A fan shared their experience of growing their account from 3,000U to 40,000U, which reminded me of the most common misconception in this circle. People always blame "lack of skill" for losses, but honestly, what really causes traders to go broke is often not technical issues—it's those out-of-control positions and the wishful thinking deep down.
So here’s the question: on the road to turning small funds around, what counts as "real skill"?
**Position Management: Survive to Have the Chance to Profit**
Never allocate more than 30% of your capital to a single position. This rule may sound conservative, but it’s the "bulletproof vest" for retail investors. Why? Because the crypto market moves fast, and a sudden spike can wipe out heavy traders, while light traders still have the chance to add or cut losses. That’s the difference.
Experienced traders often allocate their funds like this: 40% for long-term positions, 30% in mainstream coins like BTC and ETH, 20% for mid-term trades, and the remaining 10% for short-term attempts. The logic behind this is solid: diversified capital helps withstand sudden black swan events.
Don’t be fooled by stories of "getting rich overnight." While it’s true that altcoins can multiply tenfold in a bull market, a 90% drop is far more common. Instead of betting on small coins to become dark horses, it’s better to steadily operate on mainstream coins—when the bear market hits, these coins are at least more likely to survive, giving you a chance to bounce back.
**Take Profit and Stop Loss: Counterintuitive Discipline**
"Take profits when gains reach 10%-15%, close positions if losses exceed 4%"—this rule is ridiculously simple, but most people just can’t do it. Why? Because it’s so counter to human nature.
When prices rise, you always think they can go higher, telling yourself to wait a bit longer. When prices fall, you fantasize about a rebound, but the result is watching your profits turn into losses. How do successful traders make money? They treat each trade like an assembly line: trigger conditions and execute, leaving emotions and expectations aside.
Another common pitfall: many people only focus on technical indicators during review, ignoring the market sentiment and risk environment at the time. Such reviews are not very helpful and may even reinforce bad trading habits. Truly useful review involves checking whether you strictly followed your take profit and stop loss plan, whether you added positions when emotions were high, and whether you held on due to luck.
For small funds to turn around, it’s not about having a super sharp eye for choosing coins; it’s about whether you can survive to see the next opportunity.