True experts in trading coins simplify the process. By repeating simple actions, this short-term trading model has a win rate as high as 98.8%. Learning this can easily take you from 100,000 to 10 million, focusing solely on this one model.
I met a friend from Ningbo who enjoys short-term trading and is particularly keen on many techniques. In just a few years, he has gone from small to large and now makes a living trading coins. I have modified his 'technique,' and this year, after practice, in less than a year, he has turned an initial capital of 170,000 into 19.93 million. I hope sharing this helps fans!
After ten years in the coin trading journey, I have tasted three years of hardships but also reaped seven years of sweetness. Now this investment has become my means of livelihood. Throughout this journey, I have explored six simple yet super practical experiences, especially suitable for new friends to listen to:
Finally, don't forget, success doesn't just fall from the sky; it comes to those who are always prepared. Trading coins is the same; as long as you are willing to learn, observe, and adjust, you can become that person who is always ready.
Coin circle practical content: High win-rate structure 'Bottom Formation'
Bottom formation usually appears at the end of a downtrend, consisting of 3 to 4 candlesticks.
It is one of the classic combinations that new friends find easiest to learn and recognize.
The larger the volume of the third bullish candlestick, the higher the degree of engulfing, and the more reliable it is.
When paired with a bottom doji, it is perfect!
1. Technical characteristics of the bottom formation
1. Appears in a downtrend.
2. Consists of three candlesticks, with the first being a bearish candlestick, the second being a small bearish candlestick, small bullish candlestick, or doji, and the third being a bullish candlestick.
3. The body of the third bullish candlestick should be large, almost fully recovering or engulfing the body of the first bearish candlestick.
2. Technical meaning of the bottom formation
The bottom formation is a common high win-rate reversal signal, indicating that after a significant drop, the short selling energy has almost been fully released, and the price is unable to fall further. The right-side bullish candlestick indicates that the bulls begin to counterattack, intuitively reflecting the comparison of bullish and bearish forces, thus the probability of structural reversal is very high, and the market outlook is bullish!
The bottom formation perfectly embodies the short-term trend reversal in Dow Theory:
The first bearish candlestick is lower than the previous low.
The second candlestick shows that the price stops falling and consolidates.
The third bullish candlestick is higher than the previous high.
3. Practical logic
The first bearish candlestick is like a car driving on the road, and the decline of the candlestick represents the speed of the car, while the trading volume represents the power. The smaller the decline, the slower the speed; the smaller the volume, the less the downward power.
The second candlestick demonstrates the entire process of the car braking, stopping, and turning around.
The third candlestick is a bullish candlestick, similar to the first bearish candlestick. The rise and volume of the bullish candlestick represent the speed and power of the car. The larger the rise, the faster the speed; the larger the volume, the stronger the buying power.
Feedback in the trend reflects that when the price of the coin falls to a certain extent, the bears become weak and unable to fall further. The bulls take the opportunity to counterattack and reverse the trend, so traders can follow up and buy after the bottom formation appears!
Special Note:
When the bottom formation and the ascending flag appear simultaneously, the probability of a subsequent rise is very high, and it is also an important signal to identify the end of the flag. Strike while the iron is hot, and tomorrow we will discuss the ascending flag!
Coin circle practical content: Ascending Flag
Flags usually appear midway through a one-sided trend market.
It is a stable formation of retracement and turnover of chips.
A common scenario is that after a rapid rise in daily lines, the price begins to consolidate, forming a slightly downward-tilted rectangular consolidation shape.
Because this shape is often followed by a rising market, it is named an ascending flag!
1. Technical characteristics of the ascending flag
1. Appears midway through an upward market.
2. The coin price rises steeply and continuously, forming a flagpole.
3. Then the coin price begins to consolidate, forming a price accumulation zone with a small fluctuation range and a slight downward tilt. By connecting the high points and low points of this area, you can draw two parallel lines to form the flag surface.
4. During the formation of the flag shape, the overall trading volume significantly decreases.
2. Technical meaning of the flag
An ascending flag is likely to appear in a sharply rising market.
When the flag breaks through the upper edge of the flag, the market outlook is bullish, signaling a buying opportunity!
The excessive rising momentum has exhausted the energy of the bulls.
The large amount of profit accumulated in the short term has worsened the losses of the bulls.
Subsequently, the coin price starts to stagnate and decline.
Because a surge indicates that the main force and many traders are optimistic about the market outlook.
After the sharp rise in coin prices, it attracts the attention and funds of many traders.
So there will be continuous buying pressure, and the speed of decline is not fast.
The extent is also not very large, and the trading volume has obviously decreased.
This reflects that the market's selling pressure continues to decrease during the pullback.
When the bulls counterattack and stand above the upper edge of the flag, it becomes a right-side buying point.
3. Practical logic
1. The upper edge of the flag has a supporting effect. If it breaks out with volume and pulls back without breaking, you can enter and buy.
2. If a bottom formation appears at the tail of the flag structure, you can also buy in advance.
3. Judging the flag is suitable to observe with naked K lines, and use moving averages and other indicators to assist in finding buying points.
4. If the price of the coin exceeds the theoretical increase of the flag, and if the amplitude increases, or if bearish K lines or structures such as large bearish candles or shooting stars appear, traders should reduce positions in time when reaching the theoretical increase.
For the first three years, I suffered significant losses with debts of 8 million. After self-adjustment, in the last 7 years, I have achieved financial freedom, stable compound interest, with a monthly income in the seven figures and an annual income in the eight figures!
1. About profits Assuming you have 1 million, when the profit reaches 100%, the assets will reach 2 million. If you then lose 50%, it means your assets will return to 1 million. Clearly, losing 50% is much easier than gaining 100%.
2. About price fluctuations If you have 1 million, on the first day it rises by 10%, your assets reach 1.1 million. On the second day, if it drops by 10%, the assets remain at 990,000. Conversely, if it drops by 10% on the first day and rises by 10% on the second day, the assets are still 990,000.
3. About volatility If you have 1 million, and earn 40% in the first year, lose 20% in the second year, earn 40% in the third year, lose 20% in the fourth year, earn 40% in the fifth year, and lose 20% in the sixth year, the remaining asset would be 1.405 million, with a six-year annualized return rate of only 5.83%, even lower than the 5-year treasury bond rate.
4. About 1% daily If you have 1 million, and can earn 1% daily and then exit, after 250 days, your assets can reach 12.032 million, and after 500 days your assets will reach 145 million.
5. About 200% annual return If you have 1 million, if you achieve a 200% return for five consecutive years, your assets will reach 243 million after five years. However, such high returns are very difficult to sustain.
6. About 10 times in ten years If you have 1 million and hope to reach 10 million in ten years, 100 million in twenty years, and 1 billion in thirty years, then you need to achieve an annualized return rate of 25.89.
7. About averaging down Suppose you buy a certain coin at 10 yuan for 10,000 yuan, and now it has dropped to 5 yuan. If you buy another 10,000 yuan, your average cost per coin can be reduced to 6.67 yuan, rather than the 7.5 yuan you might think.
Graded warfare in position management
Position management must be the first lesson in our community, and it is also the hardest lesson. Just mentioning position management makes users headache, and it gives me a headache too.
The position management table I made before should be unaffordable for most people. The reason is that I wanted to deliver too much at once, just like asking a first grader to do high school homework, which is impossible.
I think it would be better to change position management to a graded system, starting from the simplest actions and gradually moving up to master-level trading skills. Besides position management and analysis of investment targets, there is really not much to learn about trading.
Let's see how many levels I can divide it into.
Beginner: Asset Inventory List
Make a list to see what coins you have in hand. You might not remember the cost, and the trading records of the exchanges are gone. It doesn't matter. What are the coins, how much value do they have, and what is the current price? At least we can list them out.
After listing, you can clearly see how much of your position there is and what the proportions are. I believe you have always thought this is quite useful, but for various reasons, you have never done it. You might feel that the exchange has the position situation, which is redundant. In fact, most people have several exchanges and a bunch of coins, and have never organized them.
To facilitate looking at prices, install MyToken and add all the coins you hold to your watchlist. It’s just a matter of moving your fingers.
After doing this well, you can enter the next level.
Level 2: Total Position Adjustment
The ratio of your coins to USDT will directly affect your proactivity and passivity, and also determine your operational space.
As far as I know, there are many people with full positions, and it is precisely because they do not understand their position situation and do not know how to adjust.
After performing basic operations, you probably already have an overall understanding of your positions. It is possible that you only have 20% in USDT, but the continuously rising market makes you uneasy, and now you are facing the adjustment of total positions.
How to adjust? There are two methods.
One approach is to reduce the position of each coin you hold, for example, by reducing each by 20%. This way, your position becomes 6/4, allowing you to handle unexpected situations.
Secondly, clean up some small coins you don't want to hold anymore, such as those that are already profitable, stagnant, or have fallen and cannot recover. Deal with them decisively to reduce your mental burden and free up 20% of your funds for bullets.
There are also some techniques for handling position adjustments, such as adjusting during a big rise can yield certain profits, but if you wait until a big drop to adjust, it becomes very difficult.
Understanding total position adjustment means your preparatory work is more than half done.
Level 3: Single Coin Position
This concept I really haven't heard anyone talk about; maybe I'm just uninformed. Single coin position means that if you want to play a certain coin, you should set an operating fund for it right from the start.
For example, if you have 100,000 to trade coins and want to play BNB, which is very powerful, you can allocate 15% of your funds to it, so take 15,000 to play, keeping it separate and avoid adding randomly. Sometimes what happens is, for example, you originally bought 5,000 out of 15,000, and a few days later you want to play OKB, taking another 10,000 to buy 5,000 of OKB, resulting in a mess in your BNB position. This kind of operation often occurs, and if you keep doing this, you will end up without any bullets.
Understanding single coin position allocation gives you principles in your actions and allows you to seize profits from each coin.
Level 4: Trading in Different Warehouses
On the basis of Level 3, trading in different warehouses becomes much easier.
For example, now BNB is 600 USDT, and you have prepared 10 layers of positions for it. Starting with a 10% position, then every time it drops 60 USDT, you can add 10%. By the time BNB reaches 60 USDT, you will have 90% of your position. I really don’t believe it can reach 60 USDT. The meaning of this is that when adding positions, using this price anchoring method is stable enough. If it falls to 500 USDT, and you see the market drops by 10%, it actually has dropped 50 USDT, which is not easy to calculate.
Using this bottom-fishing method, unless it goes to zero, you can never be fully invested, which inherently avoids high-risk operations.
So what if it rises? We also need to take profits by splitting positions. The benefits of taking profits are obvious; it allows you to place orders in advance to reduce the burden. Some exchanges can also achieve buying more on a dip, which would be even better if you know how to use it.
If BNB at 600 USDT rises by 10% to 660 USDT, and you take a profit of 10%, selling out 60 USDT, the flexibility of the BNB position increases, giving you some extra bullets. When taking profits, you can be a bit aggressive, using the market rise as a reference. For example, if it rises from 600 to 700, your 10% profit-taking operation would be 70 USDT, still aimed at reducing operational burden, which can be a bit complicated.
In warehouse operations, you need to frequently calculate the cost of coins. The cost of coins will change with each operation. Except when adding positions, which strictly follows the price of the first purchase, other operations can be referenced regularly.
Understanding split position operations means you have already won more than half of your position management.
Level 5: Zero-cost Coin
I often mention zero-cost coins, but this kind of operation is actually not easy.
When to withdraw principal? When to take profits? When to run away with both principal and profits? This needs to consider many factors beyond position management.
In other words, at the advanced level, it is no longer limited within the framework of position management, and you need to consider the big environment, the value of the coins, and your investment methods along with other factors for dynamic adjustments.
For instance, if a certain coin doubles, and you find through horizontal and vertical comparison analysis that this coin has at least tripled in potential, then the method of taking out principal after it doubles is not ideal; it is better to take out half after it doubles.
For example, if the big environment is not good, it may be the peak of the bull market and may still fall. In this case, if you have a profit of several dozen points, you should take the profit. The peak of the bull market should extract the cost and leave profit coins to fight against the possibility of a surge. In the upward trend, extract profits and leave costs to continue earning, and in the downward trend, run away completely to accumulate bullets, repeatedly going long on zero-cost coins at the bear market bottom.
This is far from over.
Next, you need to distinguish between new warehouse and arbitrage warehouse and other positions, further moving towards the peak of position management mastery.
Making money, discipline accounts for at least 60%, cognitive level accounts for 40%, and in extreme situations, discipline can account for 100%. What about luck?
I don't think there is any in Chengdu.
Why is that?
You need to think for yourself.
Stay close to Su Ge, use precise strategy analysis and massive AI big data selection to keep yourself in an unbeatable position? The market never lacks opportunities; the question is whether you can seize them. By following experienced and the right people, we can earn more!
