Long-term trading in the market means holding digital currencies for a long time, while trading cryptocurrencies refers to buying and selling digital currencies. The main reasons for the frequent failures in the cryptocurrency circle are threefold (short-term trading is silver). As more and more newcomers in the cryptocurrency space start investing in virtual currencies.
Short-term and long-term stocks. Trading cryptocurrencies primarily involves buying and selling digital currencies; the vast majority prefer trading cryptocurrencies rather than holding them. The cryptocurrency space is not that large.
This is the most practical knowledge, very useful. The low retracement points are often the medium and short-term entry points for moderate buying. Making 'ultra-short-term' trades is the second tactic in short-term stock trading.
If you are new to the cryptocurrency space, some players engage in ultra-short-term trading; the investment methods for trading cryptocurrencies can be divided into two types. SAR and others serve as relatively accurate short-term indicators. The best way to do short-term trading is to base it on a bullish long-term trend in stocks.
In the small cryptocurrency circle, short-term trading requires catching the leading stocks. Consider the sunny investment strategy + short-term secrets: buy a set of Xu Wenming's (short-term gold) series of books.
Which strategy is the most practical in the cryptocurrency space? The risks in the cryptocurrency circle are quite significant, and it could change in just a day! For beginners, it’s best not to participate in trading cryptocurrencies.
Frequent short-term trades in the stock market can lead to scrutiny if the amount is too large. Therefore, if you want to engage in short-term trading, you must have good guidelines to assist you. It is said that one day in the cryptocurrency space equals a year in the stock market, so avoid participating in cryptocurrency trading.
For first-time cryptocurrency traders, it is mainly focused on short-term operations. If you are a short-term trader, these are practical tools I often use, and there are many methods for short-term trading.
Avoid borrowing money or taking loans to trade cryptocurrencies. The speed at which the cryptocurrency market can turn bullish is unmatched, and most people prefer short-term trading over long-term investments. Use 'MACD low-level secondary golden cross' to find stocks for short-term surges, along with short-term and long-term trading strategies.
The closing price near a doji candlestick is an excellent entry point for short-term trades. The KDJ indicator is known as the king of short-term trading.
Knowledge of cryptocurrency trading techniques:
Let me share my experience.
Observe technical patterns: First, look at the monthly and weekly charts. If they are in a clear downward trend, don’t rush to buy. For horizontal oscillations in weekly and monthly charts, keep observing. If the bottoms continue to rise, that’s even better; the buying opportunity will be close. If it's an upward trend, find an opportunity to buy on daily line pullbacks.
Secondly, examine daily line patterns, and do not buy in a downward trend. When the bottoms keep rising, choose to buy at the low points in oscillations. This is a left-side buy that may require patience and can be taxing. If the daily line breaks out into an upward trend, find the breakout pullback or wait for the daily line to retrace to EMA 10 or 20 before buying, which is a right-side buying point.
The third point is to look at the short cycles of 4 hours and 1 hour; a retracement to EMA 10 or 20 is a buying point.
Weekly, daily, 4-hour, 1-hour charts, from large cycles to medium cycles to small cycles. The main chart selects EMA 5-10-20-60.
Short-term cryptocurrency trading involves looking at K-line charts for various minutes.
The best K-line chart observation time for short-term trading in the cryptocurrency space depends on trading strategies: for quick decisions, the 5-minute K-line chart captures short-term trend changes; for mid-term trends and support-resistance levels, the 15-minute K-line chart provides a broader perspective; for long-term short-term opportunities, the 30-minute K-line chart filters out short-term noise and shows clear trends.
Short-term operations in the cryptocurrency space: the best K-line chart observation time.
When engaging in short-term trading in the cryptocurrency space, selecting the appropriate K-line chart observation time is crucial. Based on experience, the best observation times are as follows:
1. 5-minute K-line chart
The 5-minute K-line chart can capture changes in short-term market trends, making it very suitable for short-term traders making quick decisions. By observing the 5-minute K-line chart, one can quickly identify price fluctuations, trend reversals, and changes in trading volume.
2. 15-minute K-line chart
The 15-minute K-line chart offers a broader market perspective, helping to identify mid-term trends and support-resistance levels. For traders seeking stable short-term trading opportunities, the 15-minute K-line chart is a good choice.
3. 30-minute K-line chart
The 30-minute K-line chart can filter out short-term noise and show clearer market trends. It is suitable for traders seeking longer-term short-term trading opportunities, helping them identify potential breakouts and pullbacks.
Techniques for observing K-line charts
When observing K-line charts, pay attention to the following techniques:
Trend lines: connect high or low points to identify trend reversals and continuations.
Support and resistance levels: determine the price levels that frequently encounter fluctuations, which can serve as references for trading opportunities. Trading volume: volume is the driving force behind price changes; observing volume can confirm trend strength. Candlestick patterns: different candlestick shapes can provide clues about market sentiment and trends.
Conclusion
The best K-line chart observation time for short-term trading in the cryptocurrency space depends on the trader's risk tolerance and trading strategy. A 5-minute K-line chart is suitable for quick decisions, while 15-minute and 30-minute K-line charts provide a broader market perspective and more robust trading opportunities.
The 11 reasons for losing money in the cryptocurrency market. I wonder how many of these you have experienced.
1. Blindly choosing investment targets.
2. Entering the market based on random news.
3. Persistently investing in a single coin.
4. Contract trading
5. Frequent trading
6. Chasing highs and cutting losses
7. Not knowing how to cash out after making a profit.
8. Gambler's fallacy
9. Borrowing for investment.
10. Issues with capital management.
11. I don't want to take a scoop from the vast waters, but rather want to take three thousand scoops.
Everything begins with the right mindset; proper capital management in cryptocurrency investment is:
Firstly, always maintain a sense of risk control; don't be reckless, and leave yourself some leeway. Opportunities abound, but what is lacking is ability; being alive is more important than anything else. Therefore, a portion of the investment capital should be allocated for investment while reserving some to mitigate risks, such as in case of sudden events or black swan events.
Secondly, allocate funds rationally based on personal circumstances, clarifying the ratio of long-term to mid- to long-term investments, and then strictly adhere to this plan without changing strategies casually during the process.
Third, establish a position management strategy for buying and selling in advance. Based on (potential dragon strategy), our buying strategy is: through trend and phase judgment, arrange positions that correspond with signals appearing during the three phases of layout, totaling five layers of positions.
The selling strategy will also depend on the stage's trend, first preserving the principal to become zero-cost, letting the remaining profit fly, making it easy to sell at relative peaks and pocket the profits.
The capital we withdraw will be used to reallocate into other value targets through sector rotation, maximizing the utilization of funds. Of course, being able to achieve sector rotation is based on sufficient understanding of blockchain development and the specific sectors involved.
The complexity lies not in the market but in people's hearts. Before we invest, we must have a clear plan to ensure a clear investment and clear profit.
Greed and fear are inherent human traits. Even if an effective strategy is set before trading and one possesses excellent skills, the weakness of human nature may ultimately lead to losses instead of profits.
Why do I say this? For example, borrowing for investment, wanting to take three thousand scoops from the vast waters rather than just one. These are all manifestations of human greed.
Performance.
Borrowing for investment poses a significant psychological test, as the investment capital carries costs and time. Thus, one becomes particularly focused on the market, watching the account balance shrink with market downturns, increasing fear and worry. As a result, their mood fluctuates with the market, leading to mental exhaustion. Even if they purchase valuable coins, they might not have risen yet, and the borrowed funds could mature, leading to an awkward sale. In the best-case scenario, the profit offsets the interest on the loan; in the worst-case scenario, losses occur, increasing debts. Therefore, it’s crucial to build cash flow, using idle funds for investment, and never choose to borrow for investment out of greed.
In this world, nothing escapes the 80/20 rule, known as 'eight lose, one break even, one profit.' The financial market, including the cryptocurrency space, is no different; 20% of people hold 80% of the wealth. Ultimately, those who can profit from trading cryptocurrencies are few, while the majority are just fodder.
If you are in a state of loss but unwilling to accept it and cannot find the reason, feeling confused, then instead of self-inflicted turmoil, it's better to find out the cause. First, think through a few questions and identify the patterns in the cryptocurrency space. Before starting the article, let me ask a few questions for everyone's consideration.
1. Am I part of the 20% or the 80%?
2. What qualifications do I have to make money in this industry?
3. Who is making money in this industry?
4. Am I studying earnestly? Can my knowledge base surpass that of most investors?
5. Do I possess the ability to think independently?
6. Is my investment strategy merely following the calls of group friends, bloggers, and KOLs?
7. In the face of the operator's manipulation, can I remain calm like still water amidst the storm?
Of course, don’t underestimate yourself. This is a law of the world; it’s not our fault, and we cannot change it. If one day the capital market turns into a place where most people make money and only a few lose money, then that would be strange. The market is merely a trading conduit; it does not generate profit by itself. For instance, with Bitcoin, in the process of you buying and me selling, Bitcoin itself does not generate profits.
The so-called profit from trading cryptocurrencies comes from the price differences during the trading process. In simple terms, if you make money, it means someone bought at a high price.
Some people will lose.
Assuming there are ten participants in the cryptocurrency space, each with 10 dollars.
If a minority makes money, one of them earns 2 bucks from the other nine, who then have 28 bucks, and the other nine have 8 bucks, the game can continue. If a majority makes money, nine people earn 2 bucks from one, leading to nine people having 11 bucks, while one not only loses everything but owes 8 bucks, the game cannot continue.
When a minority makes money, the market can sustain itself; when a majority makes money, the market will collapse.
It’s similar to the lottery; if most people can win, the lottery company cannot continue its operations. Only when the majority fail and a few win can the lottery company remain in business.
Thus, the cryptocurrency market will use all methods to make most people lose money. How to become one of the few who make money?
There are many factors that lead to losses in cryptocurrency trading. In summary, they can be reduced to the following six points. As long as you avoid these six points, you can become a unique trader.
1. Severe short-term thinking.
In simple terms, we should broaden our perspective a bit. What everyone discusses and sees revolves around today’s gains and tomorrow’s losses rather than how this coin will perform in six months to a year. Everyone can observe that those who have achieved financial freedom in the cryptocurrency space are not those who made money in three to five days but rather those who endured through time.
Allocate positions reasonably, focusing on long-term strategies while supplementing with medium to short-term strategies; if a short-term trend change is accurately identified, follow it.
2. Chasing highs and cutting losses
Chasing highs and cutting losses is a mistake almost every cryptocurrency investor makes. Seeing a coin surge, and everyone discussing it, leads to following the trend and buying in. After buying, when stuck and losing 10% or 20%, they hesitate to cut losses and wait for the day they can break even. When the price continues to fall and losses reach 50%, 60%, or even 70%, they then believe that this coin is no good and cut their losses at a low price.
Then, repeatedly go through this process, and the issue of chasing highs and cutting losses is truly a psychological problem.
3. Lack of understanding
Many people enter investments without critical thinking, simply following whatever others say. Today, a certain influencer claims this coin is good, and they buy it immediately! Tomorrow, some insider news says that coin will rise, and they follow and buy again... They have no idea why this coin is good or why that coin will rise.
Such an investment method that doesn't involve critical thinking is inherently flawed. When investing, we can use others' understanding as a reference, but we must first establish our own understanding. No matter how powerful a KOL is, they first built their position before allowing you to build yours; after they cut their losses, they will remind you, and you can only help them.
4. An overly restless mindset.
Impatience seems to have become the norm in the cryptocurrency circle. Many people enter this market with the mindset of getting rich overnight, yet they are unprepared for the challenges ahead and lack the ability to achieve overnight wealth! After buying a coin, they hope it will rise immediately, doubling in three days or increasing tenfold in half a month... If the coin does not rise for half a month and even incurs losses, they start making excuses for themselves, cursing the project for poor market value management, blaming the market makers for dumping, or accusing influencers of inaccurate predictions...
Having seen too many stories of overnight wealth in the cryptocurrency space, and with almost every time period witnessing the birth of tenfold or hundredfold coins, subconsciously treating the cryptocurrency space as a 100% sure-win casino, believing that as long as I buy coins, I can make money, without seeing it as a real financial market, where bloodshed is the essence of the financial market.
5. Not learning
A media outlet previously conducted a survey on investors' understanding of digital currencies. Among 778 randomly selected digital asset investors, fewer than 10% could quickly and accurately describe what Bitcoin is, and only 17 individuals could accurately explain what blockchain technology is.
Although the statistical sample for this data is small, it is enough to illustrate the current situation of investors in the cryptocurrency space. If one cannot even clarify what they are investing in, where does their belief come from? Without belief, how can you hold onto low-priced chips or excellent coins?
Learning is a constant and unchanging asset; only continuous learning can prevent us from being...
6. Lack of sound investment philosophy
Most people do not have a comprehensive investment plan before investing, completely following their instincts. This intuition-based investment approach has a high probability of losing money when unexpected situations arise. Only by summarizing a set of investment strategies suited to oneself can we cope with various situations, whether prices rise or fall, and maintain a calm mindset, thus avoiding making erroneous choices.
Finally, I advise everyone not to be arrogant after making money. Suppose you hit a hundredfold coin; you should find a way to preserve your wealth. That was not your skill; money earned from luck can be lost by strength! Stay away from easily brainwashed individuals who, at any moment, claim to surpass Bitcoin. The blockchain revolution is such that they don't even understand what a block is. This is a typical example of being overly rigid; when you tell them the truth, they can still say you lack understanding.
Learn more and expand into related industries; the cryptocurrency industry offers more than just trading coins to make money, such as participating in airdrops, KOLs, etc., which cannot be disclosed.