When trading, I often remind beginners with one sentence: "The smaller the account, the more cautious you need to be." Two years ago, I met a trader named Xiao Kai, who only had $480 left in his account. Every time he set a stop-loss, his hands would tremble. I told him straightforwardly: "Forget about 100x returns, let's first ensure that you’re still in this market three months from now."

Unexpectedly, this guy really persisted. Using three simple, almost trivial rules, he managed to grow his account to $12,000. Over these three years, he has never liquidated his position nor borrowed funds. Every piece of experience is a hard-earned lesson.

**Position allocation determines how long you can survive**

Dividing your funds into three parts makes your mindset much more relaxed.

The exploratory position accounts for 20%-30%, focusing on mainstream coins like BTC and ETH. As long as the volatility exceeds 3%, I immediately exit. This money is for feeling out the market temperature—profit, don’t brag; loss, don’t feel bad.

The main position accounts for 40%-50%, which is where real profits come from. You must wait for a volume breakout on the 4-hour chart before considering entry, and hold no more than 3 days. If you’re unsure about the trend, stay still—better to watch opportunities slip away than to shoot blindly.

The backup position accounts for 30%, and no matter how much the market dumps or spikes, I don’t move. This is your capital for turning things around, and also your psychological defense line.

I’ve seen too many people get trapped in the pattern of "going all-in once and then panicking and cutting losses." The core purpose of position division is to let your positions absorb volatility and to restrain your hands with discipline.

**Where are the best opportunities to scoop up profits**

Most of the market time is spent in consolidation. Frequent trading just contributes to exchange fees. My approach is very rigid:

Only enter when two consecutive volume-increasing candles appear on the hourly chart, and confirm that the weekly RSI is in overbought or oversold territory. Both conditions must occur together.

The logic for taking profits is simple: after earning 8%, take out 30% of the profit and store it in a cold wallet. The remaining part is set with a 2% stop-loss to continue holding. This way, even if there’s a pullback later, you’ve already locked in gains.

Many traders lose because they are too greedy—trying to turn small gains into big ones, only to lose everything when the market reverses. My habit is to take some profits when things look good, and let the rest run freely. This makes my mindset more stable.

There’s no black technology in this system; it’s just about perfecting the basics.