Chuanmu's trading system is a typical representative of 'high risk, high reward.' For newcomers, it is advisable to focus on its risk control discipline and trend judgment methods. The essence of the cryptocurrency market is a 'zero-sum game.' Only by transforming strategies into personalized trading systems and continuously optimizing through review can one achieve compound interest in long-term survival. According to Chuanmu's trading strategy: five practical suggestions for newcomers
1. Strong institutional control coin selection:
Three indicators to lock in potential target liquidity:
Choose mainstream exchanges with daily trading volume > 20 million USD, circulating market value of 20 million - 500 million USD (avoid too small / too large), and trading volume / market value > 0.3 (active funds).
On-chain monitoring: Track the top 15 holding addresses, focusing on those continuously withdrawing coins from exchanges (signals of institutional accumulation).
Fundamentals: Exclude 'zombie coins,' and beware of high-frequency call coins with no substantial benefits.
2. Ironclad risk control rules:
2% stop loss + diversified position single stop loss:
Each trade loss ≤ 2% of the principal (e.g., for a 1000 USD account, single trade stop loss ≤ 20 USD) to guard against black swan events.
Position allocation: Single coin ≤ 20% of funds, combination allocation 60% mainstream coins + 30% altcoins + 10% cash to reduce volatility risk.
Prohibit holding losing positions: If floating losses reach 8%-10%, close positions unconditionally, do not bet on 'bounces.'
3. Timing for building positions:
Use Bitcoin's spike to gradually enter during panic bottom-fishing:
When Bitcoin drops 5%-10%, select altcoins that resist declines (drop < BTC), build positions in 3-5 batches with each batch spaced by 5% drop.
Add to positions with floating profits: After profits exceed 20%, add no more than 50% of the initial position funds, and simultaneously move the stop loss to the cost price.
4. Take profit strategy:
Eat the body of the fish, discard the head and tail for target profit-taking:
Take profits in batches with a 20%-50% gain (e.g., sell 50% of the position at 30% profit).
Dynamic protection: After profits exceed 30%, move the stop loss to the cost price; clear out during reduced volume stagnation / trending hot calls, do not cling to the 'fish tail.'
5. Trend is king:
Moving averages + volume-price for position determination with multi-period resonance:
Weekly chart determines long-term trends, daily chart finds breakouts / pullback points, 4-hour chart confirms entry signals. Volume-price coordination: Increase positions on volume breakouts, reduce on volume divergence; bull market positions 60%-80%, bear market ≤ 20%, follow the trend, do not go against it.
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