The pitfalls of the crypto world—I've hardly stepped into any and I’d be embarrassed to say I’ve traded coins. Liquidations, bankruptcies, zeroing out overnight—these stories unfold every day on exchanges. But interestingly, within this market, some people have doubled or even multiplied their initial capital dozens of times in just half a year by following strict strategy systems. This is not luck, but a deep understanding of human nature and market rhythm.

The core is actually simple, but 99% of retail investors can't do it. Remember these three sentences: **Never go all-in, trade without emotional involvement, never gamble on luck**. These three iron rules are the minimum threshold for making money in this market.

**How to act during a sharp decline? Use the "Three-Stage Bottoming Method"**

Bottom-fishing on the left side is the easiest way to get caught off guard because many rush in when the price halves. In reality, a sharp decline is often a prelude to a trap. A smarter approach is to build positions gradually, like an alligator hunting—patiently waiting underwater.

Step 1: Try-water position, invest 20% of your total. After the price halves, observe RSI for three consecutive days below 30, with trading volume significantly shrinking. Only then do you cautiously buy.

Step 2: Defensive position, invest 30%. When the trend stabilizes and market sentiment is steady, add to your position, anchoring your cost at the previous support level.

Step 3: Main attack position, invest 50%. When trading volume expands and the price breaks above the 30-day moving average, this is the real heavy position opportunity. Set a stop-loss at 5% and strictly execute.

Key detail: The interval between each additional position should be at least a 10% increase in price, to avoid overly dense costs.

**How to chase during an uptrend? "Add on at key points" is the right way**

Many people turn red-eyed when chasing a rally, but chasing a rally and chasing a high are two different things. True signals to add to your position require probability support:

Pioneer position (30%): When the 5-day moving average crosses above the 10-day, and volume exceeds 1.5 times the average of the past 5 days, it’s time to start deploying.

Main force position (30%): When the price retraces to the 30-day moving average but doesn’t break below, and MACD shows a second golden cross, it’s a sign of a major upward wave.

Death-defying position (40%): When volume breaks through previous resistance levels, and this sector’s hotness ranks in the top three in the market, it’s time to heavily participate.

But remember: do not chase stocks that have surged more than 30% in a single day. Such rapid gains are often signals of distribution.

**Risk management is the foundation of compound interest**

Many people make big money but end up losing it all back—mainly because risk control was poor. The secret to compound interest is simple: don’t lose your principal.

If a daily drawdown exceeds 5%, stop-loss immediately—no exceptions. Many are reluctant to cut losses, always hoping for a rebound, but end up losing more.

When profits reach 50%, withdraw the principal, leaving only the gains to seek further profits. This mindset is much more relaxed and helps sustain longer.

In terms of position allocation, use the "Iron Triangle" model: allocate 50% to mainstream coins like BTC and ETH, 30% to current hot leaders, and keep 20% in cash for reserves. Whether in a bull or bear market, this allocation can be flexible and adaptable.

There are no gods in the crypto world—only an understanding of market rhythm and restraint over human weaknesses. Those who truly make money are often disciplined enough to execute their strategies consistently. The market always rewards patient traders and punishes impulsive gamblers harshly.

Start changing your position habits today: control risk, follow discipline, and let profits compound. Protecting your principal is the only shortcut to turning things around.