The risks in the crypto market are never randomly distributed. After observing enough traders, you'll find that the patterns of losses are astonishingly similar—like the same play being performed repeatedly.

**Three Classic Patterns of Losing Money**

First: Overleveraged positions with no stop-loss. The market drops by only 10%, but your account evaporates by half. The reason is simple—positions are so large that every percentage point of fluctuation can change your heartbeat, making stop-loss lines essentially useless. What is the real solution? Limit the risk on each trade to 2% of the total account balance. When profitable, don’t add to the position; if it hits the stop-loss, automatically exit. Turn trading into a purely mechanical operation—emotions can't interfere.

Second: Frequent trading. Making 20 trades a day, and after a month, the profits earned are barely enough to cover fees. The crypto market has never been a speed game; it’s about patience and sense of direction, not finger agility. Some set rules for themselves: a maximum of 3 trades per day, and if they make more, they disconnect from the internet and enforce a cooling-off period. It sounds extreme, but the results are surprisingly effective.

Third: Information overload. Bombarded by Twitter, Telegram, and various rumors until late at night, the final result is—buying at the highest point and selling at the lowest. A practical method is to set aside "information fasting time" once a week, during which you only look at on-chain real data and large wallet transfer records, filtering out all rumors and noise.

**Three Layers of Risk Management**

Knowing the common pitfalls, how can you systematically avoid them? You need to build a three-layer protection system.

The first layer is position allocation. Divide your funds into three parts: 30% for accumulating main cryptocurrencies like BTC and ETH, which serve as the ballast of your account and remain relatively stable amid volatility; 40% for arbitrage between exchanges or stablecoin yield farming, with more controllable risk; the remaining 30% is for chasing trend opportunities with floating capital, and only start dollar-cost averaging after a significant decline. The benefit of this allocation is that even if one sector encounters problems, the overall risk resistance of the entire account remains intact.

The second layer is the mechanized execution of stop-loss and take-profit. Set the stop-loss at 8% below the cost price; once triggered, close the position immediately—no room for psychological battles. For take-profit, exit in stages—for example, when the gain reaches 50%, sell half to lock in profits, and hold the remaining half to continue chasing the bull market. This approach ensures profit certainty while avoiding missing big moves due to excessive caution.

The third layer concerns attitude towards leverage. Leverage is like a double-edged sword—profits are amplified, but losses are magnified as well. Before using leverage, always "wear gloves," meaning you must truly understand its dual nature and not be blinded by promises of high returns.

**A Realistic Shift in Trading Mindset**

The biggest change from being a pure trader to a long-term survivor isn’t how complex your strategy is, but whether you can let go of desire. Market opportunities are available every day, but those who survive to seize the next big one are often those who have learned self-discipline during boring waiting periods.