I went from 50,000 to a profit of 10 million, then back to a debt of 8 million, then to a profit of 70 million, achieving financial freedom. In the past two years, from December 23, 2021, to August 6, 2023, I turned less than 500,000 into a 418134.86% return, effectively making over 29 million. I want to share some practical advice for those just entering the crypto space!
My method of trading cryptocurrencies is very simple and practical. I turned 50,000 into an 8-digit figure in just a year, relying solely on 11 chart patterns, entering trades only when opportunities arise, and not trading without a pattern. I've maintained a win rate of over 90% for five years!
I spent 5 years checking 400 charts every night, turning 50,000 into 18 million, relying entirely on 11 chart patterns, achieving a winning rate of as high as 100%, winning every battle.
Through my own practice, I managed to achieve a winning rate of 100%. I've organized this over the past few days and am now sharing it with those destined to learn and master it—definitely worth keeping!
1. Cup and Handle Pattern:
The cup and handle pattern is an adjustment formation that follows a strong rise in stock. Generally, a stock will experience about 2 to 4 months of intense fluctuations, followed by a market adjustment. During the pullback, the stock will encounter selling pressure, dropping approximately 20% to 35% from the previous high, with the adjustment period typically ranging from 8 to 12 weeks, depending on overall market conditions.
When stock prices rise and attempt to challenge previous highs, they will face selling pressure from those who bought at or near the previous high. This selling pressure will lead to price declines and sideways consolidation, typically lasting from 4 days to 3 weeks.
The handle part is usually 5% lower than the previous high point; if it is a lower handle, it usually indicates a defective stock, which also means a higher risk of failure.
The buying opportunity for this stock is when it reaches a new high at the top of the handle, not when it touches the previous high point from 8 to 12 weeks ago.
This is one of the best and most reliable formations. It's important to note that the best stocks with this formation typically appear at the beginning of market trends after significant adjustments, rather than during or at the end of a major market rally.
2. Flat Bottom:
A flat bottom is a chart pattern that moves horizontally over any time span. This pattern can achieve very strong upward movements; we look for instances when the stock price remains at a horizontal or roughly the same level and volume declines. Draw a trendline at the top of this flat bottom, and buy when the price breaks above the trendline with increased volume.
3. Ascending Triangle:
The ascending triangle is a variant of the symmetrical triangle, typically regarded as the most reliable bullish formation in an uptrend. The top of the triangle is flat, while the bottom slopes upward.
In an ascending triangle, stocks become overbought, and prices reverse downwards. Subsequently, buying pressure re-enters the market, quickly pushing prices back to historical highs, which then recede again. Buying pressure will reappear, although prices will be higher than before. Prices eventually break through previous highs, pushing higher with new buying pressure.
In the case of a symmetrical triangle, a breakout is usually accompanied by a significant increase in trading volume.
4. Parabolic:
Parabolic patterns may be one of the most revered and sought-after patterns, allowing you to achieve the maximum and fastest returns in the shortest time. Generally, you will find such patterns at the end or near the end of a major market rally, where the pattern results from a breakout after multiple bases.
5. Wedge:
The formation of a wedge also visually resembles a symmetrical triangle because the trendlines intersect at their vertex. However, the distinction of a wedge is its obvious slope, with both sides sloping. Like triangles, volume should decrease during the formation of a wedge and increase during its dispersion. Below is a typical wedge trend pattern:
A descending wedge is usually considered bullish and typically appears in an uptrend. However, it can also appear in a downtrend, meaning that overall it is still bullish. This chart pattern consists of a series of lower highs and lower lows.
An ascending wedge is usually considered bearish and typically appears in downtrends. They can also be found in uptrends but are still generally viewed as bearish. An ascending wedge consists of a series of higher highs and higher lows.
6. Channel:
Channel patterns are generally regarded as continuation patterns. They are zones of indecision, typically moving in the direction of the trend.
Of course, trendlines move parallel in rectangular zones, indicating that current supply and demand are nearly balanced. Buyers and sellers seem to be evenly matched. The same 'high points' are constantly challenged, while the same 'low points' are also repeatedly challenged, with the stock oscillating between two clearly set parameters.
Although volume does not seem to be affected as much in other patterns, it usually decreases within the pattern, but, like other stocks, volume should significantly increase at the breakout.
7. Symmetrical Triangle:
A symmetrical triangle can be described as a zone of indecision, where the market stagnates and future directions are questioned. Usually, the supply and demand forces at that time are considered almost equal.
Buying pressure pushing prices up quickly encounters selling pressure, while price declines are seen as opportunities to buy low.
Each new lower high and higher low tends to narrow compared to the previous ones, forming the shape of a sideways triangle. (During this time, the volume shows a declining trend.)
Ultimately, this indecisiveness will end, typically leading to an explosion from this formation (usually under large trading volumes).
Research shows that symmetrical triangles overwhelmingly reverse in the direction of the trend. In my view, symmetrical triangles are very useful chart patterns and should be traded as continuation patterns.
8. Descending Triangle:
A descending triangle is also a variant of a symmetrical triangle, usually considered bearish and often appears in downtrends.
Unlike ascending triangles, the bottom of this triangle appears flat. The top side of the triangle slopes downward. Prices will drop to an oversold level, followed by tentative buying at the bottom, leading to a price rebound.
However, higher prices attract more sellers, continuously challenging previous lows. Next, buyers tentatively re-enter the market, but the rising prices once again attract more sellers. Ultimately, sellers gain control, breaking below the previous lows of the pattern, while the earlier buyers rush to sell their positions.
Like symmetrical and ascending triangles, trading volume tends to decrease during the formation of the pattern, only to expand at the moment of breakout.
9. Flags and Pennants:
Flags and pennants can be classified as continuation patterns; they typically represent short pauses in dynamic stocks, usually occurring after a rapid and significant increase, where the stock often rises again in the same direction. Research shows these patterns are relatively reliable continuation patterns.
1. The characteristics of a bullish flag are lower highs and lower lows, with the slope direction opposing the trend. However, unlike wedge lines, their trendlines are parallel.
2. Bearish signals consist of higher highs and higher lows; 'bear market' flags also tend to slope against the trend. Their trendlines are also parallel.
The triangular flag looks very much like a symmetrical triangle, but the triangular flag pattern is usually smaller in size (volatility) and duration, with volume typically contracting during the stagnation period and expanding at the breakout.
10. Head and Shoulders:
The head and shoulders pattern is generally considered a reversal pattern and is the most reliable when appearing in an uptrend. Eventually, the market begins to slow down, and the forces of supply and demand are widely regarded as balanced.
Sellers unload at the high (left shoulder), beginning a tentative decline. Buyers quickly return to the market, eventually pushing prices to new highs (the head). However, the new high quickly retracts, facing another test of decline (the neckline continuation). Tentative buying reappears, and the market rebounds again but fails to break the previous high (the last peak is considered the right shoulder).
Volume is very important in the head and shoulders pattern. Volume typically follows the price rise of the left shoulder. However, the head forms with decreasing volume, indicating that buyers are no longer as aggressive as before. The volume of the right shoulder may be even smaller than the head, indicating that buyers may be exhausted.
New sellers enter while previous buyers exit. When the market breaks the neckline, the chart becomes complete. (Volume expands at the breakout.)
11. Inverted Head and Shoulders:
The chart of the head and shoulders pattern can sometimes be inverted. The inverted head and shoulders pattern usually appears in a downtrend. Its volume characteristics are noteworthy.
1) The inverted left shoulder should be accompanied by increasing volume.
2) The inverted head should form on smaller volume.
3) However, the rebound from the head should show greater volume than from the left shoulder.
4) The volume at the inverted right shoulder should be the smallest.
5) When the price rebounds to the neckline, the volume should increase significantly.
New buyers enter while previous sellers exit. When the market breaks the neckline, the chart becomes complete. (Volume increases at the breakout.)
Playing in the crypto space is essentially a struggle between retail investors and market makers. Without insider information or first-hand data, you can only be cut! If you want to work together to plan and harvest from the market makers, come find me!
In the early years of trading cryptocurrencies, like many others, I stayed up late monitoring the market, chasing highs and cutting losses, losing sleep over my losses. Later, I gritted my teeth and stuck to a simple method, surprisingly surviving and slowly starting to stabilize my returns.
Looking back now, although this method seems simple, it works: 'If I don't see the signals I'm familiar with, I won't act!'
Better to miss the market than to place random orders.
Relying on this iron rule, I can now stabilize my annual returns above 50%, no longer living on luck.
Here are some advice for beginners, based on my experiences learned from real losses:
1. Only trade after 9 PM.
During the day, news is too chaotic, with various fake positives and negatives flying around, leading to erratic market movements that easily trap you into trades.
I usually wait until after 9 PM to operate; by then, the news is generally stable, and the candlesticks are cleaner with clearer directions.
2. Once you make a profit, immediately secure it.
Don't always think about doubling your money! For example, if you earned 1000 U today, I suggest you immediately withdraw 300 U to your bank card and continue to play with the rest.
I've seen too many people who 'made three times and wanted five times', only to lose it all in a single pullback.
3. Watch the indicators, not your feelings.
Don't trade based on feelings; that's reckless.
Install TradingView on your phone and check these indicators before trading.
MACD: Is there a golden cross or death cross?
RSI: Is there overbought or oversold?
Bollinger Bands: Is there a contraction or breakout?
At least two out of three indicators must give consistent signals before considering entering.
4. Stop-loss must be flexible.
When you have time to monitor the market, manually raise the stop-loss price, such as if your purchase price is 1000 and it rises to 1100, then raise the stop-loss to 1050 to secure profits.
But if you're going out and can't monitor the market, be sure to set a hard stop-loss at 3% to prevent sudden crashes from wiping you out.
5. Must close positions weekly.
Not withdrawing profits is just a numbers game!
Every Friday without fail, I transfer 30% of my profits to my bank card and let the rest continue to roll over. Over the long term, this way, my account will keep growing.
6. There are tricks to reading candlesticks.
For short-term trading, look at the 1-hour chart: when the price shows two consecutive bullish candlesticks, consider going long.
If the market is stagnant, switch to a 4-hour chart to find support lines: consider entering when it approaches the support level.
7. Be sure to avoid these pitfalls!
Leverage should not exceed 10 times; beginners should ideally keep it within 5 times.
Avoid coins like Dogecoin and Shitcoin; they are easy to be harvested.
At most, make 3 trades a day; too many can lead to losing control.
Absolutely do not borrow money to trade cryptocurrencies!
A final word for you:
Trading cryptocurrencies is not a gamble; treat it like a job. Work regular hours, turn off the computer when the time is up, eat when it's mealtime, and sleep when it's bedtime. You will find that your trading becomes more stable.
The 3-step 'pullback confirmation' rule easily avoids liquidation traps, boosting your profit rate to 90%!
In the crypto space, a realm filled with magical realism, some become rich overnight while others leave in despair. Today, I want to talk not about metaphysics or 'wealth codes', but about a hardcore technique that can instantly elevate your trading strategy—the 'pullback confirmation' rule.
Step one: Learn to 'read the lines' and find your 'golden ratio'.
The candlestick charts in the crypto space are like electrocardiograms, hiding countless secrets between rises and falls. The so-called 'pullback' is when prices retract after breaking key levels, testing support like a spring. At this time, you need to keep an eye on two lines: the moving average and the trendline.
Moving averages reflect the market's average cost; if the price retraces to the moving average without breaking below, it's like a diver lightly tapping the springboard, often leading to a second surge after gathering strength.
The trendline represents the boundary between bulls and bears; when the price pulls back to the trendline and rebounds, it indicates that the main capital is quietly positioning.
Remember, 'a bearish candle on the line is an opportunity, a bullish candle below is a trap.'
Step two: Wait for the 'confirmation signal', don't be an impatient retail trader.
Confirmation signals after a pullback are like 'the other party is typing' during a date—exciting yet requiring patience. There are two key indicators here:
Volume contraction during a pullback: when prices retrace, decreasing volume indicates reduced selling pressure, meaning the main force hasn't fled.
Indicator resonance: MACD golden cross, RSI leaving the oversold zone, and other technical indicators synchronously signaling bullishness, this is the true 'timing and location'.
If the market is in a panic during a pullback, and you notice the price 'can't drop any further', congratulations, this might be the main force putting on a sad show, just waiting for you to hand over your chips.
Step three: Position management, be a 'bad boy' trader.
Even with a perfect pullback confirmation, remember: 'Love may not disappear, but money will.'
Initial probe: Use 10%-20% of your position to test the waters, avoiding all-in bets that can lead to being harvested in reverse.
Add to your position in batches: as the price moves in the expected direction, gradually add to your position, like cutting a steak into smaller pieces to savor.
Stop-loss iron rule: set a stop-loss line of 3%-5%. Once it breaks, exit immediately; don't fall in love with the market.
Finally, let's say something poignant.
There is no guaranteed profit secret in the crypto space, only a game of probabilities. The essence of the pullback confirmation rule is to use rules to combat human nature—stay calm when others panic, and restrain yourself when others get excited.
