Revealing High Win Rate Methods for Swing Contracts in the Cryptocurrency Market by a Senior Player Focused on Contract Trading
1. Trend is King, Follow the Trend
• Trend Judgment: Determine the overall direction of the market using trend lines and moving average systems. Only trade in line with the market trend: go long in an upward trend and short in a downward trend.
• Key Support/Resistance Levels: Use historical trading dense areas, Bollinger Bands, and chip distribution tools to locate support and resistance levels, providing a basis for buying and selling decisions.
• Volume-Price Synchronization: When the price breaks through key resistance levels, pay attention to whether the trading volume increases to confirm the validity of the breakout and avoid false breakouts.
2. Technical Indicator Combination
• MA5/MA20 Moving Average Cross: Short-term moving average crosses can be used to determine changes in short-term trends.
• MACD: Observe the contraction or expansion of MACD histogram bars to capture potential reversal signals.
• RSI and KDJ: The RSI indicator can help judge overbought or oversold conditions; an RSI above 70 indicates an overbought market and may be a time to take profits; below 30 indicates an oversold market, which may be an opportunity to buy the dip. Combine with KDJ golden cross/dead cross to further verify signals.
• Bollinger Bands and ATR: When Bollinger Bands narrow, it indicates that the market may be about to change direction. Combine with ATR to set dynamic take profits and stop losses to adapt to market volatility.
3. Three Iron Rules of Trading
• Stop Loss: Each loss should not exceed 3% of the principal. When the price breaks key support levels, immediately close positions to avoid further losses.
• Dynamic Take Profit: Once profits exceed 15%, activate trailing stop loss, moving the break-even line up with profits to ensure that profits are not given back.
• Position Control: Control positions in a single cryptocurrency to within 20%. Do not exceed 50% of total position when opening a new position to ensure that a single failed trade does not impact overall funds.
4. Three Key Factors for Asset Selection
• Liquidity: Choose cryptocurrencies with a 24-hour trading volume exceeding $100 million to avoid slippage due to insufficient liquidity.
• Volatility: Select cryptocurrencies with a volatility rate greater than 8%, as these typically have higher volatility suitable for swing trading.
• Event-Driven: Pay attention to significant events related to the cryptocurrency, such as mainnet launches, halving, partnerships, etc., as these events can trigger significant price fluctuations.