By Miles Deutscher Compiled by AididiaoJP, Foresight News I've been in the cryptocurrency market for over six years. I've made and lost millions, founded crypto projects, and frankly, experienced every emotional rollercoaster imaginable in this space. My goal in this article is simple: to unpack 12 hard-earned lessons I learned that cost me millions of dollars. By reading this and applying these lessons to your own crypto journey, I hope you can become a better trader, save yourself from massive drawdowns, and increase your chances of changing your life through cryptocurrency. Part 1: Basics Lesson 1: The power of niche focus There are many ways to make money in the cryptocurrency market; your task is to find the one that suits you best and become an expert in that niche. I have been diving deep into DeFi in 2020 and 2021. I have been mining on multiple chains, exploring various DeFi ecosystems, and running recycling/governance strategies. This taught me a lot about the field: from risk management and position sizing to game theory and the flywheel effect. If I was doing contract trading, on-chain sniping, airdrop farming, etc. at the same time, I doubt I would be able to accumulate the current knowledge. In crypto, it’s better to be an expert in one area than a jack of all trades. Lesson 2: Advantage is everything The best cryptocurrency traders I know have clearly defined their edge and focus 99% of their energy on getting the best results from it. Your strengths may be speed, precision, patience, risk management, networking, or a combination of these, but you need a differentiator. Your market advantage depends largely on your personality, existing skill set, time in the field, and a number of other variables. Define your strengths, master them, and execute. Lesson 3: Only engage with what you understand If you don't understand something, don't buy it until you understand it. Many people buy tokens due to hype or FOMO without truly understanding the project or its business model. Never invest in something you don't truly understand. In the cryptocurrency market, if you don’t have a well-established logic/strong underlying belief, it will be difficult for you to withstand its volatility. Lesson 4: Narrative > Fundamentals Cash flow determines everything. Narratives always run ahead of fundamentals. You might research a project with the best team, the best business model, etc., but if there’s no community, no narrative, no money flowing into the space, none of that matters. On the contrary, a large number of tokens and sectors with "bad" fundamentals have seen their prices skyrocket due to the attention they have received. Study the hype, study the community, study the narrative, this is an attention economy. Part II: Execution Lesson 5: The market punishes traders who don't have a plan Always trade with a plan and don't enter the market blindly. Define whether this is a long-term hold or a short-term trade. Before entering a trade, define your take-profit zones and invalidation points (both technical and fundamental). Trading without a plan is planning to go bankrupt. In cryptocurrency, managing drawdown is key to long-term survival. Lesson 6: Position Sizing This is probably the number one problem retail traders screw up on. You may pick the right coin at the right time, but if you don’t size your entry position correctly, it means nothing. Conversely, you might pick the wrong coin at the wrong time, which can be devastating to your overall portfolio if you’re overweight. Depending on your risk tolerance and portfolio size, you should set a percentage of your capital to risk per trade (and this percentage should be determined by pre-set criteria: e.g., conviction level, market conditions, market capitalization, liquidity, etc.). Lesson 7: Let the winners run, cut the losers I keep seeing this error. People will sell strong coins and switch to less mature ones in an attempt to catch up trades. You should keep your winners running as long as possible and cut your losers as quickly as possible. Cryptocurrency trading is all about momentum; riding the wave for as long as possible and avoiding being caught in it. Part III: Mastering Portfolio Management Lesson 8: Tool Selection Depending on where you are in your journey, you’ll use different tools to achieve your goals. The tools I used to make my first $10,000 in crypto are completely different from the tools I use now to manage millions of dollars. Smaller capital can actually be an advantage, as it allows for trading in less liquid tokens. There are so many opportunities for dislocation to exploit. For large whales, playing these games simply isn't worth it, but you can. Some examples include: airdrop farming, arbitrage, on-chain low-market cap tokens, etc. Lesson 9: Focus, don't distract To preserve wealth, diversification makes sense. But to succeed, over-diversification can do more harm than good. I strongly recommend that most people only hold 5-10 positions as their core portfolio. This will ensure you have enough time to manage these positions, stay informed, and adjust them regularly. A bloated portfolio will slow down your responsiveness. During market bubbles, you can go beyond this range to take advantage of opportunities, but what you really need is a core portfolio of 5-10 high-conviction stocks. I break this rule with my "degenerate" portfolio, but it only makes up 10-20% of my total portfolio. If you want to cast a wide net and try your luck, do it in an isolated environment and focus the majority of your money on high-conviction plays. Lesson 10: From Altcoins to Bitcoin Remember: your goal is to accumulate Bitcoin. Use altcoins as a source of profit and then accumulate Bitcoin. You will then start to approach your trades differently (e.g. charting Bitcoin, analyzing risk factors relative to Bitcoin, analyzing macro trends affecting Bitcoin and therefore altcoins). This is an extremely powerful mindset that alone can significantly improve your risk management. Lesson 11: Sell on the rise and lock in profits. In the last cycle, I re-gambled a lot of my profits, simply because there were stablecoins on exchanges and I would keep gambling with them. My framework should look like this: Step 1: In a bull market where altcoins are surging, always take profits. Step 2: Convert the stablecoin back to fiat to “lock in” the gains. Alternatively, withdraw to a hard-to-access cold wallet, which will prevent excessive trading. Part 4: Modern Recipes Lesson 12: Let AI do the heavy lifting You should document your entire crypto journey to gather data about yourself and make improvements. You can do this through posting on X, using MCP integration with the Notion database, a private Google Doc, or whatever works for you. After recording and collecting data, share it with AI to help discover blind spots in your strengths. Not using a record + AI system puts you at a huge disadvantage, and since crypto is a zero-sum game, you really need to fight for every inch of advantage.By Miles Deutscher Compiled by AididiaoJP, Foresight News I've been in the cryptocurrency market for over six years. I've made and lost millions, founded crypto projects, and frankly, experienced every emotional rollercoaster imaginable in this space. My goal in this article is simple: to unpack 12 hard-earned lessons I learned that cost me millions of dollars. By reading this and applying these lessons to your own crypto journey, I hope you can become a better trader, save yourself from massive drawdowns, and increase your chances of changing your life through cryptocurrency. Part 1: Basics Lesson 1: The power of niche focus There are many ways to make money in the cryptocurrency market; your task is to find the one that suits you best and become an expert in that niche. I have been diving deep into DeFi in 2020 and 2021. I have been mining on multiple chains, exploring various DeFi ecosystems, and running recycling/governance strategies. This taught me a lot about the field: from risk management and position sizing to game theory and the flywheel effect. If I was doing contract trading, on-chain sniping, airdrop farming, etc. at the same time, I doubt I would be able to accumulate the current knowledge. In crypto, it’s better to be an expert in one area than a jack of all trades. Lesson 2: Advantage is everything The best cryptocurrency traders I know have clearly defined their edge and focus 99% of their energy on getting the best results from it. Your strengths may be speed, precision, patience, risk management, networking, or a combination of these, but you need a differentiator. Your market advantage depends largely on your personality, existing skill set, time in the field, and a number of other variables. Define your strengths, master them, and execute. Lesson 3: Only engage with what you understand If you don't understand something, don't buy it until you understand it. Many people buy tokens due to hype or FOMO without truly understanding the project or its business model. Never invest in something you don't truly understand. In the cryptocurrency market, if you don’t have a well-established logic/strong underlying belief, it will be difficult for you to withstand its volatility. Lesson 4: Narrative > Fundamentals Cash flow determines everything. Narratives always run ahead of fundamentals. You might research a project with the best team, the best business model, etc., but if there’s no community, no narrative, no money flowing into the space, none of that matters. On the contrary, a large number of tokens and sectors with "bad" fundamentals have seen their prices skyrocket due to the attention they have received. Study the hype, study the community, study the narrative, this is an attention economy. Part II: Execution Lesson 5: The market punishes traders who don't have a plan Always trade with a plan and don't enter the market blindly. Define whether this is a long-term hold or a short-term trade. Before entering a trade, define your take-profit zones and invalidation points (both technical and fundamental). Trading without a plan is planning to go bankrupt. In cryptocurrency, managing drawdown is key to long-term survival. Lesson 6: Position Sizing This is probably the number one problem retail traders screw up on. You may pick the right coin at the right time, but if you don’t size your entry position correctly, it means nothing. Conversely, you might pick the wrong coin at the wrong time, which can be devastating to your overall portfolio if you’re overweight. Depending on your risk tolerance and portfolio size, you should set a percentage of your capital to risk per trade (and this percentage should be determined by pre-set criteria: e.g., conviction level, market conditions, market capitalization, liquidity, etc.). Lesson 7: Let the winners run, cut the losers I keep seeing this error. People will sell strong coins and switch to less mature ones in an attempt to catch up trades. You should keep your winners running as long as possible and cut your losers as quickly as possible. Cryptocurrency trading is all about momentum; riding the wave for as long as possible and avoiding being caught in it. Part III: Mastering Portfolio Management Lesson 8: Tool Selection Depending on where you are in your journey, you’ll use different tools to achieve your goals. The tools I used to make my first $10,000 in crypto are completely different from the tools I use now to manage millions of dollars. Smaller capital can actually be an advantage, as it allows for trading in less liquid tokens. There are so many opportunities for dislocation to exploit. For large whales, playing these games simply isn't worth it, but you can. Some examples include: airdrop farming, arbitrage, on-chain low-market cap tokens, etc. Lesson 9: Focus, don't distract To preserve wealth, diversification makes sense. But to succeed, over-diversification can do more harm than good. I strongly recommend that most people only hold 5-10 positions as their core portfolio. This will ensure you have enough time to manage these positions, stay informed, and adjust them regularly. A bloated portfolio will slow down your responsiveness. During market bubbles, you can go beyond this range to take advantage of opportunities, but what you really need is a core portfolio of 5-10 high-conviction stocks. I break this rule with my "degenerate" portfolio, but it only makes up 10-20% of my total portfolio. If you want to cast a wide net and try your luck, do it in an isolated environment and focus the majority of your money on high-conviction plays. Lesson 10: From Altcoins to Bitcoin Remember: your goal is to accumulate Bitcoin. Use altcoins as a source of profit and then accumulate Bitcoin. You will then start to approach your trades differently (e.g. charting Bitcoin, analyzing risk factors relative to Bitcoin, analyzing macro trends affecting Bitcoin and therefore altcoins). This is an extremely powerful mindset that alone can significantly improve your risk management. Lesson 11: Sell on the rise and lock in profits. In the last cycle, I re-gambled a lot of my profits, simply because there were stablecoins on exchanges and I would keep gambling with them. My framework should look like this: Step 1: In a bull market where altcoins are surging, always take profits. Step 2: Convert the stablecoin back to fiat to “lock in” the gains. Alternatively, withdraw to a hard-to-access cold wallet, which will prevent excessive trading. Part 4: Modern Recipes Lesson 12: Let AI do the heavy lifting You should document your entire crypto journey to gather data about yourself and make improvements. You can do this through posting on X, using MCP integration with the Notion database, a private Google Doc, or whatever works for you. After recording and collecting data, share it with AI to help discover blind spots in your strengths. Not using a record + AI system puts you at a huge disadvantage, and since crypto is a zero-sum game, you really need to fight for every inch of advantage.