of panic. This can be an opportunity to accumulate positions. In the long run, the logic of buying on dips and selling on rallies, though counterintuitive, has been validated through multiple cycles.

**4. The rebound pattern after rapid declines.** The faster the price drops, the more vigorous the subsequent rebound tends to be. Slow declines might just be a correction, but waterfall-style crashes often set the stage for a strong bounce. This reflects the market’s emotional pendulum effect.

**5. Pyramid-style position building.** This is a common institutional technique—adding to positions in stages during the bottom phase, which helps lower the average cost. Instead of going all-in at once, layered deployment is more prudent.

**6. The pace of clearing positions during trend reversals.** When a surging coin suddenly enters sideways consolidation, withdraw your principal first and let the profits run. If a crashing coin stabilizes during sideways movement, don’t gamble on a rebound—cut losses decisively when needed. When the trend shifts, speed can be life or death.

Position management may sound old-fashioned, but it’s always the foundation of survival. The crypto world isn’t short of stories about overnight riches; what’s scarce are traders who can preserve their gains. These rules aren’t mysterious—what matters most is execution.