Having seen too many liquidation disasters in the crypto world, it’s really time to have a serious talk about this.

Recently, I heard of an investor losing from 100,000 U to 8,000 U, with mortgage and credit card debts all collapsing. I can imagine the despair they felt. The problem is—most of these tragedies aren’t due to market conditions, but rather poor mentality, bad habits, and self-sabotage.

Over the years, I’ve summarized several life-saving rules from countless liquidation cases. I hope sharing them can help those still struggling.

**First, be a spectator, then a player**

No matter how hot a new coin is, don’t rush. Wait for three signals—three days of flat trading, a 5-day moving average turning up, and trading volume surging over 50%. Only then should you try a small position of 5%. If the conditions aren’t met, keep observing. Eat, sleep, relax—what’s the rush?

**Range-bound markets are the best time to add positions**

When the market is full of “cutting losses” sounds, and there are over 500 cutting-loss orders, that’s often a sign to add. It’s okay to add with unrealized profits, but never touch the principal. The principal is your lifeline; profits are just on paper. Trading your life for numbers is the fastest way to die.

**Don’t panic during sharp drops, don’t be greedy during sharp rises**

When a waterfall drops, first check if the previous low was broken and where the panic index stands. If not broken, stay calm. During a rebound, sell 30% to lock in gains, and let the rest trail with a moving stop-loss, so profits can run free.

**Long bearish candles with high volume are bottom-fishing signals**

Long bearish candles, high volume, and no breach of previous lows—that’s a signal. Conversely, if a bullish candle exceeds 5%, sell half first, and leave the rest under stop-loss supervision.

**Always keep some cash on hand**

Single-coin position should not exceed 20%, total portfolio should stay under 70%, and 30% must be in cash. Full positions are gambling with your life; those who know how to hold some cash are the real experts.

**Review before bed—very important**

If you lost money today, ask yourself three questions before sleeping: Did I buy impulsively just because I was itchy? Did I set too-wide stop-losses and hesitate to cut? Did I use my principal? After asking, sleep well—markets won’t give you a discount because you regret.

Bottom line, trading is about following a checklist. Write these rules into a checklist, execute repeatedly until they become habits, and profits will naturally follow.