Continuous Losses for 3 Months? Here’s a Capital Preservation Strategy for Beginners

When I first entered the cryptocurrency market, I witnessed many people jumping in with dreams of “passive income” or “financial freedom.” The reality is far from rosy: about 90% of newcomers lose so much in the first three months that only a small portion of their capital remains. This is not an exaggerated warning, but the real result I’ve observed over five years of following the market.

I was once a “member” of this group. Seeing K-line charts spike, I impatiently poured half a year’s salary into the market, hoping a few trades would buy me a new phone or computer… But when the market plunged, I panicked. Instead of exiting, I tried to “catch the bottom” to lower my average cost, continually buying as prices dropped, and ended up with just a single digit left in my account.

What taught me a lasting lesson wasn’t suddenly grasping the “secret to price prediction,” but learning to control my emotions. Many people think the hard part of trading is predicting up or down, but in reality, the hardest part is controlling your own hands. You can make a plan before entering a trade, but once you’re in, thoughts like “wait a little longer,” or “afraid of missing out” will push rationality aside.

4 Golden Steps Before Opening a Trade: Capital Preservation Strategy for Beginners

To deal with psychological weaknesses, I’ve distilled four mandatory steps before opening any trade, which are the foundation for maintaining stable profits:

1. Rely on signals, not feelings

   • Only open trades when there are clear technical signals, such as moving average crossovers or pattern breakouts.
   • Never buy just because you “heard it’s about to go up” or “others are buying.”
   • No signal = no trade. Missing out is better than making a mistake.

2. Set a stop-loss level as soon as you open a trade

   • Place a stop-loss just below a key support level.
   • If the price hits it, exit immediately. Stop-loss isn’t admitting defeat—it’s buying insurance for your account.

3. Plan your take-profit levels clearly

   • Define your target zone before entering a trade.
   • When you hit your first target, take 50% profit, then observe the market for the rest.
   • Don’t be greedy trying to “catch the top”—no one can predict the exact top or bottom.

4. Control your position size

   • Each trade should not exceed 10% of your total capital.
   • Even in extreme markets, stop-losses won’t significantly impact your account.
   • Remember: there are always opportunities, but if you lose your capital, you’re out of the game immediately.

Planning Is More Important Than Emotions

Many people think “plans can’t keep up with the market’s changes,” but in reality, trading without a plan is the biggest risk. The market doesn’t care about your emotions, but you can use a plan to protect your capital.

After trading for a while, you’ll realize this isn’t just a game against the market, but a battle against yourself. Accepting small losses allows you to wait for bigger profits; controlling momentary excitement is what creates sustainable income.

If you find yourself stuck in the loop of “buying the dip, selling the rally” or staring at the K-line not knowing whether to enter or exit, pause for a moment and remember these four steps. The crypto market doesn’t lack opportunities, only those with the rationality and patience to hold onto them.