I have been trading cryptocurrencies for 10 years, professionally for 6 years, born in 1990, I have reached a stage of doing as I please. From 500,000 to 25,540,000, all because I strictly adhere to these disciplines and valuable insights.
What truly changed my fate was one day four years ago! Since then, I've reclaimed everything I lost!
1. Timing: Enter the market when the conditions for rolling positions are met.
2. Open position: Follow the signals from technical analysis and find the right moment to enter the market.
3. Add to position: If the market moves in your direction, gradually increase your position.
4. Reduce positions: When you've earned the predetermined profit, or when the market seems a bit off, sell slowly.
5. Close position: When you reach your target price, or when the market obviously changes, sell everything.
Add more after making a profit: If your investment has risen, consider adding more, but the premise is that the cost has come down and the risk is low. Not every time you make a profit should you add, but at the right time, such as at breakout points in a trend, add when it breaks out quickly, or add during a pullback.
Base position + T: Divide your assets into two parts, one part remains untouched as a base position, and the other part trades during market price fluctuations to reduce costs and increase returns. There are several ways to divide it.
1. Half-position rolling: Hold half of the funds long-term, and trade the other half during price fluctuations.
2. Thirty percent base position: Hold thirty percent of the funds long-term, and trade the remaining seventy percent during price fluctuations.
3. Seventy percent base position: Hold seventy percent of the funds long-term, and trade the remaining thirty percent during price fluctuations.
The purpose of doing this is to maintain a certain position while using the market's short-term fluctuations to adjust costs, optimizing the position.
In position management, first, you must diversify risks; do not put all your funds into one trade. You can divide the funds into three to four parts, using only one part for each trade. For example, if you have 40,000, divide it into four parts, using only 10,000 for each trade.
My cryptocurrency trading system on cycles and sequences.
1. Cycle refers to the time cycle. Generally divided into 1 minute, 5 minutes, 15 minutes, 30 minutes, 60 minutes, 4 hours, daily, weekly, monthly, yearly... I seem to have mentioned before that the vast majority of indicators and strategies apply to different cycles. Why track and study different time cycles? It is to clarify what is happening in the current market, the macro environment, micro environment, and what kind of events are unfolding.
2. I believe that tracking and studying time cycles is most significant because, in many cases, low points will accompany the triggering of a buying point in a smaller cycle.
For example, sometimes the structure at the daily level hasn’t formed, but the 60-minute structure has. 'Structure' has position weight, and obviously, this 60-minute structure can also be operational. But if you don't track and study the current structure of each cycle, you might easily miss it.
3. The situation we most want to see is: at a certain moment, structures appear across all cycles. This is called 'cycle resonance,' which is an exciting sign and has a much higher success rate and strength compared to a single cycle triggering a structure. But this situation is rare and hard to come by. The strength of market reversal corresponding to large cycle structures is significant, while that of small cycle structures is minor. The trends and structural conditions under different cycles constitute the basis for buying and selling.
4. As mentioned before, 'structure' is a left-side indicator and must be used in conjunction with trends; using it alone is not very meaningful.
'Structure' has the greatest significance in: leveraging the strength generated by the structure to assist K-line breakthroughs of the trend.
So is the term 'relay' more appropriate? The problem is that the triggering frequency of structures in larger cycles like the daily level is too low; at this time, it’s necessary to find opportunities from smaller cycles, even though the strength and impact time of small cycles are not as great as those of large cycles.
5. If the price is very close to the trend, then any structure formed in any cycle may ultimately lead to a breakthrough in the trend; what if the price is a bit far from the trend?
The structure of a small cycle may ultimately not form a breakthrough, but the structure of a large cycle can; if the price is particularly far from the trend? It’s possible that no cycle structure can form a breakthrough. However, the emergence of 'structure' is the standard for buying, and one has to buy. How to break through?
6. For this relatively complex issue, my answer is: refined position management.
'Simplify complicated matters, standardize simple matters, and process standardized matters.'
What is simplification? It is to list possible situations one by one.
What is standardization? It means creating response rules for each simple situation.
What is process-oriented? It means that when encountering a certain situation, you unconditionally follow the rules like a robot.
7. 'Position management' will be discussed in detail in later chapters. If there is one thing that exists in this 2.0 trading system that has not been precisely quantified, it is the judgment standard for how 'close' the price is to the trend. This judgment is quite simple for me, but I also want to quantify this thing as much as possible; however, it is indeed difficult due to differences in trading markets and trading experiences. There’s no need to worry; even if it can’t be done precisely, it won’t significantly impact the results.
8. Regarding the choice of time cycles, it depends on personal preference and actual situation. Including someone asked about how to choose the cycle for drawing lines the day before, it’s the same issue. Generally, I use daily as the main cycle, with smaller level cycles for assistance, usually not considering cycles below 30 minutes, so I don't have to expend too much energy daily. This combination of cycles only requires occasional checking; sometimes it’s fine not to check for several days, just focus on the market at special nodes.
9. If trading cryptocurrencies is a side job and you have no time to monitor the market, choose weekly or even monthly as the main cycle for long-term positions, using daily and other smaller-level cycles for assistance, possibly not needing to trade even once a year.
If using minute-level as the main cycle, such as 30 minutes, 15 minutes, or 5 minutes, then it is ultra-short-term, requiring continuous monitoring, and the execution requirement for trading is higher, suitable for professional players. I occasionally play when my energy allows.
10. Sequence is a headache. In the years of trading cryptocurrencies, I still haven't spent time and energy to optimize this indicator. Although 'sequence' performs excellently in the stock market, I haven’t assigned it any weight in positions. This means that no matter how accurate it is, it cannot guide any position's buying and selling operations based on its trigger standards because, apart from not forming a trading closed loop, it also has a fatal flaw: it performs poorly in unidirectional markets.
11. Specifically, 'sequence' performs poorly in unidirectional markets due to logical flaws in its programming design. Once it fails, it will make mistakes of selling too early or buying too early, and its correction mechanism lacks statistical probability advantages.
This is a major taboo in trend investing and cannot be tolerated. Here, I don't want to discuss 'sequence' too much because: its transplant to the cryptocurrency market has led to an overall disappointing success rate; optimization needs to be worked on.
12. If optimized well, it can achieve an accuracy rate similar to that in the stock market, making it a good helper for 'structure.'
Its greatest significance lies in assisting in judging the formation of structures. Especially in a dull state, if a 'sequence' trigger signal appears, the probability of structure formation increases significantly. I probably lack the motivation to spend more time optimizing it; its absence doesn't significantly impact the overall trading system. Interested friends can try it.
Cryptocurrency trading mantra:
Buy more on a big drop in the morning, sell less on a big rise in the morning.
Sell less on a big rise in the afternoon, buy on a big drop the next day.
Do not sell coins when they drop in the morning, add to the position at low points T+0.
Do not chase up on a rise in the afternoon, sell high during T+1.
In the morning, look for a rise at ten o'clock, in the afternoon look for a rise at two o'clock, sell at the highest point. If the coin is strong, seal at ten o'clock, if not, seal at two o'clock, control the position without being complacent; rolling operations are the best strategy.
Do not make short trades in a bull market, do not make long trades in a bear market.
Do not kill the market in a bull market, do not chase up in a bear market.
If it drops all day during the day, foreigners will pull it back at night.
Do not chase high on a big rise in the morning; it's just deceiving the Chinese to get up and take the bait.
Do not bottom fish on a big drop in the morning; it's just deceiving the Chinese to panic and sell.
To bottom fish, insert a long needle; injections are for healing and promote growth.
Before major meetings, prices must rise; as the meeting approaches, they must fall.
