I started from being a small retail investor with 50,000 yuan and finally became a middle-class with 800,000 yuan! (K-line teaching to avoid huge losses)
I am 33 years old this year. In 2017, I rushed into the cryptocurrency world with a capital of 50,000 yuan, and since then I have started my journey in the crypto space!
I started from being a small retail investor with 50,000 yuan and finally became a middle-class with 800,000 yuan!
I share my insights from my journey. The most important aspect of trading is money management; do not invest all your money at once. I habitually divide my funds into five parts, using only one part for trading each time. This way, even if I incur losses, I won't be too heavily burdened. Furthermore, I set a rule for myself: if I lose 10%, I immediately withdraw, regardless of the market situation. If I lose 10% five times in a row, I only lose 50%. However, if I make profits, the returns can be much greater. Even if I find myself stuck, I can maintain my mindset.
Following the market trend is always the most reliable strategy. When the market is falling, do not think about bottom fishing; that is simply unrealistic. During a rise, a pullback is the golden opportunity; buying low is much safer than trying to catch the bottom.
When it comes to coin selection, you need to have sharp eyes. Those coins that surge dramatically, whether mainstream coins or altcoins, should be avoided as much as possible; coins that rise too quickly will also fall back significantly, making it easier to get stuck.
Regarding technical indicators, I use MACD the most. The DIF line and DEA line crossing and breaking through the 0 axis below is a buy signal. Conversely, if they cross and move downward above the 0 axis, then you need to reduce your position.
When it comes to averaging down, never attempt it lightly! If you lose, do not average down; the more you average down, the more you lose, and you may end up with nothing. Remember, cut losses when losing, and only increase positions when making profits.
Trading volume is also very crucial. When the price breaks through at a low point, if the trading volume increases, it is usually a significant opportunity.
The most crucial point is to follow the trend and seize the opportunity! Combine the daily line, 30-day line, 84-day line, and 120-day line. When any line starts to turn upward, you will know how to operate.
The path of cryptocurrency trading has risks but also significant opportunities.
Learn money management, trend analysis, and coin selection to reverse from a small retail investor to a middle-class like me.
Master the secrets of naked K lines to understand the market pulse in five minutes and accurately capture trading opportunities!
The K-line chart, which originated from the wisdom of the rice market trading during the Edo period in Japan in the 18th century, is also known as candlestick chart, Japanese line, Yin-Yang line, etc. After more than three hundred years of precipitation and evolution, it has become an indispensable analytical tool in TD, futures, foreign exchange, options, and even virtual currency markets.
The K-line chart is not only a historical picture of price fluctuations but also a subtle embodiment of Eastern philosophical thought. The change of Yin and Yang signifies the fluctuating strength of bulls and bears, showcasing the subtle transformation of market "momentum".
Every K-line is a reflection of the market's ups and downs in a day. By connecting daily K-lines in chronological order, it outlines the historical trajectory of price fluctuations; this is the K-line chart.
The composition of K-lines contains four key elements: opening price, closing price, highest price, and lowest price. If the opening price is lower than the closing price, it forms a Yang line; otherwise, it forms a Yin line. The rectangular body in between, along with the upper and lower shadows, together form the unique shape of the K-line. Daily K-lines, weekly K-lines, monthly K-lines, as well as minute lines and hourly lines, are all representations of the K-line chart across different time dimensions.
Plotting a K-line chart with time on the horizontal axis and price on the vertical axis, the lively picture of daily market fluctuations comes to life. The columns in the K-line chart alternate in red and green, symbolizing rises and falls. The red column represents a rise, with the closing price higher than the opening price; the green column represents a decline, with the closing price lower than the opening price.
If the opening price and closing price are the same, a doji is formed, indicating a subtle balance in the market. So, what does a K-line chart look like? How should it be interpreted? Please savor the following image, allowing the secrets of the market to slowly unfold before your eyes!
What does naked K trading analyze?
Naked K analysis mainly has four modules: trend, position, momentum, and signals.
These four core analysis sections are not isolated; they support each other, promote each other, and work together.
When responding to the ever-changing market, if we can conduct in-depth analysis from these four dimensions, it will make our analysis more comprehensive and systematic, avoiding impulsive actions of entering the market rashly just because we captured a certain trading signal, which is a common mistake made by many novice traders.
So, how can we accurately grasp the pulse of the trend? When it comes to trend analysis, we must remember three key elements: structure layout, running direction, and volatility level. As for the identification of naked K-line trends, it mainly depends on the classic technical theory defining the trend.
From a structural perspective, when observing obvious highs and lows continuously rising, it can be determined as an upward trend. Conversely, if highs and lows keep declining, it is seen as a downward trend; while fluctuations between high and low points are classified as oscillation patterns.
Figure (2)
In trend judgment, the biggest difficulty is the division of levels and the transition of trends.
The division of trends at different levels involves the issue of primary and secondary rhythms. Beginners are easily influenced by small-level trends, often neglecting the main trend, leading to confusion in trading direction. Is the trend switching a correction or a reversal? It is not easy for us to judge this, as there are no absolute quantifiable standards.
To solve the problems of different levels and trend transitions, my method is: define your main trend and critical points. Since the starting point of trend selection is different, your understanding of the trend direction may not be the same as others.
So you need to define the trends you categorize, identify its main trend, and then identify the critical points of each trend level. Is the price position high or low?
Keywords of position: support level, resistance level, risk-reward ratio. Why do you chase high prices? Why do you always make small profits and big losses? This is related to the judgment of price positions. If you always go long at resistance levels and short at support levels, not only is the failure rate high, but the risk-reward ratio is also very low.
Position judgment is also very important. Is the price high or low? A basic personal measure: support levels belong to low prices, resistance levels belong to high prices because profit-taking settings are also set at support and resistance levels.
So: buy at support, sell at resistance, the long position has the highest risk-reward ratio, buy at resistance, sell at support, the short position has the highest risk-reward ratio.
Unless you are trading breakouts, all longs at resistance levels are considered high-position entries, and all shorts at support levels are considered buying into declines.
This is based on judging price highs and lows using support and resistance levels.
If you add the concept of trends, how would you judge the highs and lows of positions? How to judge the strength of momentum?
Keywords of momentum: trend movement, K-line patterns, slope. Momentum can be said to be the cornerstone of trend movement; without momentum, there is no existence of trends. Therefore, momentum analysis is also a very important module.
What is strong momentum, and what is weak momentum? Strong momentum: trend movement, consecutive rising or falling lines, large bullish or bearish candles, steep slopes. Weak momentum: range movements, doji, small bullish or bearish candles, gentle slopes.
An upward trend must have bullish momentum stronger than bearish momentum. A downward trend must have bearish momentum stronger than bullish momentum. Range oscillation must be a state of balance between bears and bulls, and narrow fluctuations indicate a trend of energy accumulation.
Trends from strong to weak indicate that a trend is a form of momentum. The trend from large bullish candles to small bullish candles indicates a weakening of bullish momentum. The decreasing slope indicates that momentum is weakening, and vice versa. The above is based on trend and price K-line forms to judge the changes in price momentum and thus judge the price movement direction of the market.
So, if position and momentum strength analysis is added, what are the special changes? Is it reliable to look at signals for entry alone? Keywords: trend, position, momentum. When it comes to signals, many of us only think of reversal patterns like hammers, engulfing lines, etc.
Speaking of trading signals, they must be based on the three modules of trend, position, and momentum. If you look at signals and enter trades without analyzing the first three modules, you will find that the success rate is not high; this is why trading signals cannot be divorced from market conditions.
Personally, there are times when my entry does not always wait for trading signals, as I have a good grasp of price trends, positions, and momentum.
Finally, this article elaborates on the four analysis modules of naked K, each module also covers many knowledge points, which requires you to have a more solid foundation. However, the four modules are a large analysis framework. If we have not found the direction for analysis and trading, we might as well sort out the market from these four modules.
In addition, there are several key technical levels worth noting: 1)
Psychological support and resistance points - usually integer exchange rates, such as 1.00, 1.10, 1.20, etc. Many traders tend to set orders near these integers.
2) Fibonacci retracement levels - finding potential levels and trends for price retracement. When used on higher time frames, important Fibonacci levels (such as the 61.8% retracement level) can become key technical levels, where there may be a large number of open orders.
3) Pivot points - pivot points are the turning points in market direction throughout the day. By simply calculating the previous day's high/low and closing prices, you can obtain a series of points that can form key support and resistance lines. Range traders can use the pivot point system to confirm potential reversal points, while breakout traders can use the pivot point system to confirm key breakout points of the trend.
4) Dynamic support and resistance points - key technical levels are not necessarily fixed; they may also be dynamic. Moving averages are often used to determine dynamic key technical levels where EMA appears near the 50-day, 100-day EMA, or Fibonacci EMA levels (such as the 144-day EMA).
5) Integration areas of support/resistance - these areas are intersections of different important technical levels. For example, an upward trend line may provide price level support at a horizontal support level. This will form an integrated support area of the upward trend line and horizontal support. Always learn from the market.
The market is changing. Trading is not something you can just grasp; it requires consistent stability in profitable trading for a week, a month, a year, or even several years. That is true understanding, indicating you're on the right path and that it has been proven feasible. Don't pay too much attention to others' opinions, as the vast majority are losers. The market is the best teacher; focus on yourself, be consistent, overcome impulsive trading, and approach the market with caution and respect.
Wisdom for trading in the cryptocurrency world:
Grasp the following secrets to help you navigate the crypto world confidently and easily achieve hundredfold returns!
Revealing the essence of cryptocurrency trading: once a key price level is broken, short-term opportunities vanish in an instant. Interpretation: When the price breaks through important support or resistance levels, it means short-term trading opportunities are emerging, and you must act quickly to avoid missing them.
After a surge, a pullback often follows; do not impulsively chase high prices due to greed. Interpretation: After a price surge, a pullback usually follows. At this time, do not impulsively chase higher prices; stay calm and maintain your mindset.
Beware of major players setting traps to lure you in. Interpretation: If prices rise but trading volume does not increase, it may indicate that the major players are creating a false price increase, deceiving retail investors into entering the market; stay alert and guard against being fooled.
Don't panic when there's a sharp drop with shrinking volume; retreat when there's a slow decline with increasing volume. Interpretation: When the price drops sharply but trading volume is low, there is no need to be overly anxious; however, if the price drops slowly and trading volume increases, you need to decisively exit to avoid losses. A rapid surge in the main rise often indicates that the top is near. Interpretation: When the price rises quickly, it often signals that the top is about to arrive, and you need to closely monitor the characteristics of the top and prepare for a response.
Do not chase high prices when entering the market; a pullback is a good opportunity. Interpretation: When purchasing cryptocurrencies, do not rush in when prices are high; the risk is extremely great. The best time to buy is when the price pulls back and is relatively reasonable.
Combining daily and weekly charts to gain insights into the main force's movement is key. Interpretation: When analyzing price trends, it is necessary to combine daily charts with weekly charts and even longer time frame charts to accurately understand the main force's intentions and market trends.
Combining daily and weekly charts to gain insights into the main force's movement is key. Interpretation: When analyzing price trends, it is necessary to combine daily charts with weekly charts and even longer time frame charts to accurately understand the main force's intentions and market trends.
Slight fluctuations need not worry; continuous large rises require caution. Interpretation: Small price fluctuations are normal and do not require excessive concern; however, if prices rise continuously and significantly, one should be cautious to prevent risks from overheating the market.
New lows in price with reduced trading volume may indicate a bottom signal; when trading volume increases with rising prices, the timing for entry is ripe. Interpretation: When the price drops to a new low with shrinking trading volume, it may indicate that a bottom has appeared; when trading volume increases and prices start to rise, it is the best time to enter the market.
That's all for sharing. In cryptocurrency trading, you must maintain a good mindset. Don't let your blood pressure rise during a downturn, and don't get carried away during a surge; securing profits is important.
Still the same saying, if you don’t know what to do in a bull market, click on my avatar, follow me, I will share spot planning, contract codes, and more for free.
I need fans, you need references. Guessing is not as good as following.
