Article reprint source: TechFlow
Author: Based Money Lich King
Compiled by: TechFlow
In the last market cycle, both in the bear and bull markets, I made many mistakes due to my lack of experience. However, these mistakes were valuable lessons for me. I paid a high price for the market, but I also avoided many traps that caused me to lose almost all my gains. I summarized these lessons into a set of rules and strictly followed them. Today, I want to share these rules with you. The purpose of these rules is not to make you rich, that is your business. The real meaning of these rules is to help you survive in this high-risk market. You must know that even in a bull market, risks still exist and you may "explode" due to operational errors.
Of course, the following rules are not absolute, but they can help you reduce risk in this uncertain market.
Rule 1: Never be among the first participants in highly anticipated blockchain events
If a blockchain event has sparked widespread attention, the first participants are usually punished. For example, early investors in Sushiswap suffered losses, and the Otherside deeds project experienced the same. There are many similar examples. Those who bought Sushi too early ultimately paid a painful price. The correct strategy is to patiently wait until market sentiment stabilizes and the panic selling (FUD) or excessive hype gradually subsides, then reassess whether the risk and reward are worth it. If the entire crypto community (Crypto Twitter, CT) is buzzing about something, early participation is often a failure.
Rule 2: Never recklessly use perpetual contracts (Perps)
Perpetual contracts are designed for 'giga whales,' not tools for ordinary retail investors. Most people are not GCR, Hsaka, Andrew Kang, or Nexus. You should not trade perpetual contracts. This tool is typically used by whales to supplement their positions or make small bets at low leverage. Leverage of 10x or more is like putting yourself under the control of a demon; never attempt it. Perpetual contracts are the fastest way to zero out funds, bar none.
Rule 3: Always assume others have malicious intent
You are in the 'Wild West' of finance. There are no real friends here, and even if someone acts like your friend, they are no exception. There are countless stories of being deceived in the market, with many being betrayed, attacked, or even scammed by those they trusted. You should assume these people may be malicious strangers, even potential scammers. Do not easily trust anyone, assuming everyone will sell your assets in the market.
Rule 4: Do not blindly worship founders
In this market, founders are the ones to be most wary of. They often cause losses for investors and token holders. For instance, Do Kwon, Dani Sesta, Andre Cronje, etc., have repeatedly disappointed investors, along with Chef Nomi, the Starknet team, the founders of Celsius, and others. Do not view founders as heroes; assume they will deceive you, as they likely will.
Rule 5: If the team's behavior is suspicious, you must 'create panic' and 'pretend to care'
This rule complements Rule 4. If you notice problematic behavior from a founder or team, you should proactively 'create panic' (FUD) and 'pretend to care' (concern troll) about your assets. By questioning the project's behavior, you can rally more people to join in the questioning until the team abandons its suspicious actions. Those who blindly support the team may lose everything, while you need to protect your own interests.
Rule 6: Never lock your tokens
Locking tokens for months is one of the biggest mistakes I've ever made. Remember, never do this! Locked tokens may face the risk of smart contracts being hacked. Moreover, when teams know that investors' tokens are locked, they often engage in some unscrupulous behavior. For example, the Opening Ceremony event of TempleDAO is a typical case. Don't lock your tokens to avoid putting yourself in a passive position.
Rule 7: Stay away from Sisyphus
Sisyphus once executed a rug pull amounting to $60 million and remains at large. If possible, avoid him and the projects he participates in as an 'angel investor.' In this circle, Sisyphus is the most notorious seller. His actions can be described as an 'predator' and 'destroyer' on-chain. Stay vigilant and take responsibility for your assets.
Rule 8: Do not buy assets that are skyrocketing
Do not chase after assets whose prices are skyrocketing parabolically. While it may occasionally succeed, the probability of failure far outweighs that of success. Instead of taking risks, patiently wait for the market to adjust.
Rule 9: Focus on market cap, not price per unit
Many people fall into the trap of price per unit, especially supporters of XRP who believe XRP can rise to $10,000, or Shib can rise to $0.01. But in reality, these goals are unattainable. We should judge based on whether the market cap is achievable, not just focus on price. However, if others are willing to believe those unrealistic price targets, you can let them.
Rule 10: Remember to take profits
If you are currently experiencing financial difficulties, it is completely reasonable to sell part of your assets to resolve these issues. This market will always exist, and opportunities will always be there. Many people experience profit retracement while chasing a target number (e.g., 50,000, 100,000, 200,000). If these numbers can change your life, then decisively take profits. As Foo said, the goal is to earn profits equivalent to two years' salary from the market. This sense of financial security will make you a better trader and allow you to live more easily. In the long run, this adjustment in mindset will greatly benefit you.
Rule 11: Do not connect to unfamiliar applications casually
Be cautious before using any new application, as it may lead to your assets being stolen. It is advisable to test with a smaller wallet first, ensuring safety before using your main wallet.
Rule 12: Do not believe in the concept of 'super cycles'
The so-called 'super cycle' refers to the view that the market will continue to rise. Is this really a super cycle? I cannot be sure. But if it isn't, I don't want to make mistakes again by believing in this concept.
Rule 13: Do not give up during a bear market
When we enter a bear market again, I hope you have followed Rule 10 and taken profits in a timely manner. Bear markets are not to be feared, so do not give up on them. In fact, the biggest gains often occur at the end of a bear market. I am a living example. During a bear market, you should focus on improving your skills, honing your trading techniques, and preparing for the next bull market.
Rule 14: Do not purchase tokens related to 'mysticism'
Buying such tokens may lead to some unpredictable consequences. If you are a materialist and do not believe in these, at least know that the founders of these tokens are often morally questionable and have ill intentions. Choose your investment targets wisely.
Rule 15: Wholeheartedly adhere to your beliefs
This is the most important rule, and the only way to stay grounded and humble. While we may not achieve it completely, striving to practice it is a form of growth.