This session's guest @Pai X Teacher (hereinafter referred to as Teacher Pai Pai) is a representative of practical trading who transitioned from being a miner to a professional trader. Since coming into contact with Bitcoin in 2012 and transitioning to Ethereum mining in 2016, Teacher Pai Pai has deeply engaged in the crypto space for many years, accumulating rich frontline experience. His core philosophy is 'trading looks at the risk-reward ratio', emphasizing finding advantages in the market through probabilistic thinking and technical analysis. In this live broadcast, Teacher Pai Pai provided extremely insightful advice for novice traders based on his own growth journey.
Below are the questions raised by community partners during the Space live broadcast and the wonderful answers from Teacher Pai Pai 👇
Q1: Issues with stop-loss in contract trading
Question: Many beginners want to earn a lot from contracts, but the first lesson in contracts should be about stop-loss. Does Teacher Pai Pai always use stop-loss when opening a position? How is the stop-loss ratio set?
Answer: The core principle of contract trading is to always have a stop-loss with each position opened. The specific stop-loss setting should take into account personal risk tolerance, market characteristics, and strategy type. Typically, there are two stop-loss methods: one relies on technical pattern characteristics, taking stop-loss strategies at critical positions of the patterns; the other is a loss-based approach, investing a fixed percentage of capital for each trade to cover the actual stop-loss range.
Q2: Issues with timing of entry
Question: Stop-loss is important, timing is the lifeline. Some say good opportunities are waited out. Does Teacher Pai Pai agree, and what technical analysis will be used to find suitable entry points?
Answer: I fully agree. The secondary trading market in the crypto space is open all year round, with low time costs. Typically, I use technical pattern analysis to find suitable entry points through structure.
Q3: Same source of profit and loss and mindset adjustment issues
Question: Can Teacher Pai Pai share experiences of the highest profit or the biggest loss, and how to adjust the mindset in the face of huge losses?
Answer: Before 2019, the highest profit peak came from Ethereum, where holding some Ethereum yielded a high return rate. However, the trading system was not well-established at that time, and the largest loss came from Ethereum-based contract trading. After 2019, with the improvement of the trading system, the maximum loss would not exceed 20% of the total capital. Mindset management is relatively simple; stepping away from the market and embracing life can help recover a good mindset.
Q4: Issues with market judgment
Question: A complete trading system involves trading technology and mindset management. Is Teacher Pai Pai optimistic or cautious about the short-term market trends? From the policy perspective, is there still a long-term benefit?
Answer: From a technical perspective, I remain optimistic in the short term. It is normal market behavior for the overall market to show fluctuations after a rapid rise. Attention should be paid to the core support levels of 101k and 98k. In terms of policy, the implementation of Bitcoin ETF and various central bank policies regarding the crypto field are long-term benefits for price increases. However, the mid to short-term market will depend on whether the current tax reduction bill can be successfully passed and the specifics of the legislation afterwards.
Q5: Issues with integrating knowledge and action
Question: It is easy to say that knowledge and action are one, but difficult to implement. How can beginners integrate what they have learned into practice and truly put it into action?
Answer: There is no optimal solution or standard answer. If one wants to develop steadily and sustainably in the crypto space, they must establish a complete trading or investment system that belongs to them, create a risk control system through technical analysis, and strictly adhere to trading discipline.
Q6: Sharing courses or knowledge points
Question: Does Teacher Pai Pai have convenient courses or knowledge points to share with the friends in the live broadcast?
Answer: Since 2019, I have been improving and revising the theoretical tutorial on technical analysis of chart patterns in the crypto space. There will be opportunities to share with friends on the Binance platform in the future. For strict execution of entry and exit points, as well as stop-loss strategies, it is necessary to cultivate these from the most basic stage. Technical analysis is the most elementary entry point, forming a closed loop through risk control systems.
Q7: Issues with trend judgment
Question: How to judge trends?
Answer: For a period, if the market high points keep creating higher highs and the low points keep creating higher lows, it is a unidirectional trend; within a fixed period, if both highs and lows are in a relatively running range, it is a sideways market.
T1: Issues with Ethereum contract trends
Question: Recently, what should the contract trend of Ethereum look like from a technical perspective?
Answer: Currently, Ethereum is at a turning point in a phase of market behavior, facing long-term neckline resistance around 2830. If a breakthrough can be achieved later, the price performance may see unexpected increases. However, it is currently constrained by neckline resistance, and there is a triangular formation below that has not yet formed a complete structural pattern, needing further waiting and observation.
T2: Issues with choosing contract targets
Question: In current contracts, how does Teacher Pai Pai choose targets? Are there more altcoin targets or mainstream cryptocurrency targets?
Answer: Currently, the performance of the entire altcoin market is not outstanding. The phase of the market led by Bitcoin is more prominent, usually, most traders will focus more on the overall market trend. The overall position allocation and flexibility of altcoins are higher; without a main narrative background for altcoins, it is difficult to have independent market trends.
T2 - 1: Issues with target selection driven by policies
Question: Recently, the market has been driven by policies. What are the views on target selection?
Answer: In terms of target selection, there is more inclination towards the overall market. If there are tokens born from hot events, they may receive more attention, but it is less likely to hold them for long because the entire altcoin market may be a bit PVP, without a core narrative subject, making it hard to hold for long.
T3: Issues with controlling take-profit for beginners
Question: A beginner has just been in contact for over ten days. How can they control take-profit when trading?
Answer: There is no fixed standard for take-profit. Learning technical analysis is to find the reasons for take-profit. In short-term or frequent trading, one usually refers to the technical pattern theory standards to make take-profit decisions.
T4: Can Bitcoin break through previous highs?
Question: Can Bitcoin still break through previous highs?
Answer: Bitcoin is currently in a channel upward pattern, with no excessive bias, and may be in a consolidation state. From a viewpoint perspective, I am relatively optimistic about the overall market trend, leaning towards the idea that new historical highs may continue to be set, but it depends on what kind of structure will emerge during the current consolidation cycle. If it operates within the rising channel, there may be a possibility of further pullbacks if it breaks below the rising channel.
T5: Future trends of old cryptocurrencies
Question: Regarding some old coins like Ripple, ADA, Litecoin, etc., which have been around for a long time, what will their future trends be like? Will they stretch along with Ethereum and Bitcoin, and what is the potential?
Answer: It depends on the specific chip distribution. From a pattern perspective, there is a certain space; in the short term, it will definitely be influenced by the overall market. For example, Ripple and ADA fluctuated due to speculative expectations, but from a pattern perspective, clues can be identified. These varieties, due to long-term accumulation and sufficient washing, have opportunities for good performance in the future. From the perspective of odds, they look good, but it specifically depends on how the overall market performs later and whether the pattern can reflect upward expectations.
T6: Issues with adjusting mindset after contract liquidation
Question: For contracts that are frequently opened, if liquidation occurs, how should the mindset be adjusted?
Answer: There is no good answer to this question. First, one must establish a good system in risk control, which is core, and then talk about mindset. If there is no risk control background, it is easy to fall into a mindset explosion trading state. When facing adjustments, one should remain within controllable risk limits. If there is a change in mindset, embrace life or use attention-shifting methods to quickly recover from a bad state. Without a good trading system, every trade may face liquidation risks, making it difficult to adjust one's mindset over time.
T7: The role of trading volume in contracts
Question: For example, when looking at the trading volume for the past half hour, hour, or four hours for spot or contracts, is it useful for doing contracts?
Answer: On the Binance platform, one can see the overall buying and selling volume on both sides, which may lead to a relatively biased conclusion for trading. However, the specific analysis methods need to be expanded upon, and it may not be possible to discuss in detail today.
T8: Issues with grasping trends in short-term trading for beginners
Question: For beginners engaging in short-term trading, how can they better grasp trends? Should they look at candlestick charts or something else?
Answer: Stop-loss in short-term trading is quite crucial. It is important to control core risks and clarify the maximum acceptable loss ratio. This applies to both short-term and long-term trading; essentially, short-term trading has a higher frequency, so the risk control system must be strictly enforced. As for which method is better, it depends on what technical theories or other trading bases are applied in the existing trading system to formulate a reasonable stop-loss strategy.
T9: Commonly used technical indicators and leverage position setting issues for beginners
Question 1: What technical indicators would you recommend for beginners, or which ones does Teacher Pai Pai frequently use and find most useful after verification?
Answer 1: Personally, I might look at trading volume more; others are auxiliary. More often, I primarily use naked candlestick trading, which focuses on chart patterns, with entry methods based more on chart structure.
Question 2: When selecting targets, how do you set leverage or position? How do you set take-profit and stop-loss ranges for different coins or targets?
Answer 2: Typically, the leverage for total capital does not exceed twice. Based on this, different position ratios are allocated for different varieties depending on liquidity.
Question 3: If someone is a beginner, they might open many times the leverage, thinking that two times is too conservative. What do you think?
Answer 3: In crypto trading, there is a saying that slow is fast, because the crypto market operates all year round, and the time cost is particularly low. There is no need to worry about missing opportunities; what really needs to be concerned about is whether one can prepare well for each trade and seize every opportunity.
Question 4: What is the trading frequency, how many trades are opened in a day?
Answer 4: Relatively speaking, I am a medium-frequency trader. In good market conditions, there may be some high-frequency operations, but overall leverage will not exceed twice. The frequency varies depending on the different stages of the market. Generally, it is a medium-frequency state. Like the last couple of days where the market is poor, I may not open a single trade but will only hold the existing spot.
Question 5: How long do you usually look at the market, under normal trading frequency?
Answer 5: For looking at the market, for example, if the market conditions are particularly good in these two days, I may spend half the day in front of the computer. I may not always stare at the screen but will occasionally check the market for short-term opportunities.
Question 6: For different targets, stop-losses vary. What is the recommended stop-loss range for beginners?
Answer 6: It is best to keep core risks within 20% of the total capital, meaning that regardless of the trading cycle or frequency, one should try to prevent the loss from exceeding 20% of their total capital. If that happens, one should take a break for a while before returning to the market.
Question 7: Will you hold positions?
Answer 7: There have been issues with holding positions in the past, but since 2019, with the improvement of the trading system, that situation has gradually ceased.
T10: Issues and solutions to losses under high leverage
Question: A student has some spare money and wants to open high-leverage contracts. Following Teacher Pai Pai's stop-loss of about 2/8, after thousands of stop-losses, the principal keeps decreasing. Looking at the market with naked candlesticks, every time the direction seems correct, but usually within a day or half a day, if the direction does not meet expectations, they will manually close the position, leading to losses in seven or eight out of ten trades. The main reason is under high leverage, opening positions with Bitcoin and not being able to monitor the market at night, resulting in lost positions. What solutions are there?
Answer: First, one must address core risks by controlling the leverage ratio, keeping it below twice the total capital because opportunities in the crypto space are very cheap, and it operates year-round without a shortage of chances. Secondly, the issue of enforcing trading discipline must be resolved; one should not terminate trades early due to price fluctuations and mindset influences. Finally, it is necessary to understand whether the technical analysis theory currently applied has any deficiencies. If there are gaps, one should supplement and study, spending time to solidify their knowledge, to have a chance to overcome trading difficulties.
Follow-up question: For beginners, is it recommended to start with a small amount of capital, or should they first watch the KOL teachers in the plaza explain slowly and learn well before actually trading? Which is better?
Follow-up answer: The learning content must be implemented in the practical process. First, it is necessary to learn. During the learning process, one can use the method of reviewing past trades, including simulated trading operations, to accumulate experience and digest the learning content. Watching some KOL analyses is okay, but it should not be superficial. Each trader has their own mature trading system, and if one cannot lay a solid foundation in learning a complete trading analysis theory, it will be difficult to establish their own investment or trading system.
T11: Issues with altcoin swing trading and holding positions
Question 1: Regarding altcoins, when doing short-term swings, after long observation, one roughly knows the ups and downs. However, if the direction of the rise and fall is wrong, should one hold the position?
Answer 1: If it is determined that there is a problem, one should strictly stop-loss and not insist on holding the position.
Question 2: For altcoins, is it more advisable to do short-term or long-term?
Answer 2: It should be based on the different stages of the market environment. In the current market environment, long-term is not a very good idea. Mid to short-term frequency would be better because the entire altcoin market lacks continuity and does not have a core narrative background to support it, making it difficult to have a continuous market trend; it mostly follows Bitcoin's lead and produces some increases.
Teacher Pai Pai's advice for beginner contract operations
For beginner traders, it is important to start with the basics and at least learn some fundamental skills, whether macro analysis, technical analysis, or on-chain analysis; it is sufficient to choose one. This may be key to establishing oneself in the crypto space at present. Through this anchor point, one can expand their trading system map, ultimately forming a closed-loop trading system. Only in this way can one go further on the path of trading. If one enters the market without any rules or planning, it will be difficult to achieve good results in the future market and may be quickly eliminated by the market.
This is a complete collection of highlights from this live broadcast! Thank you very much to Teacher Pai Pai for the wonderful sharing, and thanks to every friend who participated in the interaction. I hope the content organized today can provide some inspiration and reference for you on your trading journey. Whether you are a beginner or a veteran, we are all learning and growing in this market. See you in the next live broadcast!