The differentiation among crypto investors happens quite quickly. Some can steadily accumulate chips amid market fluctuations, while others keep falling into traps and getting caught. Many think it's due to information gaps, but in fact—the key lies in whether they grasp a few fundamental market principles.

These rules sound simple and straightforward, but very few can stick to them. That ruthless execution often determines the final direction of their accounts.

**Risk control is the first lesson; full position is never an option**

90% of beginners make the same mistake: chasing after a price surge, only to get caught at the top. It’s not because they lack intelligence, but because they can’t get past their psychology. Experienced traders do the opposite—when the market is bloodied and most people dare not look at the app, that’s the best window for positioning.

Another common trap: going all-in on a single coin. That’s like betting all chips on one number, and the outcome is predetermined. Keeping about 30% in liquid funds gives you the strength to buy the dip during a crash. Going all-in cuts off your retreat, and even the biggest opportunities will leave you staring with empty hands.

**Consolidation isn’t resting; it’s preparing for a trend reversal**

Many don’t understand consolidation, thinking it’s a sign of no market movement. In reality, sideways movement at high levels often indicates risk accumulation, while bottoming out may be brewing a reversal. Data shows that 80% of liquidations happen during sideways periods—times when traders are most itchy and most likely to get caught. Instead of rushing to buy in, it’s better to wait until the trend direction is confirmed—this approach is actually more profitable.

**Contrarian thinking reveals the market’s true nature**

A particularly scary big red candle on the K-line? It’s often not a bad signal but an opportunity. The market’s bottom is hidden in despair. Conversely, when prices are soaring wildly, be extra cautious. Buying on red, selling on green may sound counterintuitive, but that’s how the market actually operates.

**Crashes follow patterns; speed determines rebound strength**

The magnitude and speed of a crash are correlated. The slower the decline, the milder the rebound; the crazier the fall, the greater the potential for a strong rebound. When a waterfall-like crash occurs, be prepared to scoop up chips—this is when risk is most thoroughly released, making it a relatively safe entry point.

**Strategic planning is essential for building and retreating**

At the bottom, add 10% to your position every 10% drop, effectively lowering your average cost. At high levels, after a sharp rise and if sideways signals appear, don’t be greedy—take out your principal first, let profits run. Conversely, after a crash, some prefer to cut losses and go sideways, which can be more rational.

The crypto world is never short of opportunities; what’s lacking is execution. These five rules sound simple, but very few actually follow through.