Step 1: First look at the trend
Step 2: Find key levels again.
Step 3: Look for entry signals. Enter, profit, close, leave. Isn't it simple?
Let me explain this in more detail.
Step 1: First look at the trend. The state of a market can result in three outcomes: rising, sideways, or falling. What is a major market? Look at charts with periods longer than 4 hours, such as 4-hour, daily, or weekly charts (my personal habit is to look at the 4-hour chart). Buy when the market rises, sell when it falls, and do not trade in sideways markets.
Step 2: Find key levels. Regardless of whether the market is rising or falling, it will jump up and down like a bouncing ball, jumping level by level. What we need to do is enter at the launch position and exit at the next landing point. Finding precise steps becomes key #Bitcoin, which we call key levels (main support and resistance levels).
Step 3: Look for signals. If you find a market trend in a large cycle, you should look for trading signals to enter in a smaller cycle. #Ethereum. Everyone has different strengths in their trading strategies; mastering one or two is sufficient. #Cryptocurrency. What is more important is the ability to quickly formulate trading strategies.
A complete trading strategy includes
(1) Target - What to trade;
(2) Position - How much to hold;
(3) Direction - Bullish or bearish;
(4) Entry point - At what level to trade;
(5) Stop loss - When to exit a losing trade;
(6) Take profit - When to exit a profitable trade;
(7) Countermeasures - How to deal with unexpected situations;
(8) Afterhand - Operations after the trade ends.
Today, adhering to the philosophy of helping others and oneself, I will share the ten major short-term strategies I have summarized. Each strategy is a precious experience earned with real money. Understanding and mastering them will save you five years of detours! The early stage of the investment market is about diligence and skill, the middle stage is about wisdom and mindset, and the high stage is about humanity and ethics. Understanding to wash away distractions, keeping a calm mind, and overcoming all human weaknesses is crucial to gaining the ticket to profit. I sincerely suggest that whether you are a novice or an expert, you should read this article I wrote today to the end, as it will definitely be of great help to you. I went from significant losses to financial freedom, achieving a 2000-square-meter villa and a Range Rover + a Porsche in Shanghai!
To achieve stable profits, these ten iron rules must be kept in mind!
1. Do not let floating profits turn into losses. Once there is more than three points of floating profit, set a protective stop loss near the opening price, ensuring no loss of capital. In the cryptocurrency market, gaining three points or more is easy, especially for small altcoins. At this time, you can slightly expand your take profit level and adopt a trailing stop loss while also implementing a protective stop loss, especially during a bear market. Regularly taking profits is essential; only then can you protect your profits from being taken away. Normal people cannot endure the feeling of turning floating profits into floating losses. Initially, feeling happy and thinking about what to do with the profits, a sudden turn of events leads to floating profits becoming floating losses. The feeling of falling from heaven to hell is unbearable for those with weak mentalities. Emotions can easily be influenced, impacting your decision-making and judgment capabilities, leading you to make foolish decisions. By the time you come to your senses, your account balance has likely also been cleared, and regret is too late.
2. Do not make small gains and suffer large losses! Just like playing baccarat, if I go in today with 100 or 200 chips and win 500, I am satisfied and withdraw. The next day, I win another 500 and withdraw again, feeling happy. By the third day, it doesn't go as smoothly; I go in and lose 500. Unwilling to accept it, I continue to gamble, wanting to win back my losses with another 500, but I end up losing 1000, wiping out the profits from the previous two days. Then, unwilling to accept it, I continue to gamble, throwing chips of 500 and 1000 randomly, ending up losing tens of thousands. This is a typical case of winning small and losing big. 2. Embrace the trend, and go with it; the buying price is not about being lower but about being more suitable. You won't gain an advantage just because the buying price is cheap; downturns do not signify bottoms. Abandon garbage coins; the trend is king.
3. In speculative markets, being adaptable is the most erroneous approach. Use your fixed trading system; in the trading system, remain unchanged to respond to changes. It doesn’t matter if you use ten thousand methods; what matters is if you use one method ten thousand times. Staying put is the best defense. Often, the time when you are most reluctant is when you make the most mistakes. Pay attention to this!
4. Patience is the foundation of making money. You may need to learn for a long time and be deceived countless times to understand the situation in the cryptocurrency market. It's okay; cherish every experience of being deceived; these are lessons on the investment journey.
5. When the coin price enters a stable rising channel, each pullback is a temporary resting point, giving us a good opportunity to board. No coin rises indefinitely; pullbacks are like compressed springs, meant to jump higher. 6. Humanly judged bottoms are generally not true bottoms but merely halfway up the mountain. The formation of a real bottom depends on emotions and funding; thus, do not blindly catch the bottom. Often, 9 out of 10 people who try to catch the bottom end up getting trapped.
7. When holding positions in profit, close positions at your psychological point without attempting to maximize profit. Also, pay attention to position size and leverage; learn to control the position strictly according to your product's leverage combined with your capital.
8. Using moving averages: short-term trading generally refers to the five-day, ten-day, and twenty-day moving averages. When the five-day moving average crosses above the ten-day and twenty-day moving averages, and the ten-day moving average crosses above the twenty-day moving average, it is called a golden cross, indicating a buying opportunity; conversely, it is called a death cross, indicating a selling opportunity.
9. A poor mentality in trading can lead to losing everything, even with millions; trading is all about mindset. Cryptocurrency trading is a psychological game, a contest of intelligence among millions; it is an intense psychological battle.
10. Finally, of course, continuously learn cryptocurrency investment knowledge to enrich yourself, summarize well every day. As the saying goes, practice is the only standard for testing truth. Only through a large number of real transactions can one truly understand the basics of trading coins.
Also, I will share a set of my own practical strategies that have achieved an average win rate of 80%. This is quite a rare achievement in the cryptocurrency trading world.
MACD (Moving Average Convergence Divergence) stands for Exponential Moving Average Convergence Divergence, created by Gerald Apple, consisting of a fast curve, a slow curve, red and green bars, and a straight line indicating the zero line. It is developed from the double exponential moving average, and the significance of MACD is fundamentally the same as that of the double moving averages, but it is more convenient to read.
Usually, the fast curve is DIF, the slow curve is DEA, and the bar chart is MACD. However, some software may label the fast line as DIFF and even label the slow line as MACD, such as the Qianlong software where the MACD indicator's fast line is DIF, slow line is MACD, and bar chart is DIF-MACD. The principle is the same despite the different names. In the following text, we will uniformly use DIF to represent the fast line, DEA for the slow line, and directly refer to the red and green bars due to the potential confusion with the indicator's name.
Let's take a look at the MACD indicator formula.
DIF = 12-day exponential moving average of the closing price - 26-day exponential moving average of the closing price.
DEA = 9-day exponential moving average of DIF.
MACD = 2 * (DIF - DEA), draw color bars.
As for the algorithm for this formula, just understand it; there is no need to delve deeply. The default parameters are (12, 26, 9). MACD itself is a trend indicator, and its sensitivity is lower than the KDJ indicator we will discuss later. Such parameters may seem to lag behind the coin price, but they also provide you with the highest safety margin.
The indicated significance of each variable in the MACD indicator
Zero line: The boundary between bullish and bearish markets. Above the zero line is a bullish market, and below it is a bearish market.
DIF and DEA: represent the short-term and long-term smooth average lines, respectively.
Red and green bars: The difference between DIF and DEA, eliminating the false signals often seen in simple moving averages while retaining their advantages.
Due to MACD's low sensitivity to coin price fluctuations, it is a medium to long-term indicator, hence its effectiveness in a consolidating market is poor.
Basic application principles of MACD.
1. MACD Golden Cross: DIF crosses above DEA, buy signal
2. MACD Death Cross: DIF crosses below DEA, sell signal
3. Red Bars: DIF is above DEA, bar chart is positive.
4. Green Bars: DIF is below DEA, bar chart is negative
5. Short to long: Due to the golden cross, DIF moves from below DEA to above, and the bars change from green to red.
6. Long to short: Due to the death cross, DIF moves from above DEA to below, and the bars change from red to green.
7. Above the zero line, it is a bullish market.
8. Below the zero line, it is a bearish market.
9. Above the zero line, a golden cross indicates a strong bullish signal, and one should actively participate.
10. Above the zero line, a death cross indicates an adjustment and pullback signal; one can appropriately reduce positions and wait. However, as long as both lines do not drop below the zero line, it indicates just a temporary pullback, not a trend reversal.
11. Below the zero line, a death cross indicates a strong bearish signal, and one should exit quickly.
12. Below the zero line, a golden cross indicates a bottom rebound signal; one can appropriately build positions and observe. However, as long as both lines do not rise above the zero line, it indicates just a temporary rebound, not a trend reversal.
13. MACD and coin price have a top divergence, generally indicating a downward reversal signal, and one should clear positions.
14. MACD and coin price have a bottom divergence, generally indicating an upward reversal signal, and one should actively increase positions.
Advantages and disadvantages of MACD.
MACD is mainly suitable for medium to long-term trends, making it easy to judge the beginning and end of a market trend, and to determine whether the market is bullish or bearish.
At the same time, because MACD is a medium to long-term indicator, the price difference between buy points, sell points, and the lowest and highest prices is relatively large.
When the market fluctuates too little or is consolidating, one should enter the market according to signals and then exit immediately, as there may be no profit between buying and selling, and there may even be a loss due to price difference or transaction fees.
When there is a particularly large fluctuation in the market within one or two days, MACD may not react in time because MACD's movement is relatively slow, leading to a certain time lag compared to market movements. Therefore, once the market fluctuates sharply, MACD will not immediately generate a signal; at this time, MACD may not be effective.
Essence of MACD
Summarized in eight words: Buy small, sell small, shrink head and foot.
Small refers to the stacks of red and green bars, shrink head and foot refers to the lengths of red and green bars.
When the coin price keeps making higher highs but the red bars keep getting smaller, it proves a top divergence phenomenon, indicating a timely selling opportunity.
When the coin price keeps making lower highs, but the green bars keep getting smaller, it proves a bottom divergence phenomenon, indicating a buying opportunity.
Buying point: green stacks are getting shorter, meaning a shrinking foot is a buy signal.
Selling point: red stacks are getting shorter, meaning a shrinking head when selling.
MACD indicator golden cross illustration:
Five types of MACD golden crosses with a high probability of rising.
1. The time interval between the formation of the second golden cross and the last golden cross should ideally not exceed 30-40 days.
2. Golden cross above the zero line, having experienced a DIF death cross with DEA within 30 trading days but has not crossed below again.
3. Generally, a golden cross above the zero line.
4. A second golden cross below the zero line is appropriate if the interval from the first golden cross is about 30 trading days.
5. Golden cross below the zero line, with red bars appearing.
Golden cross for buying, death cross for selling. In practice, we find that not every time a MACD golden cross forms does it lead to a wave of increase; sometimes, false golden crosses appear, causing misjudgments. Below, I will explain how to distinguish between true and false golden crosses.
MACD for trend analysis
It is often said to align with the trend, but often one does not clearly understand what the trend is, or does not know how to identify it, resulting in mistaking a rebound during a downtrend for a reversal and thinking a bullish market has arrived; such judgments are prone to errors, leading to losses. The simplest way to determine whether it is a bullish or bearish market is to use MACD. The DIF line in MACD can determine whether the market is bearish or bullish. When DIF is above the zero line, it is a bullish market; when DIF is below the zero line, it is a bearish market.
Type A market: DIF>0 while MACD>0;
Type B market: DIF>0 while MACD<0;
Type C market: DIF<0 while MACD<0;
Type D market: DIF<0 while MACD>0;
Type A market has the highest participation, completely in a bull market. If focusing on the medium-term market, B is better than C; if the short-term market is better than B, the medium-term investment can abandon C and D market. In a bullish market, when DIF, DEA, and MACD are all above the zero line, it indicates a strong bullish trend, while when they are all below the zero line, it indicates weakness.
Super strong: DIF>DEA>0
Next strong: DIF - DEA>0 (MACD>0)
Weak: DIF - DEA<0 (MACD<0)
Super weak: DIF
Meaning: A bottom divergence occurs, indicating that the bottom is near, and you can gradually enter the market to catch the bottom! A top divergence is the opposite.
Operation: During the first wave of sell-off, do not blindly catch the bottom; wait for the bottom divergence to appear before entering! The same applies to top divergence.
Playing in the cryptocurrency market is essentially a struggle between retail investors and market makers. If you do not have strong professional skills, you can only be cut! Those who want to layout together and harvest with market makers are welcome to discuss together with like-minded cryptocurrency enthusiasts.$RESOLV #ARDR #X平台封号 #币安HODLer空投RESOLV
