Newbie mistakes in the crypto world are not about market judgment, but about not managing funds at all.

Look at how many people with just a few thousand dollars go all-in on a single coin, with a mentality like a gambler—either doubling up or completely blowing up. Playing like this essentially means betting your life with your funds, and if you keep gambling like this, the final outcome is usually the same.

Long-term successful small fund players do one thing first: diversify their positions. A friend of mine started with $1,200 and later grew it to $38,000. His secret to success lies here—he divided his funds into three parts from the very beginning, each with a clear purpose, never mixing them.

But diversification isn’t just about splitting money into several parts blindly. True diversification involves setting rules for each amount of money: take profits when it’s time, cut losses when needed. I’ve personally verified this method, and it really works:

**Short-term quick funds: 30%**
— This part is used to capitalize on intraday volatility. Each trade aims for a 5%-10% profit target; take profits and exit. Don’t think about getting rich in one go. Even if you lose, strictly control single-trade losses to no more than 2% of total funds. When you hit that limit, close immediately and wait for the next opportunity.

**Mid-term trend funds: 50%**
— This is the main source of your account’s income. Focus on mainstream coins like Bitcoin and Ethereum, and only enter when they show a clear upward trend. If no trend is visible, stay put. Once the direction is confirmed, follow it, take profits in stages, and let each wave of market movement fill your bag.

**Emergency reserve funds: 20%**
— Never touch this part, no matter how tempting the market looks. This is your insurance fund. When short-term and trend parts experience setbacks, it gives you a chance to turn things around instead of losing everything in one blow.

The core logic of diversification is simple: it’s not about spreading gains, but about spreading risk. Small funds fear a single catastrophic loss the most, so every dollar must be carefully managed to survive longer and earn more steadily.