Surviving on the edge of liquidation—honestly, luck played a part in half of it, but more importantly, I stuck to a few principles later on.

Over the years in the crypto world, I've seen too many scenarios: newbies entering the market and doubling their money in three days only to lose it all in a week; veterans making a single mistake and getting liquidated; people going all-in on a coin and ending up broke. The worst was a friend whose account shrank from 100,000 to 30,000, and every day he was debating whether to go all-in to turn things around. Eventually, he stopped replying to me altogether.

Last month, a young guy reached out to me. His account had already halved, and I could feel the despair in his messages. I didn't talk to him about candlestick patterns or technical indicators. Instead, I honestly shared the few most effective rules I’ve summarized over the years. A month later, he told me he not only stabilized his losses but also started having consecutive profitable days.

So today, I want to share these principles with you. Whether you're a newcomer just entering the market or someone who's been in crypto for years, these rules might help you avoid the most deadly pitfalls.

**First Rule: Stop-Loss Is Always Your Lifeline**

The most common mistake I see is not setting a stop-loss. On the surface, it seems like you're "trusting the market to rebound," but in reality, you're gambling. You might exit with a small loss, but a sudden drop can wipe you out completely.

Money in crypto is endless, but your principal can be lost all at once. My approach is simple: before opening a position, determine your stop-loss level. Once in the trade, set it manually or use an automatic stop-loss order immediately. What's the benefit? First, it prevents panic decisions caused by watching your account decline. Second, when the market suddenly moves against you, you can calmly exit.

Many people say, "Wait a bit; maybe it will rebound," and when it does, that lucky feeling grows stronger. Next time, they’re even less willing to cut losses. The last unlucky time often results in liquidation.

**Second Rule: Frequent Trading Is Paying Tuition to the Exchange**

Newcomers often believe that the more they trade, the more chances they have to make money. I used to think the same, but I realized it’s a complete illusion. The downsides of frequent trading are numerous: transaction fees eat into your profits; each buy/sell is a potential mistake; and your mental state can be damaged.

I used to be a "trading fanatic," making over ten trades a day. But after a month, my hard-earned profits weren’t as much as I gained by patiently waiting for a few high-probability setups. Later, I changed my approach to just two or three trades a week, which turned out to be more stable.

**Third Rule: Risk Control Is More Important Than Profit Targets**

This principle runs throughout the entire trading system. Some people start out saying, "I want to make 20% on this trade," and then they leverage up or increase their position size to hit that goal. But that also multiplies the risk.

A more rational approach is to ask yourself: How much can I lose at most? Then, based on that, determine your position size and leverage. For example, if your account is 1 million and you can accept a 50,000 loss, you work backward to set your position size accordingly. Profit becomes a natural outcome of this disciplined risk management.

**Fourth Rule: Don’t Make Decisions When Emotions Are Running High**

When the market surges and your account shows significant unrealized gains, everyone wants to increase their bets. When prices plummet, you want to cut your losses quickly. Decisions made in these moments are almost always wrong.

My current habit is: when I notice obvious FOMO (Fear of Missing Out) emotions, I close the trading app and go for a walk. When I come back, I often realize that the so-called "must-enter-now" opportunity wasn’t as urgent as I thought.

**Fifth Rule: Learn to Admit When You’re Wrong**

This is easier said than done. Many people, once they open a position, subconsciously look for evidence that supports their view, ignoring signs that suggest they’re wrong.

When you realize your judgment might be flawed, don’t think, "Let’s wait and see if it reverses." Instead, admit your mistake immediately and cut your losses. There will always be new opportunities, but if this mistake costs you your capital, there won’t be a next time.

**Sixth Rule: Regularly Review and Find Your Rhythm**

Trading is like leveling up in a game—everyone has their own style. Some are suited for short-term, frequent trades; others for long-term holding. The key is to find your rhythm and stick to it.

I spend time each week reviewing my trading records: what worked, what didn’t, and why. Over time, I can identify my strengths and weaknesses, then continuously optimize my system.

These six rules may not sound profound, but it’s these basic principles that helped me survive multiple close calls with liquidation and made my trading more stable over time. The story of quick riches in crypto is tempting, but most people end up learning how to lose money fast. Instead of chasing wealth overnight, it’s better to learn how to survive long enough to succeed.