When it comes to contract trading in the crypto space, why do some people keep losing repeatedly? The reason is actually quite painful—placing orders based on feelings, lacking a trading system, and following the herd mentality. Ironically, not losing would be a miracle in itself.

Over the years, I’ve stepped on many pits and finally developed a set of fairly reliable methodologies. These 7 iron rules are all lessons learned the hard way with real money. Following this approach can help you avoid more than half of the detours.

**The first is about capital allocation.** Divide your funds into 5 parts, and only use 1/5 for each position. Set a stop-loss at 10 points. What’s the benefit of doing this? If you make a mistake once, you only lose at most 2% of your total capital. Even if you hit the stop-loss five times in a row, your total loss remains within 10%. Conversely, take profits more aggressively—consider taking profits after a 10-point gain or more. This fundamentally helps avoid getting stuck in a deadlock.

**Following the trend is the easiest to overlook.** In a declining market, rebounds are often manipulated by the main players to induce buying. It looks like a quick rise, but it’s actually a trap; on the other hand, pullbacks in an uptrend are real buying opportunities. Instead of blindly bottom-fishing, wait for a low-price area with volume before buying. This greatly increases your success rate.

**Stay far away from coins that surge wildly in the short term.** Whether it’s top-tier coins like BTC and ETH or new tokens, after a rapid increase in a short period, it’s hard for the trend to continue. They often get stuck at high levels, then start a downward slide. Betting on such行情 is just giving away money.

**The MACD indicator can help confirm entry and exit points.** When DIF and DEA form a golden cross below the zero line and then break above zero, it’s a relatively safe signal to build a position; if a death cross occurs above the zero line, it’s time to cut losses or exit decisively.

**Volume and price movement are the soul of trading.** When volume surges during consolidation at low levels, it’s a signal worth following. But if volume surges at high levels and the price is still stagnant, run quickly—this is usually a sign of distribution.

**Trading only in uptrends is the simplest approach.** When the 3-day moving average is rising, there’s a short-term opportunity; when the 30-day is rising, a medium-term trend is forming; when the 84-day is rising, it’s the start of a major upward wave; and when the 120-day is rising, it’s suitable for long-term positioning. Operating according to this logic increases your chances of winning and reduces the need for constant adjustments.

**The last point: review your trades weekly.** Check whether your position logic still holds up, compare the weekly K-line trend with your initial judgment, and adjust your strategy in time. This can effectively prevent passive follow-the-market hype.