3 Trend Trading Principles to Help Investors Avoid 80% of Losses

In the crypto market, most losses don’t come from “bad picks,” but from investors stubbornly going against the trend. Many believe that “after dropping for a long time, it will bounce,” “this must be the final bottom,” “I’m guessing the right direction,” but the market never operates according to anyone’s emotions.

In trend trading, there is a saying that always holds true: “Follow the trend and survive, go against the trend and perish.” Below are the 3 most important principles in trend trading—just applying them correctly can help you avoid most unnecessary risks.

1. Observing “trends through the MA system”—signals clearer than any prediction Many people look at a series of candlestick patterns to find “reversal signals,” but overlook the simplest tool: the moving averages (MA).

The basic MA set includes: MA5: short-term MA20: medium-term MA60: long-term

How to read the trend: MA5 > MA20 > MA60 and all three are sloping upwards → clear uptrend, prioritize buy orders. MA5 < MA20 < MA60 and all three are sloping downwards → downtrend, prioritize staying out or selling/shorting.

When the short-term MA crosses below the medium- and long-term MAs, especially forming a “death triangle” shape, that’s usually a signal for a sharp decline.

MAs are the footprints of big money—following the footprints is always safer than making guesses on your own.

2. Trading volume—the “mirror of truth and falsehood” for trends The strength or weakness of a trend is not in the price, but in the volume: Price rises + volume increases → strong uptrend. Price falls + volume decreases → downtrend but not too dangerous. Price rises but volume gradually decreases → weak uptrend, vulnerable to dumps. Price falls but volume suddenly spikes → often a shakeout phase, possibly near a short-term bottom.

Volume is like the engine of a trend: Weak engine → the car won’t go far. No engine → every rally is a trap.

Many “pumps” in the market have shown: price moves first, but volume confirms the real trend.

3. When signals are unclear—“staying out” is the wisest choice Many investors lose not because of wrong analysis, but because they refuse to wait.

Sometimes the market enters a phase of: Narrow trading range MAs crossing back and forth Erratic volume Noisy candles, no clear direction

This is the most dangerous zone. The win rate is even lower than flipping a coin.

During these periods, trying to “enter for the sake of it,” “test with small orders,” or “trade for fun” often leads to unnecessary losses. On the contrary, those who know how to stay out will: Preserve their capital Maintain a healthy mindset Wait for a clear trend breakout to enter with a much higher probability of success

Crypto doesn’t reward those who trade more, it rewards those who are patient.

Conclusion The crypto market is not a casino, but a place where survival depends on discipline and logic.

The simplest yet most effective trading system always revolves around 3 factors: ✓ MA to identify the trend ✓ Volume to confirm the trend ✓ Patience to stay out when signals are noisy

By mastering these three principles, investors can avoid most risks, minimize unnecessary losses, and trade in sync with the market.