How much can top cryptocurrency traders endure? My mentor, when I first entered the crypto circle, spent 80% of the time waiting and 20% of the time executing trades. Now, he lives comfortably, fishing and playing golf, only catching a few waves of market movement each year.
I still clearly remember his sentiment that day: Life is sometimes so wonderful; when you try your best, you may not get it, but after truly letting go, results may come.
My mentor was also an old retail investor, adept at chasing highs and killing lows. After suffering significant account damage, he temporarily withdrew from the crypto circle, only to pick it back up later. Unexpectedly, he made a turnaround, and I summarized some of the sixteen key elements, sharing them with everyone.
1. Choose altcoins during bull markets, buy BTC during bear markets; this is my secret recipe!
2. Pay close attention to coins with volume at the bottom; this is a signal for a breakout, don't miss it!
3. For coins in an upward trend, the best time to buy is when they pull back to important moving averages; remember to seize the opportunity!
4. Don't trade frequently; it's enough to catch a few major trends in a year. Greed can lead to significant losses!
5. Position control is crucial; never go all-in, always leave yourself some room to cope with market changes!
6. For losing junk coins, do not average down; timely stop loss is the wisest choice, don't let yourself fall deeper!
7. News can only serve as a reference; do not blindly follow the hype; otherwise, the consequences will be your own responsibility!
8. Do not touch unfamiliar coins; focus on the field you are familiar with, only then can you be confident!
9. Don't be swayed by market sentiment; stay calm and rational to make the right decisions!
10. Altcoins that have risen too much will definitely fall; those that have fallen too much may not necessarily rise. Selection is crucial, so keep your eyes sharp!
11. When most people are optimistic, it is often when the risk arises; remember this, and don't let yourself become a bag holder!
12. Learn to stay out of positions; wait for the market to give clear signals before entering, this way you can avoid unnecessary losses!
13. Don't follow the hype; trends often come quickly and leave quickly, so don't let yourself get trapped!
14. Trading requires a personal trading system and strict execution to maintain stable returns!
15. Investment is a long-distance race; maintaining a good mindset is crucial to laughing last, don't let yourself give up halfway!
16. Investing does not necessarily mean making money; there is a high probability of losing money, so try to invest spare money. With spare money, your investment mindset will be good, and the probability of winning will increase. Remember this, and don't let yourself get into trouble because of investment!
Playing in the crypto circle is essentially a contest between retail investors and institutions. If you don't have cutting-edge news or firsthand information, you can only be cut! If you want to layout together and harvest from the institutions, you can come find me!
In a lifetime, just buy this kind of trend, from huge losses to huge profits!
This method has been practiced in my tens of thousands of trades, with a win rate of up to 98%! Last month in March, within a month, I also made 120,000U!
There are two types of engulfing patterns: bullish and bearish.
The engulfing candlestick pattern consists of two candlesticks, so it belongs to the category of double K patterns.
The structure of this pattern is very easy to identify. On the chart, the first candlestick is completely engulfed by the next candlestick. Remember, to form an effective engulfing pattern, the body of the first candlestick should be completely contained within the body of the next candlestick. Please see the example of the engulfing pattern in the chart below:
This is the manifestation of the engulfing pattern on the chart. As mentioned above, the first bearish candlestick (red) is completely engulfed by the next bullish candlestick (green). Similarly, the reverse situation is also possible. The engulfed candlestick can be bullish, while the engulfing candlestick can be bearish.
Potential of the engulfing candlestick pattern
The engulfing candlestick pattern has a strong reversal signal. If a bullish engulfing pattern forms during an upward trend, it sends us a signal indicating that a top may be forming.
Conversely, if a bearish engulfing pattern appears during a downtrend, this indicates that the price action may be forming a bottom.
Types of engulfing patterns
As mentioned earlier, there are two types of engulfing patterns: the first is the bullish engulfing pattern, and the other is the bearish engulfing pattern. Now let's understand these two types of engulfing patterns separately:
Bullish engulfing
Bullish engulfing patterns typically appear in bearish trends. It starts with a bearish candlestick on the chart, followed by a bullish candlestick that completely engulfs the previous candlestick. This pattern creates bullish potential on the chart and may reverse the current bearish trend. Please see the bullish engulfing candlestick pattern in the chart below:
Note that the first candlestick in this pattern is bearish, and it is completely contained by the next bullish candlestick's body. This forms a bullish engulfing pattern, indicating a trend reversal. An effective bullish engulfing pattern means that after a recent decline, a bullish trend may begin.
Bearish engulfing
Bearish engulfing patterns function exactly opposite to bullish engulfing patterns. Bearish engulfing patterns typically appear in bullish trends. The pattern starts with a bullish candlestick, followed by a bearish candlestick that completely engulfs the first candlestick. This creates strong price reversal potential, and the current bullish trend may turn into a new bearish trend. Now please see the bearish engulfing pattern in the chart below:
In the above image, the engulfed candlestick is bullish (green), while the engulfing candlestick is bearish (red). The body of the second candlestick completely contains the first candlestick, completing the bearish engulfing pattern on the chart. The bearish engulfing pattern may indicate that a new downward trend will begin on the chart.
Confirmation of the engulfing pattern
Confirmation of the engulfing pattern occurs on the candlestick after the pattern. It needs to break through the level of the engulfing candlestick's body to confirm the validity of the pattern.
An effective bullish engulfing pattern will be followed by a third candlestick (bullish), which breaks above the body of the engulfing candlestick. An effective bearish engulfing pattern will be followed by a third candlestick (bearish), which breaks below the body of the engulfing candlestick. As shown in the figure below, this is the manifestation of engulfing confirmation on the chart:
Note that this time we see a confirmation candlestick after the pattern. When you see this candlestick behavior after the engulfing pattern, it will confirm the validity of the pattern.
Engulfing pattern trading strategy
We have explored the structure of engulfing patterns in detail. Now, let's discuss the trading strategies related to this chart pattern.
Entry for engulfing pattern trading
The entry point for trading is usually when the engulfing pattern is confirmed. This is the third candlestick (the one after the engulfing candlestick), which should break above the body of the engulfing candlestick and move in the expected direction. When the candlestick closes outside this level, we confirm the pattern and can open the corresponding trade.
If the engulfing pattern is bearish, the price breakthrough should be below the engulfing candlestick's body. In this case, we should be prepared to short. If the engulfing pattern is bullish, the price breakthrough should be above the engulfing candlestick's body. This means we should go long.
Setting stop losses for engulfing patterns
Without exception, controlling risks should be your primary consideration in trading. Therefore, your engulfing trades must have stop losses set.
The best stop loss position in engulfing trades is outside the limits of the engulfing pattern. If the engulfing pattern is bullish, the stop loss should be set below the lower shadow of the engulfing candlestick. If the engulfing pattern is bearish, the stop loss should be set above the upper shadow of the engulfing candlestick.
The above image shows how to set stop losses when trading bullish and bearish engulfing patterns. If the price fails to move in the expected direction and triggers the stop loss, this proves that the trading assumption is wrong, while protecting your funds from minimal loss.
Setting profit targets for engulfing patterns
A rule of thumb is that engulfing trades should be held at least until the price volatility equals the size of the pattern. This means the minimum profit target pursued from the engulfing pattern should equal the distance between the upper and lower shadows of the engulfing candlestick.
When the price movement reaches this distance, you can choose to close all or part of your position. If you choose to continue holding part of the position, you need to carefully observe the price movement to look for potential exit opportunities. This includes support/resistance breaks and trend or channel breaks. Charts and candlestick patterns are also very important here. If you find chart/candlestick patterns that contradict the current trade, you may need to close the position.
Engulfing patterns and price action strategies
Now let’s illustrate price action-based trading strategies combined with engulfing patterns. Please see the chart below:
The above image is the hourly chart of GBP/USD (British Pound / US Dollar) from January 1 to January 5, 2016. The chart depicts a bearish engulfing pattern and its trading rules.
The chart starts with a price rise, marked by the green arrow. You will notice that the price movement only forms a bullish candlestick. Suddenly, we see a relatively large bearish candlestick that completely engulfs the previous candlestick. This confirms the presence of a bearish engulfing pattern on the chart.
However, in this case, we need to see a confirmation candlestick before we can consider opening a position. The next candlestick on the chart is again bearish, and its closing price is below the body of the engulfing candlestick. This is the confirmation required for trading based on the bearish engulfing pattern. The stop loss for this trade should be set above the upper shadow of the engulfing candlestick, as shown in the image above.
The yellow arrows in the chart show the size of the pattern and how to apply the minimum profit target on the chart. This target is achieved in the next candlestick that appears after the engulfing confirmation.
This trade can be extended for more profit. You can use price action rules to determine the final exit signal. You will notice that the GBP/USD price formed two large bearish candlesticks on the chart, which would double the trading profit. However, the next candlestick on the chart is a hammer reversal pattern, also known as a Pin Bar, which has strong bullish potential. When the hammer pattern is confirmed, the trade should be closed. As you can see, the next candlestick is bullish and breaks above the level of the hammer pattern. This confirms the validity of the hammer reversal, generating an exit signal to close short positions. Bearish engulfing trades should be closed upon the closing of the bullish candlestick after the hammer pattern, as indicated by the second red arrow in the chart above.
This example shows how price action rules help find the most suitable exit points on the chart.
Engulfing patterns with support and resistance
Another effective trading engulfing pattern with price action is to identify the pattern at key support and resistance levels.
If the price approaches the resistance zone while a bearish engulfing pattern appears on the chart, this will create very strong bearish potential on the chart. Conversely, if the price approaches the support level while a bullish engulfing pattern appears on the chart, this will create very strong bullish potential on the chart.
These situations provide a high probability of success for trading. Many times, when you enter at the right time in a technical convergence, you can enter early into emerging trend reversals. Now let's see how to combine the engulfing pattern with support and resistance levels:
The above image is the hourly chart of USD/CHF (US Dollar / Swiss Franc) from February 19 to February 24, 2016. This chart shows another bearish engulfing trade, which occurred after the price withstood the psychological resistance level.
The black horizontal line in the chart is a very strong psychological resistance level at the USD/CHF parity ratio of 1.0000. After a strong price increase, USD/CHF encountered this resistance and subsequently tested it twice. On the third test of this resistance, the price formed a relatively large bearish candlestick that engulfed the previous bullish candlestick. This created a bearish engulfing pattern on the chart.
Confirmation of bearish engulfing occurs on the next candlestick, which is bearish and breaks below the body of the engulfing candlestick. The closing of the confirmation candlestick provides a short entry signal.
The stop loss should be set above the upper shadow of the engulfing candlestick, that is, slightly above 1.0000.
After that, the price begins to decline. Then the minimum profit target of the pattern is reached (as indicated by the yellow arrow). You can close part of the position here and keep some of the position in hopes of further price decline.
Note that USD/CHF continues to form lower highs and lower lows during the decline, providing confidence for the downtrend. Suddenly, the price movement begins to consolidate, and we marked the upper limit of the range with a thin black horizontal line. Once the price breaks this resistance and closes above, the trade should be closed immediately. As you can see, this creates a higher top on the chart, indicating that the bearish trend may be interrupted.
Combining support and resistance levels with engulfing patterns is a very excellent price action-based trading method.
Let's look at an example of a bullish engulfing pattern for EUR/USD: as you can see, the bullish engulfing candlestick pattern exists, indicating a possible buying opportunity.
The above trade is executed through the following steps:
1. Confirm the bullish engulfing pattern.
2. Execute buy at 1.1301 after confirming the pattern.
3. Based on a 1:2 risk-reward ratio, the profit target is set at 1.1347.
4. The stop loss is set below the lower shadow of the second bullish candlestick at 1.1278.
Engulfing candlestick pattern: advantages and disadvantages
Bullish and bearish engulfing candlestick patterns each have their own advantages and disadvantages, as shown in the chart below:
Summary
The engulfing candlestick pattern is a double K pattern. It consists of two candlesticks, where the second candlestick completely engulfs the previous candlestick, including the shadows. The engulfing candlestick pattern has strong reversal potential. We identify two types of engulfing candlestick patterns:
Bearish engulfing: can be found at the end of an upward trend. It starts with a bullish candlestick, followed by a larger bearish candlestick that completely engulfs the first candlestick in the pattern. This creates bearish (reversal) potential on the chart.
Bullish engulfing: can be found at the end of a downtrend. It starts with a bearish candlestick, followed by a larger bullish candlestick that completely engulfs the first candlestick in the pattern. This creates bullish (reversal) potential on the chart.
Confirmation of the engulfing pattern occurs on the next candlestick on the chart:
If the engulfing pattern is bullish, the next candlestick should be bullish, and its closing price should be above the body of the engulfing candlestick.
If the engulfing pattern is bearish, the next candlestick should be bearish, and its closing price should be lower than the body of the engulfing candlestick.
Here are three basic rules for engulfing trading:
Open a trade when the price confirms the candlestick closing.
Set stop loss orders outside the opposing side of the engulfing pattern.
Keep the minimum price movement in trading equal to the size of the engulfing pattern, or extend the trading time using price action rules.
The high-probability price action method for trading bullish and bearish engulfing patterns is to look for the pattern to appear at important support and resistance levels.
It took me five years to grow from 50,000 to over 36 million, experiencing thousands of days and nights reviewing and drawing over 800 charts, summarizing the secrets to making money in the crypto circle: (trend trading)
Today, I'm selflessly sharing with everyone; the method is very simple and practical, even beginners can start immediately. It is recommended to directly follow and save.
Trend trading refers to the trading method of following the market trend when prices are strongly rising or falling. Different traders may have different definitions of a trend.
For example, a trader who prefers high volatility varieties may only consider that variety in an uptrend when the price increases by 20% or more.
A low-volatility trader may only need minor price fluctuations to consider a trend to be forming.
Regardless of the time frame or strategy, the goal of trend trading is to identify trends and find ways to join the trend with the lowest risk. To this end, this article will discuss several trend trading strategies and reveal how to find trending stocks.
First, let's talk about how to discover trends.
Trend trading indicators
The fewer subjective views you have of the market while trading, the better. Thus, you can use technical indicators to judge market trends.
Trend line
Trend lines are a good way to clearly define market trends. Although there is still some subjectivity in this, as you need to identify the starting and ending points of the trend line, with some practice, you should be able to identify key support and resistance points, thus clarifying the trend.
For a bullish trend, you need to connect the lows and highs to form an ascending channel. After all, a bullish trend can only be confirmed when you have a series of higher lows (HL) and higher highs (HH).
When the market is in an upward trajectory, the price should not fall below previous lows.
Similarly, for bearish trends, simply reverse the lows and highs.
Note that the two charts above are actually the same stock, just in the reverse trend of intraday trading. Trends can help reveal the direction of your trade. The advantage of trend lines is that as you continue to draw trend lines, your eyes will gradually train to become more sensitive, thus predicting the direction of stock movements.
This helps to set targets and reversal points during your trading process.
Trend channel
Furthermore, you can use trend channel drawing tools. These channels will create a clean parallel line. However, these channels will not allow you to create wedge patterns or diamond patterns.
Generally, trend channels work best with large-cap stocks: these are companies with larger market capitalization and more liquidity.
Slope of the line
Another point to note is that you need to identify the minimum slope of the line, which will trigger the formation of a trend.
Strong trends usually have a slope of over 50 degrees, thus forming strong upward momentum.
This is completely subjective. Nevertheless, if you are trend trading, the trend should be strong enough to catch your attention.
Moving average
Moving averages are another excellent indicator you can use to measure trend strength.
On larger timeframes, you can use a simple method to observe whether the price is above or below the 200-day moving average. However, another method is to look for strong trends, during which the averages do not cross during the uptrend. The spacing between the averages indicates that the stock is in a strong uptrend across all periods (short-term and long-term).
To further illustrate this, we can filter out stocks where the 20-day, 50-day, and 200-day moving averages overlap on the daily chart. In other words, the 20-day moving average is above the 50-day moving average, and the 50-day moving average is above the 200-day moving average.
This tells us that short-term moving averages are above long-term moving averages, indicating an upward trend. Of course, the opposite indicates a downward trend.
Example of an uptrend
From the above chart, you can see that the purple 20-day moving average is significantly above the red 50-day moving average. Moreover, below, the 200-day moving average is also sloping upwards.
These three moving averages are neatly arranged, giving a strong signal that the trend is very strong.
Non-trend example
Now you know what a strong upward trend looks like, pay attention to the difference between GOOGL and XNCR trends.
Look, the market has a lot of fluctuations, right?
The above chart has two moving averages, the 10-day and 20-day exponential moving averages (EMA). You can see the backtesting between the 10-day and 20-day moving averages, which clearly indicates that the stock price is not in a strong trend.
Example of a downtrend
ABIO experienced a significant sell-off after reaching a peak of around $18. Since then, the stock price has never recovered.
The above chart clearly shows a strong decline in stock prices. Notice that the moving averages did not cross at all during the decline. To enhance the effectiveness of the trend, the moving averages always maintain a large gap during the downtrend.
It should be noted that such trends are difficult to find. You certainly don't want to be on the wrong side. Unfortunately, some sell-offs do not provide pullbacks, thus failing to offer opportunities for low-risk entries.
Momentum oscillator
Another indicator you can use to analyze the market is the momentum oscillator. These indicators have no upper or lower limits, allowing the oscillator to fluctuate with stock price movements.
The TRIX indicator (Triple Exponential Smoothing Average) is a momentum oscillator that fluctuates above and below the zero line. In the next chart, we will discuss a stock in a strong downtrend.
As this stock continues to decline, notice that the TRIX has remained almost entirely below the zero line.
It is worth noting that TRIX does not react quickly, as it smooths three exponential moving averages, making it a good indicator for measuring trends.
Observe how TRIX consistently stays below the zero line when stock prices decline. It is important to remember that this does not mean TRIX will not occasionally slightly break above the zero line.
Remember that in the market, price action rarely perfectly fits the frameworks outlined in technical analysis books.
More trend trading examples
In our first example, we see a stock that is clearly in a downtrend. You can see that the stock is forming lower lows and lower highs.
Next, we have a strong bullish uptrend, forming higher highs and higher lows.
I hope these examples help you see different trends. Here's another one:
Can you see that the above chart lacks any trend? This is what we call a sideways market, or securities lacking a clear trend. Most of these stocks are in a range-bound fluctuation.
Reasons for trend trading failure
Trend trading, like any other strategy in the market, will never have a 100% success rate. Usually, a bullish trend will fail when prices peak, break through their channel, or supply becomes too heavy.
Conversely, when prices plunge or demand finds support, the downward trend will end.
The key is to study trends and find consistency between volume and price action.
Not following stop loss
When you trade a stock that is in trend, you feel very good. You don't need to do much, and money will continuously flow into your account. However, if you buy trending stocks at the moment of reversal, you may find yourself in trouble.
This is because entering too late may lead to a terrible reversal, and the stock price eventually falls back to the starting point.
Therefore, you must use stop losses; otherwise, trend trades will turn into your worst nightmare.
If you find yourself buying at the top of a strong trend, do not add to your position, as this violates the principle of buying at each low point. This practice is called averaging down and may have devastating consequences.
In the above chart example, we pointed out what happens if you buy support in a strong upward trend channel and the trend fails.
As you can see, if you did not set the stop loss below the tested low point, things can quickly become very bad.
Strategy for joining the trend
Now that you know what to avoid, let's look at several strategies to help you smoothly join the trend.
1. Moving average pullback
In a strong trend, prices often pull back to important moving averages such as the 20-day or 50-day moving averages. These pullbacks, if the price continues to rise, usually provide a good opportunity to join the trend while keeping risk low.
Because institutions like to buy at lower prices, prices often find support at these levels.
Let’s take the above GOOGL example and see how buying near the 50-day moving average was an excellent decision.
In the GOOGL chart, we saw three good pullback buying opportunities, all near the 50-day moving average, marked by arrows in the chart. Each buy was a great profit opportunity.
If the trade is unsuccessful, you can set the stop loss below each consolidation range to control risk.
2. Mean reversion trend trading
If you don't like using moving averages, sometimes channels can be more effective. We removed the moving averages from the GOOGL chart and this time added a channel.
Note that the buying point corresponds to the lower point of the channel, while the selling point corresponds to the breakout of the upper point of the channel.
This can be a very simple and effective way to manage short-term positions. Essentially, you buy on support pullbacks and sell at highs.
The key to trend trading lies in your entry point, stop-loss and chosen trading method. Whether using moving averages, channels or oscillators, you need to master each method to develop your own edge.
The biggest difficulty in trading is not anything else, but the fear of losing money!
How to overcome the habit of being afraid of losing money?
The great philosopher Russell once said: The fastest way to overcome your fear is to do what you are afraid of. Aren't you afraid of losing money? Then go do deliberate practice of losing money.
Step 1: Prepare 100U
Step 2: Lose this 100U within a week. But this does not mean you should trade blindly; you cannot open positions carelessly, cannot blindly increase leverage, cannot get liquidated, must strictly set stop losses, and must execute according to the opportunities within your trading system.
Aren't you afraid of losing money? Don't you not trust your trading system?
Come on! The best way to eliminate fear is to face it, so go ahead and lose! This 100U is what you use to lose; if 100U is not enough, then come back for another 100U. When you feel numb to losses, that's when you've succeeded. At that time, you will understand what I often say: 'Losing money is normal, missing out is also normal; only by accepting this can making money also become your normal.'
Only through repeated losses and battling yourself can you transform and overcome the fear of losing. From now on, whether holding positions or entering trades, you will do so without hesitation.
Let me tell you in secret, if you really do what I said above, the outcome is very likely not to lose everything, and you may even double your capital.
So by that time, you will unconsciously want to increase your capital investment, but when you go all-in with 1000U or 10000U
You will find that your old problem has returned: what to do if you are still afraid of losing money?
Question 1: What to do if you are still afraid of losing money?
Adjust your position to a suitable size
Question 2: What is the appropriate size?
A position that allows you to sleep well at night
Question 3: When can I increase my position?
When you can still sleep well after increasing your position size.
However, please note! The deliberate practice method I just taught requires you to have your own trading system. If you don't even have a trading system, then you are not qualified to be afraid of losing money!$ARDR $BMT #币安HODLer空投HOME #币安HODLer空投RESOLV
