I once mentored a cryptocurrency novice last year. Their account had only $1,200, and every time they placed an order, their fingers would tremble a bit. She admitted that this was money saved over a long period, and she was afraid that one wrong move would wipe it all out.

My advice to her was straightforward: "Don’t think about becoming rich overnight. Follow the rules step by step; time will help you grow your snowball."

Over five months, her account grew from $1,200 to $32,000, and she never got liquidated during that period. Some say, is this luck? I don’t quite agree. Looking at my five years of trading experience, those who make money are often not because they have extraordinary insight, but because losers tend to fail in execution and mindset. Especially small-cap players, whose risk resistance is inherently weak; every step must be taken carefully.

**Capital allocation is the foundation of survival**

From the start, I made it clear to her: "First, allocate your funds properly; this is your first line of defense."

My plan is simple: divide the $1,200 into three parts, each with its own purpose:

$500 for intraday short-term trading. Only trade mainstream coins like Bitcoin and Ethereum, take profits at 3%-5%, and don’t be greedy or wait too long.

$400 for swing trading. Enter only when the market direction is clear, usually holding for 3-5 days, aiming for steady gains.

$300 to keep untouched. This is her emergency fund. No matter how turbulent the market, treat this money as non-existent, used to ensure she still has a chance to recover if her judgment is completely wrong.

This allocation method may sound rigid, but in the crypto world, this kind of “rigidity” helps small investors survive longer. I’ve seen too many people, holding just a few thousand dollars, go all-in on margin, get inflated after three days of rise, and then their obsession with turning losses into profits shatter after a cycle of decline. The result? A quick wipeout.

**Sense of rhythm and profit-taking awareness**

The biggest mistake small investors make is greed. After earning 30%, they want 50%, but the market turns around and they give it all back. I told that novice: since our capital is small, we can’t rely on a single trade to turn things around; we need to accumulate gradually.

Her subsequent approach was: set profit targets for short-term trades and exit when reached; for swing trades, if the gains are enough, reduce positions gradually, rather than waiting for profits to revert. Although the gains per trade may not seem spectacular, the account curve becomes especially stable.

Up to now, the common phenomenon in the crypto space is that some make quick money through analysis skills, but more often, people fail due to lack of discipline. That novice managed to grow from $1,200 to where she is now, simply because she followed this methodology without exceptions.