Last year, at the beginning of the year, my recently graduated cousin came to me holding 12,000 yuan he saved from his internship, saying he didn't want to squeeze into the crowded morning subway anymore.

At that time, I didn't expect that this 12,000 yuan would turn into 5.2 million in just three months.

No insider info, no luck gambling—just three ironclad rules based on lessons learned from pitfalls, and he followed them to the letter.

Rule 1: Use only 2x leverage, with a maximum of 4% of his capital in a single coin position.

In the early days, I tried 15x leverage, earning 400,000 yuan in a single day and thinking "making money while lying down is easy." But when regulations came, I lost 800,000 yuan in no time.

Now, I’ve set a strict limit with my cousin: no more than 2x leverage, investing at most 4% of his capital in BTC, and no more than 3% in ETH. No matter how crazy the market gets, he never adds to his positions—staying alive is the priority before making money.

Rule 2: Allocate 90% of funds to mainstream coins, 10% as a testing fund.

In the past, I put 250,000 yuan into altcoins, and when I made 1.2 million, I thought "it can still go higher," so I didn't withdraw in time. In the end, the project team ran off, and my account was left with only 30,000 yuan. Now, I tell my cousin to put 90% of his money into BTC and ETH, and the remaining 10% as "test money" for new coins. Even if the new coins lose everything, the mainstream coins' market remains stable.

Rule 3: Always set a 7% hard stop-loss on every trade; never hold through a loss.

I used to be foolish—seeing a coin drop 12%, thinking "it might bounce back," but I kept adding to my losses and ended up losing 600,000 yuan, which I had saved for a house.

Now, I tell my cousin firmly: every trade must have a 7% stop-loss order, set as a conditional order. When triggered, it automatically exits. Even if I later realize it was a mistake, I never regret it—losing is okay, but losing the opportunity to recover isn’t. Once the capital is gone, there’s no second chance.

Every day, he does just two things: at 9 a.m., he checks the 4-hour K-line of mainstream coins. If the price is stable above EMA20 and volume is increasing, he enters. At 8 p.m., he confirms that the stop-loss hasn't been triggered and then closes the app to do other things.

In three months, he never chased a hot coin, never used leverage again—just this "simple method" and slow compounding.

5.2 million isn’t luck; it’s the result of embedding these ironclad rules into his trading. The biggest pitfalls in crypto aren’t market trends—they’re the temptations of leverage, the traps of altcoins, and the pain of stop-losses.

If you want to avoid these pitfalls, I’ve organized my cousin’s trading records for you.