I have a friend who achieved wealth through cryptocurrency trading. His story is quite legendary and serves as a living example among those around me. He now spends his days traveling and enjoying the "problem" of having more money than he can spend.

A few years ago, he was just like us, earning a regular salary and living a typical 9-to-5 life. However, through a chance opportunity, he entered the world of blockchain and cryptocurrency. Initially, he had limited knowledge of this field—concepts like Bitcoin and Ethereum were quite vague to him. Yet, driven by curiosity about new developments and a sense of adventure, he embarked on his crypto trading journey.

The turning point in his wealth accumulation came from a relatively unknown altcoin. At that time, most people focused on mainstream coins like Bitcoin and Ethereum, but he targeted smaller, emerging coins in the market, particularly early-stage projects. In 2018, he decisively invested in a coin called Chainlink (LINK), which was priced under $1. Many individuals were unfamiliar with this coin, viewing it as a minor player in the crypto market, not worth attention. However, he conducted extensive research and discovered that the technology team and application scenarios behind this coin were robust, especially its significant potential in blockchain data on-chain technology.

The beginning was not smooth. My friend recalls that shortly after entering the market, the crypto sector experienced substantial volatility, causing his account to drop nearly 30%. Many panicked and sold off, with some even cutting losses and exiting. He faced hesitation about whether to hold or liquidate, as a 30% loss was significant for him. Fortunately, he persisted and did not let short-term market fluctuations shake his confidence.

That persistence yielded returns far beyond expectations. By 2020, Chainlink surged unexpectedly, with the price climbing above $20. Not only did he refrain from selling at that point, but he continued buying in batches. When the price exceeded $30, he finally cashed out. Rough estimates indicate he earned nearly $5 million USD in net profit from this Chainlink investment alone. From an initial price under $1 to a return exceeding 30 times, this small coin became his stepping stone to wealth.

Beyond Chainlink, he invested in other coins. For instance, in early 2021, he acquired tokens from DeFi projects like Uniswap (UNI) and Synthetix (SNX). These projects delivered considerable returns during the DeFi boom, though not as spectacular as Chainlink, with each coin appreciating 5 to 10 times and resulting in substantial overall profits.

Of course, he has experienced losses. He admits that early on, he shorted Bitcoin, believing its price rise was too steep and due for a correction, using leverage. However, the market continued to climb, and his account lost 40% within days. This loss taught him valuable lessons, particularly about the risks of leverage, making him realize that blindly amplifying funds regardless of market conditions is highly dangerous. Since then, he has avoided high-leverage trading, focusing more on risk control and money management.

Now, he has achieved financial freedom, having quit his job long ago, and lives an enviable lifestyle. He no longer obsessively monitors the market as before, instead dedicating more time to traveling the world and enjoying life.

Here are some of his insights, which may inspire those still exploring the blockchain world.

1. Know when to take profits

He emphasized that the most crucial aspect is to exit timely after significant profits and to be content with gains. When account profits exceed expectations, avoid greed; instead, leave the market, take a break, or travel to relax. This approach helps in calmly assessing future investment moves. Do not wait for a market reversal and regret later, as volatility is often unpredictable.

2. Reflect if losses exceed 10%

Losses are inevitable in investing. However, he stressed that if losses exceed 10% consecutively, one must pause and identify the cause. Many become obsessed with "breaking even" and add more funds when losing, sinking deeper into an unrecoverable trap. During losses, calmly analyze whether it stems from market shifts or personal errors. Adjusting strategy promptly is far more important than charging ahead blindly.

3. Avoid unclear short-term trades

For crypto trading, especially short-term operations, his advice is: refrain from acting if uncertain. These moments are prone to losses. Often, the market appears favorable, but without 100% confidence, the best choice is to wait and observe. Investing is not gambling; if unsure, do not trade. Maintaining caution helps prevent unnecessary losses.

4. Don’t chase coins up over 50%

Coins often surge rapidly in short periods, but he warned against chasing those that have risen more than 50%. He explained that while short-term spikes attract attention and capital, they frequently represent traps. Buyers risk being caught when bubbles burst, facing significant risks. Remember, substantial gains often precede substantial declines.

5. Control emotions during high-volume rallies

Another key insight: after continuous gains, resist profit temptation during high-volume rallies. Many novice investors chase highs during market surges and get trapped by false pumps. He specifically highlighted that emotional control is critical at such times. Given market volatility, when volume spikes at highs, it is best to stay on the sidelines rather than jump in recklessly.

6. Buy low during weakness, buy dips during strength

Timing is crucial. His strategy involves buying low during weak markets and buying on dips during strong ones. The core is to align with market rhythms rather than follow emotions. When the market is weak, it presents an opportunity to build positions at low levels; when strong, avoid chasing highs and instead wait for pullbacks to act.

7. No adding positions without 100% confidence; build positions in batches

Regarding adding positions, he advised: never add without full understanding and 100% confidence. Adding positions carries risk; many blindly add during market rises, but if the market reverses, losses multiply. Thus, he recommends building positions gradually at low levels. This lowers average costs and reduces volatility risk.

8. Operate within familiar patterns

He also emphasized trading within familiar patterns to earn low-risk profits. For coins under consideration, have a clear strategy and pattern, avoiding trend-following or gut feelings. Whether using technical or fundamental analysis, base decisions on well-understood and experienced approaches. This helps maintain relative safety in an uncertain market.

9. Don’t jump into weekly timeframe pullbacks lightly

Lastly, he repeatedly stressed: do not enter weekly timeframe pullbacks impulsively.

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My friend gained financial freedom trading Link and shared this story