In a year of trading cryptocurrencies, I lost over 100 in the first 3 years, but made back several hundreds in the following years. Every penny behind it is 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 focus on the movements of the market makers, while 1% of aggressive players are dissecting the market genes using daily moving averages.
Step 1: Verify the identity of the moving averages
Treat the daily moving averages as three distinct old Chinese medicine practitioners: the 5-day line is the head of the emergency department, the 30-day line is the internal medicine expert, and the 60-day line is sitting comfortably in an armchair in the specialist clinic. When the head of the emergency department suddenly perks up and rushes to check the two senior doctors (5-day line crossing above the 30/60-day lines), this signals that the market is about to enter ICU for rescue. Conversely, if the head of the emergency department is slipping and rolling down from the specialist clinic’s armchair (5-day line crossing below the 30/60-day lines), don’t hesitate, adjust your positions immediately.
Step 2: Establish a trading system to prevent impulsive decisions
Now please stick a note on your trading interface, and write in bold with a marker: When moving averages clash, mortals retreat. When the 5-day line and the 30-day line twist and tangle like a twisted dough, jumping into the market is akin to rolling dice to guess odd or even. A true hunter only pulls the trigger when all three lines march in the same direction.
Here’s a counterintuitive fact: In the cryptocurrency world where wild price fluctuations are commonplace, the simpler the daily moving average strategy, the deadlier it is. Just like a true martial arts master doesn't need to show fifty stances in a duel, a 5-day line breakthrough is the signal to draw the sword, while a 60-day line turning is the moment to sheath it.
Step 3: Weld discipline to the trading platform
I have seen too many people write their trading plans on napkins, only to tear them up in the middle of the night when scared by a sudden market spike, wiping cold sweat. The most ruthless yet merciful aspect of daily moving average strategies is that it forces you to become an emotionless signal execution machine.
Here's a dark humor: A trader who stabilized profits using daily moving average strategies for three years received a 5-day line breakout alert at his wedding. He actually hid in the bathroom to close his positions before coming out to exchange rings. Later, his bride pulled his ear and scolded him, but after seeing the account balance, she silently got him a high-end monitor.
(Carve this sentence in your mind: You can doubt your own operations, but never doubt the moving averages that have formed a consensus)
