The core to profitability in the crypto market is establishing a system of “high-confidence opportunity identification + strict risk control,” rather than relying on luck. The following is a validated framework:

1. Opportunity Screening: Focus on High-Probability Scenarios

a. Trend Following:
- Only participate in clear daily trend signals (e.g., price stabilizing above EMA50 + MACD red histogram continuously expanding for bullish trends, or vice versa for bearish trends), avoiding frequent trades in choppy markets.
- Example: When Bitcoin breaks above previous highs and weekly candles close positive, follow the trend with a small position, setting stop-loss 3%-5% below the previous high.

b. Event-Driven:
- Pay attention to high-impact events (such as Federal Reserve rate hikes, major Ethereum upgrades, or approved compliant ETFs), entering after the event becomes clear and the market forms a consensus (e.g., risk assets rebound after rate hikes).

c. Valuation Anchoring:
- Establish valuation frameworks for mainstream coins (such as Bitcoin’s Stock-to-Flow model, Ethereum’s staking yield + on-chain activity). Gradually build positions when prices are significantly below historical average ranges, and gradually take profits when above the average.

2. Risk Control System: Survival is the prerequisite for profit

a. Position Management:
- No single position exceeds 5% of the principal; in extreme conditions (like black swan events), reduce position size to below 1%.
- Leverage use: Only employ up to 3x leverage when trend clarity is confirmed; beginners are prohibited from using leverage.

b. Stop-Loss Rules:
- Every trade must have a stop-loss; trend trades’ stops are set outside key support/resistance levels (e.g., for long positions, below the recent low), short-term trades’ stops do not exceed 2% below entry price.
- Use “trailing stops” to protect profits (e.g., after a 5% price increase, move stop-loss up to entry price +2%).

c. Emotional Control:
- Set daily/weekly maximum loss limits (e.g., 3% of principal); stop trading once hit.
- Avoid revenge trading (increasing position size after losses to recover), strictly adhere to preset strategies.

3. Cognitive Barriers: Surpass Retail Thinking

a. Reject “News-Based Trading”: 90% of rumors are traps; focus only on transparent, core data (such as on-chain transaction volume, institutional holdings changes, official regulatory policies).

b. Long-Term Perspective: Short-term volatility of mainstream coins (e.g., 10%+ intraday swings) is normal; align holding periods with trend levels (daily trend: 1-4 weeks; weekly trend: 1-3 months).

c. Continuous Iteration: Review trading records weekly, analyze win rate/profit-loss ratio, eliminate ineffective strategies, and optimize entry timing.

Risk Reminder: The crypto market has no daily price limits, and black swan events (such as exchange collapses or regulatory bans) occur frequently. Even strict adherence to strategies may result in losses. It is recommended to participate with “idle funds,” investing no more than what you can afford to lose (typically no more than 5% of total assets).