The Bit King should be the strongest trader in the ancient cryptocurrency world. He turned a $1,500 account into $23.97 million, equivalent to over 170 million yuan. No one has been able to achieve this level since🧐😍
He rarely shares his strategies and methods, but some insights can still be gleaned from early interviews and Weibo posts during the golden age. Though few, they are very useful~ He said that his first ten million took the longest and was the most painful. During this time, his trading system was constantly reshaped and polished, taking him a full year and a half. The second ten million took three months, the third ten million only took forty days, the fourth ten million took 5 days, and the remaining 75% of the funds were earned in the last six months. This process is what Buffett referred to as compound interest, very magical! Just like that, through compounding, one day in 2022, he quietly succeeded~ The Bit King’s popularity should far exceed that of contemporaries like Fatty and Banmu Xia, as over a hundred thousand people daily want to know whether the Bit King is long or short; he was the guiding light at that time!!
The first point is to determine the trading level. For example, in a 2-hour K-line chart, each arrow can represent a segment of hourly trend!! Once the level is determined, the trading strategy has a foundation. If the level is too small, short positions should be taken, as holding longer can easily lead to profit retracement~ In larger levels, the stop loss and take profit should be appropriately relaxed, and one should be prepared for long-term holdings. Some people take short positions for long and long positions for short; such principle-less holdings are very dangerous!
The second point is to determine the trading pattern. If the market seems unclear, one can wait for the pattern to appear. The Bit King particularly recommends three K-line patterns with a higher win rate!! The first is the bullish and bearish triangle patterns. These patterns are a consolidation process in K-lines and can be seen as the result of the struggle between bulls and bears on the battlefield~ A bullish triangle can be understood as the air force gradually retreating during the struggle, while a bearish triangle indicates an advantage for the air force!
Then there is the consolidation bottom formation. This formation appears during a significant downtrend and represents a consolidation trend where the second rebound at point B surpasses point A, and the second decline at point D does not surpass point C, creating higher highs and higher lows, which usually indicates a high probability of reversal at the bottom!! Conversely, if point B is lower than point A, it is likely a continuation of the downtrend, and further declines may continue~
Finally, we can observe the bottom formation by combining the slope of the decline and trading volume. Generally speaking, whether in an uptrend or downtrend, a decrease in trading volume indicates the exhaustion of bulls or bears!! A slowing down of the decline slope means the downward momentum is gradually weakening; a gradual decrease in trading volume indicates that the selling funds are also decreasing, which is also a form of bottom formation~
The third point is about opening positions and adding to positions. There are two scenarios for opening positions: one is when you are not very certain and observe the market, then open in batches within a relatively small range, which does not involve adding positions!! The other is when there is high certainty, opening fully at once. If the market meets expectations, you hold on to it~ Adding positions is generally only considered in larger trend markets. If finding turning points in the market involves some luck, adding positions is purely a technical skill/ When to add and how much to add must be done with caution. If you are unsure, it is better not to add. Adding the wrong position can significantly affect your mindset. It is important to note that positions should only be added when there is a floating profit, generally not exceeding the base position by 1 time, and the added portion must also have a stop loss set! Do not add positions when in loss, otherwise one time will result in heavy losses!!
The fourth point is to set stop losses and take profits. If the market does not go as expected, one must decisively stop loss, hedge or take profit and wait for the next opportunity!! We often encounter trades that could make a profit of five or even ten points but exit at the break-even point. Sometimes, a profitable trade that lasted a month is stopped out by a roller-coaster market, especially in narrow fluctuations with no clear direction; continuous stop losses can be devastating~ The Bit King often faces the issue of being continuously stopped out. His method is that after the first stop loss, if he enters again, he will increase the position slightly from the original basis. For example, if the first position of 30% was stopped out, the second time he will use 32% to enter, and after being stopped out again, the third time he will use 35%/ The benefit of this is that if the following trades are correct, he can recover the previous losses from stop losses. However, if the third time is also stopped out, he must unconditionally take a break. He has experienced several significant drawdowns in his actual trading, but he can laugh to the end, precisely because he is decisive in cutting losses when the market is wrong! It is much better to feel the pain of a stop loss once than to endure the continuous pain of floating losses, so he places stop losses as the top priority. Before opening a position, he first considers how far the stop loss is, whether the range of the stop loss is within his tolerance, and then he considers the take profit~
The Bit King often uses three methods for taking profits: one-time profit-taking, phased profit-taking, and hedging!! When encountering a trend that does not meet expectations or reaches the take profit position as expected, he will choose to take all profits at once; if there is an abnormal trend during market development, he can choose phased profit-taking or hedging, where the take profit position can be judged based on resistance and support or various indicators~ The profit-loss ratio for taking profits and stop losses must be high. For small funds wanting to grow, the best method is to use money that can afford to lose, patiently waiting for opportunities with large profit-loss ratios. He believes this ratio should be at least 10:1 or more!!
The fifth point is position size and leverage. When dealing with different market conditions, the size of the position should also vary!! When encountering a market that particularly aligns with one's trading system, the position should be larger. In a significant market, one should dare to operate with heavy positions because significant opportunities are rare. As long as you seize one, your capital level could increase by one level~ The Bit King went from 10,000 to 170 million through this process!
The sixth point is the trading mindset. The Bit King summarizes that the main reason for significant drawdowns is a restless mindset!! Restlessness refers to blindly gaining confidence after substantial profits, which leads to failure. Impatience refers to the mindset collapsing after consecutive stop losses; at this point, opening a position is no longer rational~ This is a lifelong course of cultivation!
The seventh point is to review trades. The importance of reviewing trades is self-evident. The essence of the secondary market is trading, which truly reflects human greed and fear!! There are no shortcuts in trading, only repeated practice!
