Survival Guide in the Crypto Market: How I Use the "Foolish Method" to Make Money

Learn How to Manage Capital – Survive Today for a Better Tomorrow Hello everyone, I am Nam. Today I want to share my very real experiences after many years in the crypto market. Last year, I witnessed a friend apply a method that might seem “foolish” at first glance, but he made over 5 million dollars despite the extremely difficult market conditions. What surprised many people was that his trading history looked… quite bad: nearly 80% of his trades were losses. So, what’s the secret? Hold onto your capital tightly. Survive first, then opportunities will come. In crypto, the ultimate winner is not the one who makes the fastest gains, but the one who can endure the longest. Capital Management – The Number One Survival Rule My friend has never traded big. Each trade uses a maximum of 10% of his total capital, and he cuts losses no more than 5% of that portion. If he loses three consecutive trades, he stops trading for a day to regain his composure. Many criticize him for being too cautious. But when those chasing huge profits have “disappeared,” he remains calmly on the sidelines waiting for opportunities. My clear perspective is: In crypto, longevity is more important than big wins. My personal principle is: Risk per trade does not exceed 2% of the total account. I determine the stop-loss point first, then calculate the position size so that if I’m wrong, I only lose 2%. This approach helps me avoid emotional trading during strong market fluctuations. The “Foolish Method” for Trend Analysis My friend doesn’t care about short-term waves or noisy signals. He only focuses on the big trend: 30-day moving average: If the price stays above this, it’s likely the market is in an uptrend. 200-day moving average: This is the “life-and-death line.” Buying the dip when the price is below this line is extremely risky. His strategy is: Follow the big trend – trade during minor corrections. Additionally, he places great importance on trading volume. Prices may not move much, but if volume spikes abnormally, it’s often a sign that big players are entering. When the market is dull, the community is pessimistic, and volume dries up – that’s usually when whales quietly accumulate. Recognizing Whale Traps Crypto is a psychological battlefield. To survive, you must understand how whales set traps: Long wicks at the top: often indicate an upcoming sharp decline. Slow price decline with no volume: whales are “wearing down” retail traders’ patience. Breaking resistance with weak buying pressure: very likely a false breakout. I always apply a 3-day confirmation rule for important breakouts to avoid falling into fake traps. When the market heats up, I take partial profits instead of waiting for the top. Because I understand that: After a sudden surge, a crash often follows unexpectedly. Pyramid Strategy – Let Profits Run My friend doesn’t chase after the price. He only increases his position when he’s already making a profit: Whenever the price rises by 10%, the new position size is halved. Gradually move the stop-loss in a favorable direction. This method helps to: Protect the principal capital Preserve profits And maximize the benefits of strong trends For short-term trading, I require a minimum profit/risk ratio of 1:1. For medium-term, I aim for at least 1.5:1. Psychology – The Decisive Factor Technical analysis is just the foundation. The fastest way to lose your account is through emotions. I have very simple rules: No FOMO, no chasing trades. Limit chart analysis to a maximum of 1 hour per day. Accept losses as an inevitable part of the system. After a series of wrong trades, I must take a break for 1 day. Just this small habit has helped me avoid many account crashes. Conclusion After many years of fighting in the market, I’ve derived a simple formula: Sustainable profit = Steady psychology (50%) + Discipline (30%) + Capital management (20%) Most people want shortcuts to get rich quickly, but the result is often leaving the market in frustration. Those who go slow and steady are the ones who go the farthest. The market is always changing. Only flexible and disciplined traders can survive long-term. Go slow – but go far. That is my survival philosophy in this stormy crypto world.