Retail investors in the crypto world often crash and burn, and frankly, there's only one reason — they jump in without properly calculating the risks. Their technical skills aren't much different; what's lacking is whether their brains are engaged.

Recently, I helped a friend organize his trading strategy. He started with 6,500 USD and turned it into 320,000 USD in four months. How did he do it? It's actually very simple, based on one principle: first, decide how much you can lose, then consider how much you can earn.

For short-term contracts, my approach is to trade with small positions and quick trades. Use 10,000 USD to do short-term ETH trades. If losses reach 3%, exit immediately; if profits reach 6%-8%, take profits in stages. It sounds slow, but stacking small profits one after another results in big gains. Trading is like walking on a knife's edge — when it's time to leave, don't hesitate.

For mid-term spot trading, a different mindset is needed. To ride wave swings, you must learn to tolerate pullbacks. Place your stop-loss at the "life-saving zone" — at the previous low or key moving averages. Once broken, exit unconditionally. When you gain 35%, sell half first; set a trailing stop for the rest, allowing about 8% retracement. No one can perfectly sell at the top, but locking in profits in high regions already means you've won.

The most critical point here is: position size determines your mindset, and your mindset determines the final outcome. When trading with small positions, a 20% drop in your account still allows you to sleep peacefully; with heavy positions, market fluctuations even by one point can make you restless. Trading heavily without setting a stop-loss? That's like driving on the highway without hitting the brakes — sooner or later, you'll have an accident.

Two key points must be remembered: stop-loss is not a cost, but a life-saving amulet for yourself; take-profit is not greed, but a reward for your discipline in the market.

Every order you place should be treated as if it might be your last. Markets are always changing, but once your principal is gone, the game is over. Whether you can recover your account depends not on how good the market is, but on whether you have the discipline to follow your rules. Those who survive and make money in the crypto space are always those who dare to act first and can stop losses in time.