After seven years of trading cryptocurrencies, I initially lost over 100 in the first three years, but made back a few hundred in the following years. Every penny earned carries with it a lesson learned through blood and tears!
This market is always repeating the same secret: 90% of retail traders focus on news to trade cryptocurrencies, 9% of smart people watch the movements of the market makers, while 1% of aggressive players are dissecting market genes using daily moving averages.
Step One: Verify the legitimacy of the moving averages. Treat the daily moving averages as three distinctly characterized old Chinese doctors— the 5-day line is the head of the emergency department, the 30-day line is a master of internal medicine, and the 60-day line is like a grand master sitting in the specialist clinic. When the head of the emergency department suddenly perks up and rushes to check on the two senior doctors (the 5-day line crossing above the 30/60-day lines), it signals that the market is preparing to enter the ICU for rescue. Conversely, if the head of the emergency department slips and rolls off the grand master's chair (the 5-day line crossing below the 30/60-day lines), don’t hesitate; immediately adjust your position.
Step Two: Establish a trading system to prevent impulsive decisions.
Please stick a note on your trading interface, written in bold marker: "Moving Averages Clash, Ordinary People Stand Down." When the 5-day moving average and the 30-day moving average are entangled like a twisted dough, rushing into the market is roughly equivalent to rolling dice and guessing odd or even. A true hunter only pulls the trigger when three lines are marching in the same direction.
Here's a counterintuitive cold fact: In the cryptocurrency market where wild fluctuations are common, the simpler the daily moving average strategy, the more lethal it becomes. Just like a true martial arts master dueling, there’s no need to show fifty opening moves; a breakthrough in the 5-day moving average signals drawing the sword, while a turn in the 60-day moving average signals sheathing it.
Step Three: Weld discipline onto the trading platform.
I've seen too many people write their trading plans on napkins, only to tear them up in fear from a sudden market fluctuation at midnight. The most brutal yet merciful aspect of the daily moving average strategy is that it forces you to become an emotionless signal execution machine.
Here's a piece of dark humor: A trader who used the daily moving average strategy to make stable profits for three years received a warning about a break in the 5-day line at his wedding. He had to hide in the restroom to close his positions before coming out to exchange rings. Afterwards, his bride pulled his ear and scolded him, but after seeing the account balance, she silently bought him a high-end monitor.
(Carve this sentence into your mind: You may doubt your own operations, but never doubt the moving averages that have formed a consensus.)
If you want to make money, don’t be a lone warrior. Follow me.