Friends, let's talk about something real. After years in this circle, I've seen people get rich overnight and also lose everything overnight. Many people always ask if there's a reliable method. My answer is: yes, and it's so silly it makes people laugh. But precisely this kind of 'silliness' filters out 99% of the restless ones, allowing a very few to survive and thrive.
1. The simplest 'three-stage rocket': from 10,000 to 10 million
Don't be fooled by those flashy concepts. The underlying logic of making money is simple: use manageable capital, capture a few certain trends, and then repeat this action.
For example, don't think it's far away:
Step one, you have 10,000 yuan. Find an opportunity to turn it into 100,000. This step is the hardest because your capital is small, the margin for error is low, and it requires extremely high focus and patience.
Step two, you have 100,000. Find another opportunity to turn it into 1,000,000. At this point, your mindset will change, operations can easily distort, and discipline is more needed.
Step three, you hold 1,000,000. One last time, seize the opportunity to rush to 10,000,000. At this point, what you are fighting against is mainly greed and fear.
Many people spend their whole lives struggling at the first step, not because they lack skills, but because they always think about getting rich overnight, jumping between various opportunities, ultimately leaving nothing behind. Those who truly succeed are those who focus on one goal and execute with a 'dumb' method.
2. My personal trading philosophy: just do three things
Based on the logic above, my own system revolves around three cores:
1. Choose coins: only cast nets where there are many fish
I never cast nets everywhere. Capital is precious and must be concentrated. I only look at three types of coins:
Breaking the critical point: for example, a coin has been consolidating for a long time, suddenly breaking through the key resistance level with high volume. At such times, don't hesitate, the initial confirmation signal of the trend has come. Don't think 'is it too high', the first wave of the trend is often the most violent.
There are leading stocks with real narratives: every stage of the market has its main line, such as AI from a while ago, and before that, Layer2. If you choose, pick the top two recognized in this track, don't gamble on those 'new stories' you've never heard of. The leaders have the most capital and attention, live long, and rise sharply.
Don't choose a market cap that's too large: I prefer those with a total market value between 100 million and 1 billion USD. Too small, and they can easily go to zero; too large, and it's hard to push them up. In this range, once capital pays attention, the explosive power is amazing, and they are likely to develop independent trends.
2. Add more: only 'pour oil on the fire' when making profits
This is the core of risk control and also the touchstone of mindset. My iron rule is: never, never average down when losing money.
For example, I prepared 500,000 to make a wave in the market. I will first take 200,000 to test the waters; only when this 200,000 starts to make a profit (for example, earning 20%-30%), proving my judgment is initially correct, will I consider adding the remaining 300,000 to participate in the main upward segment of the trend.
If I lose on the first trade and reach the preset stop-loss point (like -8% to -10%), I will immediately admit my mistake and exit, never adding another penny. Preserving capital is always the top priority.
3. Hold on and let go: rely on discipline, not feelings
Making dozens of times is not about one big gamble, but about multiple correct 'hits'.
After making a profit, withdraw the principal first: for a trade that has doubled my capital, I will unhesitatingly withdraw the initial invested principal part. This way, what remains is all profit running, and my mindset will be incredibly relaxed.
Stop-loss is winning: I set the maximum loss for a single trade to never exceed 5% of the total capital. Cutting losses indeed hurts, but it avoids fatal injuries. Surviving means there is a next round.
Overcome 'itchy hands': most of the time, the market is in chaotic fluctuations, and when there are no opportunities, just watch quietly. Many losses come from ineffective trades driven by 'fear of missing out'. Patience in waiting for that high-certainty signal is more important than anything.
3. A practical trend tool: use EMA200 to determine long or short
To judge the overall trend, I like to use a simple tool: EMA200 (200-day Exponential Moving Average). It is smoother than ordinary moving averages and better represents the long-term trend.
Price steadily stands above EMA200: I assume this is a bull market. My main idea is to look for opportunities to go long, and the pullback is an opportunity to get in. At this time, don't always think about 'topping out'.
Price is firmly pressed down by EMA200: this is a bear market. My main idea is to short after a rebound or just watch. Don't easily 'catch the bottom'.
Price fluctuating wildly around EMA200: this is a choppy market, direction unclear. I basically don't participate in such markets, as the win rate is low and it consumes energy. It's better to rest.
Remember, our goal is to eat the body of the fish, don’t always think about eating from the head to the tail. In a clear trend, use the 'dumb' method to repeat the right actions.
Lastly, let me say something from the heart
On this road, technical analysis only accounts for 30%, while mindset and discipline account for 70%. I have seen too many technical experts who faced irreparable losses due to a single lapse in discipline. This market is never short of stars, but what it lacks are long-lived ones.
If you always feel like you're being led by the market, perhaps it’s not that there are too few opportunities, but that you want too much. Slow down, constrain yourself with the simplest framework. Do complex things simply, and repeat simple things.
I am Lao Chen, an old player who has been toiling in the circle for many years.
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