Three years in the crypto market: the survival rules I learned from 7 “pitfalls”

If you ask me what is my biggest feeling in the crypto market in the past three years? I will tell you that it is not the excitement of skyrocketing or the panic of plummeting, but the profound lessons brought by countless "pitfalls".

Three years ago, I entered the market with the dream of getting rich overnight, imagining that I could easily achieve financial freedom. But reality is like a cruel teacher, using "pitfalls" again and again to teach me what it means to respect the market.

In the past three years, I seemed to have experienced a thrilling jungle adventure, and these 7 "pitfalls" are the maps and compasses I exchanged for real money.

 01 The Trap of Overtrading: Less Is More

When I first started trading, I was obsessed with staying "active".

Every candlestick looked like an opportunity to me, and every up move looked like a chance to make big money. But I soon realized that more trades did not equal more profits.

In fact, frequent trading often made my wallet lighter and my regrets heavier. Remember when I said I felt like I had to be in every trade? Yes, this mentality almost cost me everything.

More trades do not equal more profits.

Looking back, I've discovered that sitting still is often the smartest choice. If the market doesn't give you a clear odds, why force a trade?

Would you rather make five mediocre trades or wait for one great opportunity?

The answer is obvious now, but it took real money to really understand this. Trading out of boredom is like chasing a rally without doing research - a recipe for disaster.

 02 Fatigue is the enemy of trading

I wish someone had drilled this into my head earlier: Never trade when you are tired.

I used to think I could stay up all night staring at charts and watching the market like a hawk.

Well, I was wrong.

My decision making became as unreliable as a buggy smart contract. To be honest, how many successful trades have you made after staying up all night?

That's right, almost none.

Decision fatigue is worse than a flash crash. When you are exhausted, your brain takes shortcuts, and those shortcuts often lead directly to bad decisions.

Don't trade when you are tired.

There have been countless times when I was too stubborn to rest, broke my stops, and ignored risk management. Now, I make sleep a non-negotiable rule. If I am not mentally fit, I don't trade.

 03 Don’t Break Trading Rules Easily

One ​​of the hardest lessons I learned was this: Rules are not only guidelines, they are lifesavers.

Early on, I thought I was smarter than my trading plan. “Just this once,” I would tell myself, moving my stop or increasing my position.

Does it sound familiar? It should, because every trader has experienced this moment.

But here’s the truth: Your rules are there for a reason. They were learned the hard way.

Breaking the rules is like having no strategy in a bear market - it's only a matter of time before you're destroyed by the market.

Discipline is not about perfection, but about doing the right thing even when it's uncomfortable.

I've come to realize that the best traders are not those who never make mistakes, but those who stick to the rules even when they make mistakes.

 04 Emotional Roller Coaster: Managing Your Mental Strength

Now, let's talk about something most traders ignore until it bites them: mental strength.

Have you ever been stuck in a losing streak, with each trade being worse than the last? I have, and it feels a lot like trying to recover from a Rug.

Sometimes, the best option is not to take another trade, but to walk away completely.

This lesson hit me hard during a particularly tough period in my trading journey. I kept adding to my losing positions, thinking I could just force my way back into a profit.

What saved me in the end? Rest.

Walking away gave me the mental clarity I needed to start over. After all, what good is technical analysis if your insides are as messy as a hacked exchange fund?

 05 Risk Management: The Plain Secret of Survival

Let’s be real – Risk management may not sound sexy, but it is the backbone of successful trading.

Most traders focus on entries as if that is the holy grail, but exits are where the real magic lies.

Have you ever made a perfect entry, only to lose all your profits (and more) because you had no exit plan?Yes, we’ve all been there.

Position sizing, stop losses, and risk-reward ratios may not sound sexy, but they are fundamental to survival in the cryptocurrency markets.

Think of it this way: would you rather have ten small wins, or one big loss that wipes out your account?

The choice may seem obvious, but too many traders ignore these basic principles.

Remember, in crypto, surviving is winning.

 06 The Ego Monster: Staying Humile in a Bull Market

One ​​of the hardest facts to accept is that the market doesn’t care about your ego.

Nothing can inflate a trader’s ego more than a big win. Suddenly, you feel like a prophet predicting tops and bottoms, and that you’ve cracked the market’s code.

But reality hits you hard—the market has a way of reminding you who’s boss when you least expect it.

After making some nice gains early in my trading career, I started to feel like I knew it all.

Fast forward to the next cycle, my "sure win" trade was ruthlessly crushed by the market.

The market doesn't owe you anything, and being humble is the only way to stay in the game. Believe me, your pride is not worth trading your portfolio for.

 07 The Illusion of Advantage: Knowing When to Sit Back

This is a somewhat controversial point - sometimes, your biggest advantage is knowing when not to trade.

Too many traders force bets in areas they are not good at, thinking they must always be active. But ask yourself: Would you rather take a mediocre trade or wait for your opportunity?

I developed a simple rule - If I can't explain my edge in one sentence, I won't trade.

This method has saved me from countless bad decisions. Remember, the market will not run away. Opportunities will always be left to those who are patient and disciplined.

 08 Summary

Ultimately, successful trading is not about showing off victories or getting rich overnight. It's about consistently avoiding mistakes and preserving capital when the odds are really on your side.

Every point I share comes from my own personal experience and painful lessons.

So, the next time you are tempted to make a reckless trade or ignore your own rules, keep these principles in mind.

They may not guarantee you skyrocketing, but they will keep you in the game long enough to catch some real opportunities. After all, in the world of cryptocurrency, staying power is the ultimate winning weapon.

Original title: Trading Crypto for 3 Years Taught Me These Hard Lessons — Here’s What I Learned.
Original link: https://medium.com/thecapital/trading-crypto-for-3-years-taught-me-these-hard-lessons-heres-what-i-learned-137466b83905
Original author: Paul G
Translation: Vernacular Blockchain