In the past two years, I've seen too many friends in the crypto world with only a few hundred dollars of capital, working during the day to make money, then rushing into the crypto space at night. High leverage, meme coins, copy trading all-in, and the result is accounts cleaner than wallets.

Honestly, the real reason small funds get wiped out isn't because of lack of money, but because of excessive gambling tendencies. Always hoping to turn things around in one shot, but forgetting that the crypto world's most skilled move is to zero out in one go.

I previously mentored a beginner starting with $500, using just three iron rules, reaching $28,000 in three months, with zero liquidation during the process. He's not a genius trader, just someone who strictly follows the rules. Today, I’ll break down this method; only those who listen carefully will be qualified to play in the crypto space.

**The core logic is actually very simple: the advantage of small funds is agility and flexibility, not reckless rushing.**

The first rule is: divide your principal into three parts; defense is always more important than offense.

**First part, short-term bullets (40%, about $200-$320)**

This portion only watches BTC and ETH, no altcoins. Small funds can't withstand the spikes and zeroing out of meme coins. Set stop-loss before each entry, take profit with 3%-5% volatility, do 1-2 trades per day max, and get out when done. You might think profits are thin, but small funds rely on compound growth, not a single big windfall.

**Second part, swing trading funds (40%, about $200-$320)**

Only trade when the 4-hour K-line breaks key levels with increased volume. Hold for 3-5 days, aiming for 15%-20% profit. If the target isn't reached, cut losses gradually—don't get emotionally attached to the market.

This approach is really about "waiting + discipline." The real test isn't picking the right coins but whether you can execute your plan.

**Third part, long-term holdings (20%)**

Pick mainstream coins you believe in, buy and hold. This part is used to hedge short-term risks and also provides psychological comfort. When short-term losses happen, watching this portion's gains can help balance your mindset.

Why divide like this? Because small funds fear a single mistake causing total collapse. The three-part system means that even if you lose all 40% in the short term, you still have 20% long-term holdings and 20% cash reserves to stay afloat.

**The second rule: stop-loss is more important than take-profit**

What’s the most common mistake among beginners? Losing money and trying to turn it around, or making profits and being reluctant to sell. This is the opposite of what you should do.

Think of stop-loss as buying insurance, not admitting defeat. Once set, don’t change it—cut losses when needed. This ensures longer survival. Conversely, be flexible with take-profit—if profits exceed 5%, reduce your position immediately, lock in half of the gains, and set the remaining stop-loss at your cost price. Even if the market drops later, you won’t lose money.

I’ve seen too many people give back all profits because they think "it might go up if I wait." Opportunities in crypto are everywhere, but your capital is only one.

**The third rule: don’t chase the pump, wait for a breakout**

Most small fund beginners trade too frequently. As soon as they see a coin move, they want to enter, but end up catching the last wave. The correct approach is to wait for the 4-hour key level to break with increased volume, then enter. The success rate will be much higher.

“Waiting” may seem like a waste of time, but it’s actually saving bullets. When bullets are limited, each shot should be aimed at the highest probability.

Finally, I want to say that these three rules aren’t complicated; what’s complicated is whether you can stick to them. I’ve seen too many people like this—after reading this kind of advice, they just give a like and then continue to gamble recklessly. If you don’t have the patience to follow through seriously, I really suggest you withdraw your crypto funds and stop messing around.

The growth of small funds isn’t achieved by one big move, but by stacking small victories over and over.