After years of navigating the crypto market, I’ve uncovered a secret that many overlook—price fluctuations are just surface phenomena; trading volume truly reflects the market’s real state.

Starting in 2017 with just 2,000 yuan, and now my account has grown from four digits to nine digits, the journey hasn’t been smooth. I’ve experienced margin calls, multiple deep retracements, and countless nights glued to the screen until dawn. These painful lessons point to a common truth: surviving in this market is more important than how much you make.

Today, I want to share six trading principles I’ve developed with real money. Each one is a summary from past falls; mastering one can help you avoid many pitfalls.

**First Rule: Rapid rises followed by slow declines are often shakeouts; sudden rises and falls are true distributions**

When you see a coin’s price surge quickly and then gradually fall back, don’t rush to sell. This pattern is usually a manipulation by the big players shaking out those with unstable mindsets, while they remain in the game.

What’s the real danger signal? A sharp increase in volume followed by a waterfall crash. I remember a popular blockchain game token in 2021 that surged 80% in one day, only to open the next day crashing through everyone’s cost basis, with trading volume tripling. That’s a classic “pump and dump” scheme—those who didn’t exit in time are basically nailed at the top.

Key point: Price reflects market sentiment; volume reveals true consensus. Without understanding volume, you’ll never see the market’s true nature.

**Second Rule: Weak rebounds after a sharp decline are often traps**

After a market crash, a slight rebound will often trigger cheers, with people thinking “the bottom is here,” rushing to buy the dip. But these weak rebounds are usually the last bait to trap overly hopeful investors.

In a bear market, I’ve learned the most important discipline: don’t catch falling knives. Once the downtrend is confirmed, every rebound is like a falling blade—trying to catch it will only cause trouble.

**Third Rule: Divergence between volume and price signals a reversal**

When the price hits a new high but volume shrinks, or the price hits a new low but volume also diminishes, it indicates a lack of energy. Genuine trend reversals are always accompanied by abnormal changes in volume.

**Fourth Rule: Time is more valuable than options**

I’ve seen too many people lose everything because they misjudge the rhythm. Even if your directional judgment is correct, entering at the wrong time can shake you out. It’s better to reduce frequency and wait for clear opportunities.

**Fifth Rule: Retracement depth must be included in risk management**

A 20% drop from a high and a 50% drop are both losses, but their risk profiles are vastly different. When analyzing historical data, look at maximum drawdowns, not just average returns.

**Sixth Rule: Set stop-loss and take-profit levels in advance**

Know your exit conditions before entering a trade. Trading without a plan is like boarding a shaky boat without a ticket—any storm can sink you.

None of these six rules are based on guesswork; each has been repeatedly validated through real market fluctuations. The essence of the crypto market remains unchanged—strength begets strength, and the key to success isn’t luck but understanding the rules and executing with conviction.