Many people blame the market for their losses, saying it was a misjudgment of the trend. But after years of navigating the crypto world, I’ve uncovered a harsh truth: **90% of losses are not due to misreading the market, but stem from a "hot-headed" decision before opening a position**.

I used to complain about how unpredictable the market was, but I later realized—true risk isn’t about how the K-line fluctuates, but about the impulsive hand that places the order. Now, before every trade, I force myself to calmly answer five questions as if I were a robot. This method has helped me avoid countless pitfalls, and today I’ll share it openly.

**1. Am I trading in the direction of the trend or against it?**

Trading against the trend is like riding against the wind—it’s exhausting and unlikely to go far. Many people fantasize about "bottom fishing" or "top catching" to become overnight millionaires, but reality is cruel: the trend is the result of the collective effort of the entire market. Trying to fight it alone is like a mantis trying to stop a chariot.

I now adhere to one strict rule: **When the daily chart trend is upward, never take short positions lightly; when the trend is downward, no matter how strong the rebound, don’t get itchy to buy**. Last month, Bitcoin was consolidating sideways, with many betting on a breakout at support levels. I observed that the weekly MACD hadn’t yet golden-crossed, so I stayed on the sidelines. When the dump finally came, those confident in "bottom fishing" got buried. Riding the trend may not always bring huge profits, but it helps you survive longer.

**2. Is this signal really solid, or am I just self-hypnotizing?**

The crypto market is full of "false signals": after a big drop, you think it’s time to rebound; after a rapid rise, you’re afraid of missing out… These are emotional traps. Now I only recognize two types of signals:

**Technical resonance** — such as a key level with volume breakout, or a weekly golden cross combined with a daily pullback that holds, these are real signals.

**Fundamental support** — recent project developments, large-scale financing, or tangible progress, not just "I feel this coin will go up."

Ambiguous opportunities are equivalent to risk. My habit is: **If I can’t find at least three pieces of evidence supporting a trade, I simply give up on it**.

**3. Where is my stop-loss level?**

A trade without a stop-loss is gambling. I set my stop-loss clearly before opening a position, usually at a critical support level where technical breakdown occurs. Once triggered, I close the position immediately—emotions and fantasies are useless at that moment.

**4. What is the risk-reward ratio of this trade?**

Even if the signal is strong, if I could make $100 but risk losing $1000, it’s a losing deal. Before each trade, I carefully calculate the target profit and maximum loss ratio. Generally, I only consider trades with at least a 1:2 risk-reward ratio.

**5. Is my mindset prepared?**

This is the most overlooked point. When holding a losing position, psychological pressure can lead to reckless decisions—adding to the position, stubbornly holding on, or risking everything. So before entering a trade, I ask myself: if I lose on this trade, can I accept it? If the answer isn’t firm, I don’t open the position.

These five questions may seem simple, but very few people execute them mechanically. Most losses happen between hesitation and impulsiveness. Don’t let the market’s volatility carry you away—first master your trading discipline, and making money will become a natural side effect.