Having spent 6 years navigating the crypto world, I turned an initial capital of 20,000 into millions through sheer discipline, avoiding all-in bets, gambling on luck, or full-margin leverage. What is the secret? Strict position management combined with systematic trading discipline. The reason my average monthly return can stabilize at 45% is the countless reviews and stop-loss executions accumulated over time.

I have taught this methodology to many people, some of whom doubled their accounts in just 3 months. Today, I will break down all the valuable insights I’ve developed over the years, focusing on those often overlooked but crucial details that can determine life or death in trading.

**The Power of Capital Allocation**

Divide your principal into 5 parts, using only one part per trade. Set a stop-loss at 8%, meaning a single loss will only harm about 1.6% of your total capital. It takes five consecutive losses to wipe out 8% of your principal—this level of tolerance allows us to survive in the market long enough. Conversely, once your judgment is correct, a take-profit target of over 12% is easily achievable. This is why you don’t need to win every trade; the system itself can help you generate profits.

**Trend Recognition Determines Victory or Defeat**

There’s a fundamental rule in crypto: rebounds in a downtrend are often traps, while pullbacks in an uptrend are genuine buying opportunities. Bottom-fishing can be risky, but buying on dips along the trend has a much higher success rate. This isn’t a psychological issue; it’s dictated by market structure.

**Avoid High-Risk Assets**

Whether it’s mainstream coins or small-cap tokens, rapid 300% surges are rare and hard to sustain. When a coin is stuck at a high level with little movement, it’s often a warning sign of an impending decline. Don’t always try to catch the last wave. The market’s “scythe” is always waiting. Our goal isn’t to bottom-fish or top-sell but to participate steadily when the trend is confirmed to be upward.

**Practical Use of Technical Indicators**

MACD is a useful auxiliary tool. When the DIF and DEA lines form a golden cross below the zero line and break above zero, it’s usually a sign to enter the market cautiously. Conversely, when MACD forms a death cross above zero and heads downward, consider reducing your position or exiting. These indicators don’t decide everything but help us make more rational decisions at critical points.

**The Correct Way to Add Positions**

The most common mistake in crypto trading is adding to losing positions. Doubling down when losing only deepens the trap. The correct approach is the opposite: only add to winning trades, never compromise on losing ones. This isn’t about mindset; it’s a mathematical fact. Adding to winners amplifies advantages, while adding to losers only increases risk.

**Volume and Price Never Lie**

A sudden increase in volume after a low consolidation phase signals a potential breakout—pay close attention. Conversely, high volume at a high price with stagnant movement should prompt an immediate exit. Volume-price divergence often indicates an upcoming reversal; it’s the market’s true language.

**Using Moving Averages to Filter Trades**

The 3-day moving average turning upward suggests a short-term uptrend; only when the 30-day MA flattens and then turns up is a medium-term trend confirmed; upward turns of the 80-day and 120-day MAs indicate stronger long-term support. Focus only on assets in an upward trend—the simplest yet most effective advice in trading.

**Reviewing Your Trades Is the True Core**

End each day with a review. Ask yourself: Is my current position logic still valid? Does the weekly K-line trend align with my previous judgment? Are there signs of trend reversal? This isn’t mere formalism but the only way to keep improving. Markets change, and so should our understanding.

The market is always there, and opportunities are endless. The key is to view each trade with a systematic mindset, avoiding reliance on feelings and luck.