I exchanged 200,000 yuan for the most expensive class—about how not to ruin yourself in the crypto market.

Honestly, I was initially a gambler who went all-in on every trade. So what happened? I didn’t dodge a single one of the three fatal flaws:

My mindset collapsed immediately; going all-in means tying your emotions to the market. Every rise and fall can take half your life away. Without cash on hand, you have no bullets on the battlefield—you can only watch opportunities slip away. The scariest part is, the market doesn’t care about feelings, it’s here to cure that overconfidence of "I’m definitely right."

Later, I developed a three-layer position management method, and that’s how I survived.

**Foundation Layer 40%-50%**: mainly dollar-cost averaging of Bitcoin and Ethereum, with a target of holding for over 3 years. This layer is the ballast, no matter how big the storm, the ship won’t capsize. **Flexible Layer 30%-40%**: can include Bitcoin, Ethereum, plus 1-2 other mainstream coins, for swing trading, but individual losses should not exceed 10% of this layer. **Cash Layer 20%-30%**: all in stablecoins or fiat currency. This layer is emergency funds and ammunition for hunters, always keeping the option open.

When executing this set of rules, there are three core formulas:

Single trade stop-loss cannot exceed 2% of total funds, forcing yourself to place small bets each time. Buy in batches, at least three times, with ratios roughly 3:4:3, avoiding missing out or buying at the top. After profits, raise the stop-loss to protect the principal first, then let the gains continue to run.

Use different paces for different market conditions. In a bull market, holding on is winning; follow the trend and gradually take profits. In a bear market, you must endure; at this time, increase the foundation layer’s dollar-cost averaging to wait for panic selling. In a sideways market, the simplest approach is to do nothing reckless—watch more, act less.

If you want to start this plan now, follow these steps:

First, immediately redistribute your funds in a 5:3:2 ratio. Second, write down the rules and post them somewhere you see every day. Third, treat yourself as a machine without emotions and strictly follow the plan for three months.

Many people ask me, is position management really that important? My answer is—this is not an elective course, it’s a survival course. Learning to use position sizing to create a sense of security for yourself is the only way to truly break free from the gambler’s mindset and become a rational investor. The market will always be there, opportunities won’t stop, the key is to find your own rhythm so you won’t get lost in the market.