50 Essential Knowledge Points for Beginners in the Crypto World: Learn to Protect Your Capital First, Then Consider Making Money!#
The crypto world is not a casino, but a battlefield!
Some become rich overnight, while others lose everything. The key is that some enter with wisdom, while others come in naked with greed!
Many blindly rush into the crypto world in pursuit of wealth, yet they don't even understand the basic concepts: they can't read on-chain data, can't analyze candlestick charts, and don't even know how market makers harvest retail investors, ultimately becoming the ones left holding the bag.
Today, Old Zhao has summarized 50 essential knowledge points for beginners. First, learn to protect your capital, then think about profit. Once your capital is gone, the crypto world has nothing to do with you.
【Basic Concepts】
- What is Blockchain: A decentralized public ledger where transaction records are publicly available across the network, and altering data requires controlling 51% of the nodes.
- Public Chain/Private Chain/Consortium Chain: Public chains (like BTC, ETH) are open to everyone; private chains (like those within companies) require permission; consortium chains (like Ripple) are shared by multiple institutions.
- Difference Between Token and Coin: A Coin is "currency" (like BTC), while a Token is "points" (like UNI). Be wary of projects that confuse these concepts.
- The Essence of DeFi: Decentralized finance replaces banking functions (lending, wealth management) with code, but code vulnerabilities can lead to financial losses.
- The Value of NFTs: Digital ownership certificates, not ordinary images. Avoid "air NFTs" and consider: who will be the buyer?
【Trading Skills】
- Spot vs. Futures: Spot is direct asset purchase, while futures are leveraged bets on price fluctuations. Beginners are advised to start with spot trading.
- Basics of Candlestick Charts: Bullish candles (upward), bearish candles (downward), moving averages (average cost line). Avoid being misled by red and green colors.
- Support and Resistance Levels: The price rebound point is called support, while the drop point is called resistance. It is essentially a psychological game in the market.
- Significance of Trading Volume: A surge in volume may indicate a drop, while a decrease in volume may signal a rebound. Comprehensive analysis with trends is necessary.
- Stop Loss and Take Profit: Exit promptly when target profits are reached, decisively leave when stop-loss levels (like 10%) are hit. The crypto world is never short of new opportunities.
【Risk Control】
- Importance of Private Keys: The private key is the lifeblood of your assets; losing it means permanent loss. Avoid storing it in cloud drives or screenshots; prioritize using hardware wallets.
- Withdrawal Safety Steps: Withdraw from exchanges to wallets, first test with a small amount (like 0.0001), and confirm receipt before transferring larger amounts.
- Beware of Shitcoins: Tokens with names containing "Dog," "Shib," or "Floki" are 99% likely to be scams. Stay away from such traps.
- Recognize "Mentor" Scams: "Experts" claiming to help you "buy the dip" or "sell the top" are often scammers. There are no perpetual "stock gods" in the crypto world.
- Risks of Leverage: With 10x leverage, a 10% drop can lead to liquidation. Never bet your entire fortune.
【Ecosystem Awareness】
- Bitcoin's Positioning: "Digital gold," with a total supply of 21 million coins, its anti-inflation properties make it a value anchor in the crypto world.
- Ethereum's Role: An "operating system" supporting DeFi, NFTs, games, etc., but with high gas fees and limited concurrent capacity.
- Layer 2 Solutions: Such as Arbitrum and Optimism, solve Ethereum congestion issues, providing low fees and fast transactions.
- Cross-Chain Bridges: Enable asset transfers across chains (like Ethereum to BNB Chain). Choose mainstream platforms to avoid security risks.
- The Essence of Stablecoins: "Digital dollars" (like USDT, USDC, DAI) pegged 1:1 to the dollar, but be aware of the risks of USDT over-issuance.
【Project Analysis】
- Read the White Paper: Understand the project's goals, profit model, and team background. Prioritize reading the original English version over translations.
- Token Economic Model: Focus on total supply, distribution mechanisms, and lock-up rules. Stay away from tokens with unlimited issuance.
- On-Chain Data Verification: Analyze the number of holding addresses, transaction volume, and large transfers. Data is real but may be manipulated.
- Community Heat Assessment: Observe Twitter followers and Telegram group activity. Be wary of "pump and dump" schemes and focus on genuine discussions.
- Competitor Comparison Method: For similar projects (like Aave vs. Compound lending protocols, Solana vs. Avalanche public chains), compare security, speed, and other metrics.
【Tools】
- Exchange Selection: Binance, OKEx, Coinbase, etc. Beginners should start with spot trading, avoiding futures and leverage.
- Wallet Usage: MetaMask (Fox), TP Wallet, etc. Keep private keys secure and do not store them on exchanges.
- Market Tracking Software: CoinGecko, CoinMarketCap for checking rankings, market caps, and trading volume data.
- On-Chain Explorers: Etherscan, BscScan for verifying transaction records and address holdings.
- News Platforms Recommendation: CoinDesk, The Block for in-depth analysis; be wary of clickbait content.
【Mindset】
- Avoid FOMO: Don't blindly chase prices when they surge; be wary of traps set for selling at high prices.
- Resist FUD: Don't panic sell when negative news arises; be cautious of wash trading operations.
- Reject All In: Only invest spare money; avoid borrowing or selling property to trade crypto.
- Adhere to Long-Termism: Bitcoin has seen significant growth over ten years, but frequent trading causes most to miss out on profits.
- Learn to Take Breaks: Don't be greedy in bull markets, and don't panic in bear markets. The crypto world operates 24/7, but your mind and body need balance.
【Advanced Topics】
- Staking Mining: Earn interest by depositing tokens through DeFi platforms, but be aware of the risk of "impermanent loss."
- Liquidity Mining: Provide liquidity to trading pools to earn fees; avoid high-yield Ponzi schemes.
- NFT Investment Strategy: Focus on blue-chip projects (like BAYC, CryptoPunks) and avoid low-value NFTs.
- Participating in GameFi: Earning while playing requires examining the economic model; be wary of Ponzi-like games.
- DAO Operations: Decentralized Autonomous Organizations make decisions through token voting; avoid participating in easily manipulated small DAOs.
【Crypto Jargon】
- "Going All In": Betting your entire capital, a high-risk gambler's behavior.
- "Airdrop": Free distribution of tokens; be wary of scams requiring upfront payments.
- "Rug Pull": When project teams run away, causing tokens to become worthless.
- "Whales": Addresses holding large amounts of tokens, whose movements can influence the market.
- "Wash Trading": Intentional price suppression by major players to shake out retail investors.
【History】
- March 12 Crash: On March 12, 2020, BTC plummeted 50% in a single day, triggering massive liquidations.
- May 19 Massacre: On May 19, 2021, cryptocurrencies collectively crashed, halving the locked value in DeFi.
- Luna Collapse: In 2022, the algorithmic stablecoin Luna went to zero, evaporating $40 billion in market value.
- FTX Collapse: In 2022, the world's second-largest exchange, FTX, went bankrupt, and founder SBF was arrested.
- Bitcoin Halving: The supply is halved every four years; history shows "drop before halving, rise after halving," but dynamic analysis is needed.
These 50 knowledge points stem from the hard lessons learned in the crypto world. Save this article to avoid taking three years of detours!
Remember: The crypto world is not a money printer but a place for cognitive transformation. Every profit comes from your understanding of the world.
Master Basic Tools and Start Your Crypto Journey!#
With numerous projects in the crypto world, clarifying investment targets and strategies is crucial.
Blindly following trends in trading will ultimately lead to failure.
Below are the trading tools I commonly use to help you make efficient decisions.
Note: Due to platform restrictions, links to tools in the text need to be searched on Google.
1. SpotOnChain#
Crypto investment is not limited to exchanges. Many tokens cannot be purchased on exchanges, and whales often transfer assets on-chain.
On-chain analysis tools can reveal more market information.
SpotOnChain provides on-chain data reporting, address relationship visualization, monitoring alerts, and more. It can track institutional addresses, smart money addresses, and KOL holdings. Its database includes hundreds of influential addresses, including venture capital firms and CEX, helping you gain insights into large fund movements.
2. Arkham#
Arkham is also an on-chain analysis tool, offering alerts, tracking, and address transaction analysis. Compared to SpotOnChain, I prefer its interface, but unfortunately, it does not support Solana chain data.
3. Crypto Deal Flow#
The scale of project financing often reflects institutional confidence, indicating potential for price increases. You can check the financing history before investing. This tool is suitable for English users; Chinese users are recommended to use Rootdata, but be aware that its crowd-sourced model may lead to information discrepancies.
(4) Token Unlocks
Focuses on token unlock data queries, covering most mainstream tokens. Free users can only view 7 days of data; large unlocks usually brew a month in advance, and full information requires membership. Chinese media often summarize monthly unlock dynamics for supplementary reference.
(5) Coinmarketcap
The core function is tracking cryptocurrency prices, including data on mainstream token prices, circulation, FDV, etc., and categorizing by sector for easier filtering and research.
(6) Dex Screener
Focuses on real-time prices and candlestick analysis of low-market-cap shitcoins and meme coins, an essential tool for chasing shitcoins.
(7) DefiLlama
A Web3 data aggregator providing on-chain metrics in DeFi, stablecoins, NFTs, etc. Users can query TVL and other data by chain and project to assist investment decisions. Both institutions and retail investors widely use it.
Have you ever thought: who is harvesting your time?
QuestMobile data shows that young people spend an average of about 2.8 hours daily scrolling through short videos (accumulating 1022 hours a year); commuting while checking social media costs 456 hours a year; shopping during lunch breaks takes 300 hours a year… the time killer is often our unconscious selves!
These fragmented times are enough for a novice to transform into a professional trader in three years. For example, last year, a student named Xiao Jia shared that he now earns 100,000 a month.
Second, choice is greater than effort.
Compare two professionals: Zhang San spends an hour each night on Douyin, 40 minutes reading novels, and plays three games; Li Si spends an hour reviewing candlestick charts, 40 minutes listening to trading courses, and writes trading logs. Two years later: Zhang San's gaming rank improves, he gains weight, and may lose 60,000 due to following trades; Li Si establishes a stable trading system, with side income far exceeding his main job.
A student named Liang Liang (pseudonym) uses commuting time to review candlestick charts and tests models during lunch breaks, earning 137% of his annual salary through gold trading in 2024. If you wish to replicate this path, I will share my growth experience and the methodology of the training camp.
Third, Stage 1: Understanding the Market
Spend one month mastering three elements:
Element 1: Candlesticks
(Figure 1: "Basic Section" Assignment No. 3 - Candlestick Basics Assessment)
Candlesticks are a visual tool for price fluctuations. You need to go beyond basic understanding and grasp the logic of line fluctuations behind candlesticks (as shown in Figure 1).
(Figure 2: "Naked Candlestick Section" Assignment No. 2 - Price Behavior Basics Assignment)
Distinguish between trend candlesticks (bullish/bearish) and non-trend candlesticks (as shown in Figure 2). Trend candlesticks indicate breakouts or trend continuations; non-trend candlesticks suggest uncertain direction, and blindly entering can lead to losses.
Element 2: 12 Golden Candlesticks and Signal Candlesticks, Entry Candlesticks
(Figure 3: Horizontal 12 Golden Candlestick Wallpaper)
12 Golden Candlesticks: A summary of 12 high-win-rate candlestick combinations (as shown in Figure 3, high-definition images can be obtained from the public account).
Signal Candlesticks: Indicate entry timing, such as the turning candlestick in the 12 Golden Candlesticks.
Entry Candlesticks: Trigger points for executing trades (as shown in Figure 4), with signal candlesticks being the preparation stage and entry candlesticks being the action stage.
(Figure 4: Bullish Trend Candlestick & Bearish Trend Candlestick & Effective Entry Candlestick)
Element 3: Basic Candlestick Patterns and Structures
You need to answer from the market: Is there currently a trend? What phase is the trend in? What is the following strategy? What is the ambush position? Relying solely on the first two points is insufficient; you need to combine knowledge of patterns and structures.
(Figure 5: Deliberate Practice in the Training Camp: All Price Behavior Patterns)
(Figure 6: Deliberate Practice in the Training Camp: All Price Behavior Patterns)
For example, in price behavior, you need to quickly identify bull flags, bear flags, terminal flags, and types of pullbacks (as shown in Figures 5 and 6), and locate their trend associations.
(Figure 7: Deliberate Practice in the Training Camp: Types of Trends in Chan Theory)
In Chan theory, you need to identify the central area, trend types, and termination methods (as shown in Figure 7) to assess trend value. Just like building a house, single-point skills (like candlestick recognition) need to be combined into a complete system.
At this point, Stage 1 is complete. Enter Stage 2: Deliberate Practice.
Fourth, Stage 2: Deliberate Practice
Transform knowledge into skills through practical exercises.
Step 1: Read Charts
(Figure 8: Deliberate Practice in the Training Camp: Reading Charts Using Chan Theory & Trend Types)
(Figure 9: Deliberate Practice in the Training Camp: Reading Charts Using Price Behavior)
Analyze the market to answer: What is the current market state? What is the trend direction? What is the intervention strategy? (as shown in Figures 8 and 9). Connect the three elements from Stage 1 to draw conclusions.
Step 2: Identify All Trading Opportunities
(Figure 10: Deliberate Practice in the Training Camp: Identify All Opportunities)
(Figure 11: Deliberate Practice in the Training Camp: Identify All Opportunities)
Conduct a retrospective analysis, marking all potential opportunities (as shown in Figures 10 and 11). For example: shorting at the top of an upward wedge in the early stages of a downtrend; shorting in a FB structure during a non-terminal downtrend; going long at the bottom of the trading range in the early stages of an uptrend.
Step 3: Determine Core Trading Types
After practicing on 50-200 charts, summarize preferences (like specific pattern reversals) and high-win-rate models (like high 2 being better than high 1). Gradually form a prototype of a trading system (as shown in Figures 12 and 13).
(Figure 12: Deliberate Practice in the Training Camp: Write Your Own Trading System & Basic Win Rate)
(Figure 13: Deliberate Practice in the Training Camp: Write Your Own Trading System & Basic Win Rate)
Fifth, Stage 3: Real Trading Verification
Once the system is initially formed, test it with 100 yuan in real trading:
- Goal 1: Deliberately incur losses to overcome fear.
- Goal 2: Compare real trading data with retrospective data (like win rate, profit-loss ratio).
Requirements:
- Only trade opportunities within the system.
- Limit to two entries per logic (initial + one "revenge").
Result Analysis:
- If real trading data (like a 40% win rate, 1.3 profit-loss ratio) deviates significantly from retrospective data (70% win rate, 1.8 profit-loss ratio), common issues include: impulsive trading, breaking discipline, adding unverified strategies, or cross-period operations.
- Solution: Technical issues require returning to Stage 2 to iterate the system (integrating new skills) before entering Stage 3 for continuous optimization.
- If data is close (like 70% restoration), it signals success.
This method is based on personal experience and validation from over ten training camp sessions. Those with sufficient budget can seek professional coaches; self-practitioners can achieve a monthly income of 100,000 in a year, reclaiming time sovereignty.
While others spend 30 minutes on bubble tea, some use their phones to verify non-farm payroll fluctuations in gold; while you scramble for low-priced items in live streams, some calculate Bitcoin ETF arbitrage opportunities—this is not competition but a struggle for the pricing power of time.
In 2025, let us use candlesticks as our pen and volatility as our ink to write the path to financial freedom beyond the 8-hour workday.
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