Many people say that short-term trading in cryptocurrencies does not make money, but in reality, most of it is because short-term trading requires a certain amount of time to monitor the market and extensive backtesting. Additionally, in the cryptocurrency market, there are dual-direction trading fees, meaning that both buying and selling incur certain fees from the exchange. In this case, before calculating returns from trading, we must consider the costs incurred and include these costs in our calculations.
Moreover, in short-term trading, if the market judgment is inaccurate, it can easily turn short-term trades into medium to long-term ones, even turning into a form of belief. The vast majority of people do not have systematic trading habits, making it difficult to strictly adhere to our own habits, leading to immediate withdrawal upon return. Not so; in short-term trading, there are two ways to ensure we can exit safely.
a. We will use a cryptocurrency trading bot for trading, executing automatically 24 hours a day.
b. Therefore, set strict buying and selling principles for yourself: immediately sell after a 30% profit and buy after a 30% drop, manually operate, and strictly execute. As long as we follow the trading rules, we will not be trapped in a passive or losing situation. Of course, the same applies to spot and contracts; both swing trading and contract trading must be strictly executed, and we need to establish our own trading system.
Tips for short-term trading in digital currency:
1. Do not have any subjective or artificial directional sense before placing a trade. Each market entry should have a predetermined stop-loss point or stop-loss conditions. Do not focus on profits or losses or the highs and lows of prices when entering or exiting the market. For 'ultra-short' trades, only select the 'hottest varieties' with the largest trading volume and increasing positions recently, leading in bullish or bearish trends. Do not consider or trade in varieties with no significant trading volume.
2. For 'ultra-short' trades, only observe the real-time chart, 1 or 3-minute charts, bid prices from buyers and sellers, trading volume, and order consumption (do not look at any other technical indicators, do not care about the highs and lows of prices),
3. The moving average parameters for the real-time chart are; the moving average parameters for the 1 or 3-minute chart are 5 or 55, 113, and the volume line is 5, 34. Additionally, adjustments can be made based on different varieties.
Observe the real-time chart, grasp the trends of the day and moment: 4.
(1) When the average price line (yellow) is sloping upward, and the price line (white) is above the average price line, with each wave moving higher, it indicates a bullish trend, and we will primarily go long (only consider shorting when the price line is too far from the average price line, or give up shorting opportunities during a bullish trend).
(2) When the average price line is sloping downward, and the price line is below the average price line, with each wave moving lower, it indicates a bearish trend, and we will primarily go short (only consider going long when the price line is too far from the average price line, or give up long opportunities during a bearish trend).
(3) When the average price line is horizontal, and the price line crosses above and below the average price line, it indicates the current market is consolidating or oscillating. Do not enter the market, or trade both long and short.
(4) When you see the price line crossing above the average price line, go long (or close short to go long); when it crosses below the average price line, go short (or close long to go short).
The best moment for 'crossing' is when there is a combination of the 1 or 3-minute chart, order consumption, and trading volume.
5. Specific entry and exit points depend on the 1 or 3-minute chart and observing order consumption.
(1) When the real-time chart shows a 'bullish trend', patiently wait for the 1 or 3-minute chart to show 'the previous candle is a bearish K line, flipping to a bullish K line' or 'when a bearish candle flips to bullish while the 3 moving averages turn upward', decisively enter the market to go long. At this point, the sell orders are continuously consumed by buy orders. Even if there are some downward sell orders, they are not significant or cannot be sustained.
(2) When the real-time chart shows a 'bearish trend', (going short is exactly the opposite of going long, not elaborated here).
(3) Close long positions. If you entered the market at the first occurrence of a 3-minute bearish K line flipping to a bullish K line, immediately prepare to close the position. The timing for closing is: close as long as there is a profit, or if the upward movement of bullish K lines becomes smaller, or has a long upper shadow, or if there are already two consecutive bullish K lines lasting over 3 minutes, or if there is a sudden increase in sell orders above, or if there are large sell orders eating up buy orders while buy orders continue to decrease, or if the first bullish K line has just flipped to a bearish K line in the 3-minute chart, or if a bullish K line flips to bearish while the 3 moving averages turn downward. At this point, decisively close the long position.
(4) Close short positions (the opposite of closing long positions).
(5) When the real-time chart shows an 'oscillation trend', as long as there is a reversal from a bearish to a bullish candle on the 3-minute chart, and the 3 moving averages turn upward, go long; if there is a reversal from bullish to bearish, and the 3 moving averages turn downward, go short.
Even the most diligent fisherman, in the season of raging storms, will choose to calmly guard his boat, waiting for the storm to pass; the sunny days will eventually come. Follow me; I will not only give you fish but also teach you how to fish, and the doors of abundance will always be open to you. Following the trends of the times is the way to embrace a smooth life. Remember, this is your guide to wealth!