Learn from Mistakes: A Survival Guide to the Crypto Market

In past market cycles, I made many mistakes due to a lack of experience. Although these mistakes were costly, they became valuable lessons that helped me avoid many traps that could lead to significant losses. Today, I want to share some rules derived from these experiences. The purpose of these rules is not to make you rich, but to help you survive in this high-risk market. Even in a bull market, risks still exist, and improper operations can lead to serious losses.

Although the following rules are not absolute, they can help you reduce risk in this uncertain market.

1. Avoid being among the first participants in trending events

When a blockchain event attracts widespread attention, the first participants often suffer losses. For example, early investors in a decentralized trading platform and the first participants in a certain NFT project both experienced painful lessons. The correct strategy is to patiently wait until market sentiment stabilizes, and then assess the risks and rewards. If the entire crypto community is fervently discussing something, early participation is usually not a wise choice.

2. Use perpetual contracts with caution

Perpetual contracts are primarily designed for large capital players, rather than ordinary investors. Most people do not possess the abilities of some well-known traders. This tool is typically used to complement positions or to conduct small trades with low leverage. High-leverage trading is extremely dangerous and is the most effective way to quickly deplete an account.

3. Stay vigilant and trust cautiously

The crypto market is the "Wild West" of finance. There are no real friends here, and even those who appear friendly are no exception. The market is filled with stories of deception and betrayal. One should assume that everyone may have malicious intent, even potential fraudsters. Do not trust anyone easily; assume that everyone could be selling off your assets in the market.

4. Do not blindly worship project founders

In the crypto market, project founders are one of the groups that need to be most vigilant. They can cause investors to suffer huge losses. Many well-known founders have disappointed investors multiple times. Do not view founders as heroes; instead, assume that they may deceive you.

5. Maintain a skeptical attitude towards suspicious behavior

If you notice any problematic behavior from a founder or team, you should actively question and express your concerns. By raising questions, encourage more people to join the ranks of those who are questioning until the team changes its suspicious behavior. Those who blindly support may suffer heavy losses, and you need to protect your own interests.

6. Avoid Long-Term Token Lockup

Locking tokens for months is a common mistake. This not only faces the risk of smart contracts being hacked, but it can also lead project teams to make decisions that are unfavorable to investors. Maintain the liquidity of assets so that you can respond quickly when needed.

7. Stay away from controversial figures and projects

Some well-known figures are infamous in the community for their involvement in large-scale fraud. Try to avoid these individuals and the projects they are involved in. Stay vigilant and take responsibility for your assets.

8. Do not chase highs and sell lows

Avoid purchasing assets that are experiencing parabolic price increases. While it may occasionally be successful, the probability of failure is higher. Patiently wait for the market to adjust and look for better entry opportunities.

9. Focus on Market Capitalization Rather than Unit Price

Many people are easily confused by the unit price and overlook the importance of market capitalization. One should base their judgments on the reasonableness of market capitalization rather than solely focusing on price. Understanding the concept of market capitalization helps in making more informed investment decisions.

10. Timely Profit Taking

If the current profits are sufficient to improve your quality of life, do not hesitate; cashing out a portion of your profits at the right time is a wise move. The market is always there, and opportunities will continue to arise. Set reasonable goals, such as earning profits equivalent to two years' salary; this sense of financial security will make you a better trader and also make life easier.

11. Be Cautious When Connecting New Applications

Be extra cautious when using any new applications, as this may lead to asset theft. It is recommended to test with a small amount of funds first and ensure safety before using the main funds.

12. Stay rational, do not blindly believe in "super cycles"

The so-called "super cycle" refers to the view that the market will continue to rise. It is wise to remain skeptical about this. Do not ignore market risks simply because you believe in this concept.

13. Staying Patient in a Bear Market

When the market enters a bear market again, do not give up. In fact, the biggest gains often occur at the end of a bear market. During a bear market, one should focus on improving their skills, honing trading techniques, and preparing for the next bull market.

14. Invest in Special Themed Tokens with Caution

Tokens related to certain special themes may bring unexpected consequences. The founders of such projects may have ethical issues or ill intentions. Choose investment targets carefully to avoid unnecessary risks.

15. Stick to Your Investment Philosophy

This is the most important rule and the only way to remain humble and grounded. Although it may be difficult to achieve completely, the effort to practice itself is a form of growth. Maintaining your own judgment and principles in the market, rather than going with the flow, is key to long-term success.