Having navigated the cryptocurrency market for many years, I increasingly understand that those seemingly simple rules are often the easiest to overlook and can be the most decisive in whether you profit or lose.

**Trend is King; Going Against the Market is Suicide**

Many people always think, "I have a unique insight" to operate in reverse. But what’s the result? The market’s power far exceeds individual judgment. When prices are rising, check if the 5-day, 10-day, and 20-day moving averages are arranged in order—this is a bullish signal. At this point, only go long, not short; when the market is falling, and the moving averages are arranged downward, choose to observe and avoid trying to bottom fish; during consolidation, take small positions to test the waters, waiting for a clear direction to emerge.

**Capital Preservation is the First Bottom Line**

Is this number frightening? A 30% loss requires a 43% rebound to break even; a 50% loss needs to double in value to recover. This is just a mathematical problem, but the psychological pressure is even greater. Therefore, set stop-loss levels in advance—either based on technical levels (such as breaking below the 5-day moving average or previous lows) or percentage (exit when loss reaches 5%). Hit the stop-loss without hesitation and exit; don’t hold onto the hope of a rebound.

**Position Control is the Foundation of Mindset**

Full position trading can turn you into a slave of the market; holding no position can cause missed opportunities. During an uptrend, maintain 50-70% of your capital; during sideways markets, 30-50%; during downtrends, hold no position or try with less than 10%. Do not allocate more than 30% of your total funds to a single coin or stock, so you can stay rational amid volatility. When your position is set, your mindset will naturally stabilize.

**Hot Topics vs. Cold Traps**

Why are hot topics popular? Because they have policy support, concentrated funds, and strong profit effects. What about cold stocks? It’s not that there are no opportunities, but they lack attention, with low trading volume (daily average below 50 million), and insufficient upward momentum. Don’t be fooled by the psychology of "picking up bargains"; cold stocks are cold stocks—stay away from them.

**Greed and Fear Are Two Sides of the Market**

Market tops often occur when "even my grandparents are opening accounts to trade crypto"—at this point, retail investors are collectively greedy to the extreme; bottoms are when "people are cursing how bad this market is"—at this point, collective fear reaches its peak. So, when the sector is wildly popular and hitting daily limits, gradually reduce your positions; when trading volume shrinks drastically and sentiment is extremely pessimistic, it’s time to slowly deploy.

**The Last Point: The Boundary of Cognition Is the Ceiling of Returns**

Steady profits come from within your cognitive scope. If you understand consumer stocks, focus on consumption; if you research short-term trading, specialize in that; if you have insights into value investing, pursue that—develop your own trading system and know what you’re doing. Avoid sectors you don’t understand, no matter how hot they are. Not being driven by market emotions—that’s the mark of a mature trader.