I have been in the cryptocurrency market for ten years. Six years ago, I quit my job to trade cryptocurrencies. The real change for me came five years ago on a night when an old senior's words woke me up and helped me understand the eight major periods every cryptocurrency investor must go through, allowing me to reflect on myself and finally regain what I lost!
Perhaps in the eyes of some people, retail investors are always the lambs waiting to be slaughtered!
If you are ready to enter the cryptocurrency market, I sincerely hope this article can help you. As someone with decent summarizing skills and expression, I believe some of my thoughts might be of help to you. Alright, without further ado, let's get straight to the point~
When it’s hard to make a selling decision in cryptocurrency trading, ask yourself: If your analysis is correct, then why is the market moving in the opposite direction? The only reason is that you are wrong because the market does not make mistakes!
A trick to go from 500,000 to 10 million! This set of the simplest cryptocurrency trading methods, 11 trading insights that everyone can use.
Practical Tips: 1. Observe after high and low consolidations. When the market is in a high or low consolidation phase, observing is a more cautious strategy. The appearance of consolidation often precedes a market change, as the market digests previous fluctuations and will ultimately choose a clear direction. At this time, acting rashly may lead to unnecessary losses. Waiting for the situation to clarify and then acting in accordance with the trend is the rational approach. Seniors have repeatedly reminded, 'During consolidation, observation is more valuable than blind trading.'
2. Don’t cling to hot positions, adjust positions according to the market. In short-term trading, hot positions are often the result of speculation. Once the heat dissipates, funds will quickly exit, leaving investors who remain in a passive situation. Therefore, seniors suggest not to cling to hot positions for too long, but to adjust flexibly and maintain mobility. As he said, 'Short-term hot positions come quickly and leave quickly, and a slight misstep can lead to chasing highs and cutting losses. Successful short-term trading is not about blindly following trends, but maintaining clarity at all times, ensuring that 'from start to finish, it ultimately ends up empty.'
3. Uptrend with a gap high open, holding positions requires firmness. If in an uptrend, a K-line appears with a gap high open bullish candle accompanied by increased volume, it indicates that the market has entered an accelerated upward phase. At this point, one should remain calm and firmly hold positions, as this situation often leads to a significant price increase. Seniors refer to this as the 'acceleration period,' emphasizing the need for firm belief during this stage, not to be affected by short-term fluctuations, so as to gain substantial profits.
4. A significant bullish candle requires a decisive exit. Regardless of whether the market is at a high or low, the appearance of a significant bullish candle is a signal to exit. In this case, even if you see a limit up, you should decisively close your position, as in most cases, a pullback will occur after a significant bullish candle. Seniors tell us, 'No matter how tempting the profit, taking it while it's good and decisively closing your position is the key to avoiding profit withdrawal.' The core of this strategy lies in 'knowing when to enter and exit,' and under any circumstances, one should guard against risks and control profit pullbacks.
5. Buy on bearish candles above moving averages and sell on bullish candles below moving averages. The moving average is one of the key references for short-term operations. If the stock price is above an important moving average and there is a bearish candle pullback, it is a suitable buying signal; conversely, a bullish candle below the moving average may indicate weakness in the upward movement, suitable for selling. In short-term investments, generally only daily moving averages or attack lines should be considered, and one should not drag their feet, with holding time not exceeding too long. Seniors remind, 'No more than a week, take action within three days; if the opportunity is missed, do not linger.' Short-term trading emphasizes speed and precision, and prolonged holding increases risk.
6. Don’t sell on high spikes, don’t buy on steep drops, and remain still during sideways movement. In the cryptocurrency market, where the market fluctuates frequently, this principle is seen as a basic survival rule. If the current price is not significantly higher than the buying price, one should not sell easily; conversely, if there is no significant drop, do not rush to buy. When the market is in a sideways state, observing is a more prudent approach. Seniors call this 'stability first,' and any rash trading may lead to losses. Long-term profits rely not on frequent entries and exits, but on reasonable timing for entry and exit.
7. Better to enter less than to enter more, act according to your ability. In the cryptocurrency market, ensuring flexibility is key. Even with great confidence, one should not invest a large amount of funds all at once; reasonable position distribution is especially important. Seniors remind us, 'Better to enter less than to be greedy,' because the market may experience unexpected fluctuations at any time, and diversifying funds can reduce the risk of a single investment. For every trade, a reasonable position ratio should be formulated to avoid being caught off guard by sudden market movements.
8. Learn to interpret market news. In the cryptocurrency market, the influence of news cannot be underestimated. Market news often directly triggers significant price fluctuations, which can be a major rise or a major fall, so investors should learn to interpret market information, especially significant events and policies. Seniors suggest that beginners should primarily observe when encountering major news, as excessive intervention may lead to unnecessary losses.
9. Master technical indicators. Technical analysis plays an important role in the cryptocurrency market. Seniors suggest that beginners should systematically learn technical indicators, formulate a learning plan, and master analysis tools such as moving averages, KDJ, Bollinger Bands, candlestick patterns, volume-price relationships, and capital flow. Technical analysis requires a long period of accumulation and cannot be achieved overnight. Mastering technical analysis can help investors identify buying and selling points, reducing unnecessary losses.
10. Formulate a trading plan to avoid frequent trading. Frequent trading not only incurs high transaction fees but also disrupts trading mindset, leading to emotional decisions. Seniors emphasize that 'trading needs to be planned, and one should not act blindly.' In the cryptocurrency market, frequent entries and exits often mean greater uncertainty. An effective trading plan can help investors maintain rationality and clarity of thought.
11. Proper risk control, set stop-loss and take-profit points. Before each trade, reasonable stop-loss and take-profit points should be set to keep risks within acceptable limits. Upon reaching stop-loss or take-profit points, one should decisively exit rather than greedily pursue further profits. The price fluctuations in the cryptocurrency market are severe, and the experience of seniors tells us that 'reasonable stop-loss and take-profit are the keys to successful trading.' Even experienced investors cannot accurately predict the market, hence, comprehensive risk control measures are essential for every investor.
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