Last fall, my cousin confidently entered the crypto world with $5,000, but after three days, he was left with only $3,200, crying and asking if he had too much bad luck. After reviewing his trading records, I was amused—full leverage, consecutive wrong re-entries, choosing the right coins but blowing up the position—that's a classic case of "choosing the right coin, destroyed by poor money management."

Later, I shared with him 8 practical trading principles. He stuck to them for 3 months and managed to recover his funds to $4,800. Although he didn't experience rapid wealth, he could at least sleep peacefully. Today, I’m sharing this set of rules publicly in hopes of helping more people.

**Rule 1: Divide your funds into 5 parts, with a 2% stop-loss per part**

This isn't a new concept, but few people stick to it. Split your total capital into 5 parts, and for each trade, only use 20% of one part, with a strict 2% stop-loss. Sounds conservative? Even losing 5 times in a row only results in a 10% loss, leaving room for a comeback. My cousin made about 18 trades in the first month, and his drawdown dropped from a frightening 35% to under 12%, instantly stabilizing his mindset.

**Rule 2: Trend always trumps belief**

In December 2023, Bitcoin's daily EMA30 was trending downward, and many were eager to buy the dip. I advised him to stay out of the market. BTC then fell to $38,500, avoiding nearly 22% decline. See, the market doesn't care about your beliefs; following the trend is always a hundred times more reliable than shouting slogans.

**Rule 3: Don't chase coins that surge wildly**

Coins that jump 250%-350% in three days will likely give back 70%-85% within two weeks. This is a common tactic used by pump-and-dump schemes. In December, a certain meme coin surged 380% in a day. My cousin didn't chase it, and five days later, it returned to the original price. His friend chased it and is still crying over losses.

**Rule 4: Use MACD zero line as a traffic light**

Only consider going long when a bullish crossover occurs below the zero line, and start reducing positions when a bearish crossover appears above the zero line. This method filters out half of the false signals. After backtesting with this standard, his win rate increased from 50% to 62%-65%, much more reliable than relying on intuition.

**Rule 5: Add to winning trades, don't average down on losing trades**

After a profit of 10%, add to your position to turn small gains into big profits. But averaging down on losing trades only deepens losses. He used this approach to grow his SOL profit units by +32%, while others who averaged down were still stuck at -18%.

**Rule 6: No volume, just empty talk**

Volume increase at a low price indicates funds are entering; volume increase at a high price with stagnation suggests main players are offloading. In December, APT experienced a massive breakout. My cousin took a small position, and when he saw volume decrease the next day, he immediately reduced his position, avoiding the subsequent 10% pullback.

**Rule 7: Moving averages are your navigation**

Use the 3-day MA for intraday fluctuations, the 30-day MA for medium-term trends, the 84-day MA for major upward waves, and the 120-day MA to define the overall market. The price tends to follow the MA lines; never try to guess the top or bottom—that's a recipe for losing money.

**Rule 8: Ask yourself three soul-searching questions every day**

After trading, ask yourself: ① Is my logic sound? ② Are my signals truly confirmed? ③ Am I emotionally driven? He insists on writing a trading journal, and after reviewing it weekly, he found that 75%-80% of his losing trades were driven by emotions. He then blacklisted those trading methods.

Markets are always there, and opportunities are never lacking. But to stay on beat and avoid confusion, you need a plan, discipline, and regular review.