Disclaimer: The following is only a personal trading idea sharing and does not constitute investment advice.

I often hear beginners complain that their principal is too small to make money. But the truth is, having a mindset that despises a small principal already means you've lost.

I've seen many people enter the market with just a few hundred dollars, dreaming of "tenfold returns," only to have their accounts wiped out in a week or two. On the other hand, I know a friend who started with $600, never got liquidated, and never went all-in, yet managed to grow his account to over $20,000 in three years. The secret isn't luck; it's about being able to "stay alive."

He mainly used three methods, and today I’ll share his approach, all learned through real pitfalls.

**Step 1: Divide your funds into three parts, each with its own role**

The most common mistake among beginners is to go all-in at once. When the account rises, they get excited; when it falls, they start to cut positions. Playing with a small principal like this is essentially gambling, not investing.

A more rational approach is to split your funds into three parts, each with a clear purpose:

**Active Position (1/3):** Focus on mainstream coins like ETH, SOL, which have good liquidity. If the price fluctuates more than 3%, consider taking profits—don’t expect to ride the entire cycle. The crypto market moves fast; even small gains from frequent trading add up over time.

**Swing Position (1/3):** Wait for clear technical signals before acting. For example, when the price bounces off a support level or breaks through a resistance level with increased volume, then enter. Hold for about 3 to 5 days and then consider reducing your position. This method has a higher win rate and is less exhausting.

**Defensive Position (1/3):** Keep this money aside; unless there's a systemic market crash, don’t touch it.

Why divide like this? Because when most people are taking losses, you still have ammunition to buy the dip. It also helps maintain a calmer mindset. Position management may seem like a math problem, but the core is psychological resilience.

**Step 2: Only ride the middle of the trend, don’t chase the tails**

About 80% of the time in crypto is sideways movement, and major trends only occur a few times a year. Many people try to catch the entire move, but end up getting shaken out during consolidation.

A more pragmatic approach is to participate only in the most certain part of the trend. Wait until the price stabilizes at support, volume increases, and technical indicators confirm the trend before entering. Once the market shows signs of fatigue, exit immediately—don’t be greedy.

For example, if a coin drops from $1 to $0.5 and then rebounds to $1.5, you don’t have to start bottom-fishing at $0.5. You can wait until it breaks above $0.8 and the trend is clear before entering. This might mean a slightly higher entry cost, but the risk and psychological pressure are much lower.

**Step 3: Know when to do nothing**

This is the hardest lesson. When the market is uncertain, volume is shrinking, and technical signals are unclear, the smartest move is to wait.

Many losses happen not because of bad decisions, but because traders force themselves to act when they shouldn’t. If your account isn’t forcibly liquidated, it’s often your own impatience that causes the loss.

Small-principal traders have little room for error, so every trade must be as certain as possible. Better to miss some opportunities than to get beaten down by sideways volatility.

In summary: diversify risk, enter precisely, and wait patiently. Mastering these three points will make your account growth a relatively stable process, rather than a rollercoaster of gambling.