Survival Rules for the Crypto Market: 15 Tips to Avoid Common Traps

After going through a complete market cycle, I have summarized some valuable lessons. These lessons come from the "tuition" I have paid, but they have also helped me avoid many traps that could lead to a complete collapse. Today, I have organized these experiences into a set of rules to share with everyone. The purpose of these rules is not to make you rich overnight, but to help you survive in this high-risk market. Even in a bull market, risks still exist, and improper operations can lead to significant losses.

The following rules are not absolute, but they can help you reduce risk in this uncertain market.

1. Avoid being a forerunner of trending events.

For highly anticipated blockchain events, the first participants often suffer losses. For example, early investors in certain popular projects have incurred significant losses. The correct strategy is to patiently wait until market sentiment stabilizes before assessing risks and returns. If the entire crypto community is buzzing about something, early participation is usually unwise.

2. Use perpetual contracts with caution

Perpetual contracts are primarily designed for investors with large amounts of capital, and ordinary retail investors should not use them recklessly. This tool is usually used to supplement positions or for small low-leverage trades. High-leverage trading is extremely dangerous and can easily lead to a total loss of funds.

3. Stay alert and be cautious in making friends.

In this "Wild West" style of finance, true friends are few and far between. The market is filled with cases of betrayal or deception by trusted parties. It is best to assume that everyone may have ulterior motives and not to trust anyone lightly.

4. Do not blindly worship project founders

Founders are the type of people who require the most vigilance. Throughout history, there have been many cases where founders have caused significant losses for investors. Do not view them as heroes; remain alert.

5. Maintain a skeptical attitude towards suspicious behavior.

If you find the behavior of the project team suspicious, you should proactively question and express your concerns. By asking questions, you can prompt more people to pay attention to potential issues until the team corrects its suspicious behavior. This is done to protect your own interests.

6. Avoid long-term locking

Locking tokens for months is a common mistake. Locking may face the risk of smart contracts being hacked, and it may also give the project team the opportunity to take actions that are unfavorable to investors. It is important to maintain the liquidity of assets.

7. Stay away from controversial projects and figures.

Certain notorious figures in the industry and the projects they are involved in are best avoided. These individuals may have a serious record of misconduct, and participating in their projects carries high risks.

8. Do not chase high prices

Do not buy assets that are experiencing parabolic price increases. While it may occasionally succeed, the probability of failure is higher. It is wiser to patiently wait for the market to adjust.

9. Focus on market capitalization rather than unit price

Many people focus too much on the price of a single token while ignoring the market capitalization. When assessing the potential of an asset, one should base it on whether the market capitalization is reasonable, rather than just looking at the price.

10. Take profit in a timely manner.

If current profits can significantly improve your quality of life, don't hesitate, decisively take profits. The market will always be there, and opportunities will continue to arise. A moderate sense of financial security will make you a better trader.

11. Be cautious when connecting to unfamiliar applications

Be extra careful when using new applications, as this may lead to asset theft. It is recommended to test with a small amount of funds first, and ensure safety before using primary funds.

12. Do not be superstitious about the "super cycle"

The "super cycle" theory suggests that the market will continue to rise, but this view may lead to erroneous decisions. It is important to maintain a rational and skeptical attitude.

13. Stay positive in a bear market

Bear markets are not scary, and don't give up because of them. In fact, the biggest gains often occur at the end of a bear market. During a bear market, you should focus on improving your skills and preparing for the next bull market.

14. Avoid "mysticism" themed tokens

Buying tokens related to "mysticism" may bring unexpected risks. The founders of such projects often have impure motives, so it's best to stay away.

15. Stick to your beliefs.

This is the most important rule and the only way to stay grounded and humble. While it may not be possible to achieve it completely, the effort to practice it is in itself a form of growth.