3 Survival Strategies for Small Investors in the Crypto Market

In the crypto market, rapid asset evaporation is no longer a rare occurrence. Recent data from several exchanges shows that the total value liquidated amounts to hundreds of millions of dollars, with the majority being small investors “copying the whale” (shark). Many people believe that simply following the orders of large investors can lead to “quick wealth,” but the reality is completely different. The risk tolerance of whales compared to small investors is like night and day: a 20% loss for a whale is just temporary, while a 10% loss for a small investor can mean nearly losing their entire account. Therefore, with a small capital, the most important goal is not to make a lot of money quickly, but to preserve capital and survive in the crypto market. Below are three basic strategies to help small investors maintain safety and increase opportunities for sustainable profits.

1. Maintain a maximum principle of 5% capital for each order In crypto, greed is the biggest enemy of small investors. The important principle is to never use more than 5% of total capital for a single order, no matter how accurate the market prediction may be. For example: if the account has 50,000 USD, each trade should have a maximum order of 2,500 USD. When using 2x leverage, if the price moves against by 10%, the loss would only be 500 USD, equivalent to 1% of the total capital, which does not affect the “core” of the account. This principle helps investors avoid the risk of being completely wiped out when the market fluctuates sharply and still have the opportunity to continue trading. 2 Allocate capital multiple times instead of going “all in” Whales can pour millions of USD at once to buy coins, but small investors do not have this ability. The solution is to split the capital into multiple orders, for example: First time: 30% capital, to test the market. Second time: add 30% if the market goes down 5%. Third time: add the remaining 40% if the market continues to adjust. This method helps reduce the risk of buying at high prices and optimizes the average price of the order. Even when the market adjusts, investors are not heavily affected and have the opportunity to take advantage of the recovery to lock in profits. 3 Narrowing the position when there is profit A common mistake of small investors is wanting to take it all, leading to profits “evaporating” when the market reverses. An effective strategy is: when profits are achieved, reduce positions to “lock in a portion.” For example: if you place an order of 5,000 USD, when the profit reaches 20%, you can reduce it to 3,000 USD, ensuring that the realized profit is not lost if the market adjusts. This is like a layer of insurance for profits, helping to increase stability and reduce psychological pressure. Conclusion In the crypto market, slow and steady wins the race, and risk management is the top priority. Small investors need to remember that preserving capital is more important than making quick profits. The three strategies above – limiting the maximum capital per order, allocating capital multiple times, and reducing positions when there are profits – are practical tools for surviving and developing sustainably in this harsh volatile environment. The crypto market is not a casino, and long-term survival is the true path to victory.