I once thought I was an unafraid captain in the sea of cryptocurrencies until that '312 black swan' made me sink. A position of 12 million was wiped out in half an hour; the cold touch of the phone screen remains unforgettable.
But despair is often a catalyst for wisdom. Suddenly realizing that the essence of contracts is probabilistic gaming. Using the remaining 800,000 capital, combined with the 'dynamic hedging model', I achieved an asset leap to 2.18 million in 60 days this February, with a growth rate of 272,900%!
In the cryptocurrency space, learning to dance with risk is the true way to survive. A true expert may not necessarily have superior skills; I have always strictly followed the iron laws of the market.
Practical trading tips in the cryptocurrency space! Understand candlesticks, even novices can accurately enter the market.
After years of navigating the cryptocurrency space and stepping into countless pitfalls, I understand: to truly reap the benefits, K-line analysis is an unavoidable core skill! Today I share my practical experience without reservation; I recommend liking and bookmarking this for future reference.
1. Trend is king! Instantly see the market direction.
Uptrend: Multiple consecutive green candlesticks with closing prices continuously making new highs indicate strong bullishness; trading long in accordance with the trend has a higher success rate.
Downtrend: Multiple consecutive red candlesticks with closing prices consistently declining; shorting at this time is a wise choice.
Reversal signals: hammer candlestick, inverted hammer, morning star, engulfing patterns... These classic candlesticks often serve as 'traffic lights' for trend reversals; seizing them is an opportunity.
2. Identify key points, entering without confusion.
Support level: a 'lifeline' where prices rebound after multiple declines. When the price approaches the support level, combined with bullish patterns like the hammer candlestick, decisively buy! Resistance level: a 'ceiling' where prices fall back after multiple increases. If a hanging man pattern appears, immediately short and exit.
Three: Look at both volume and price to uncover the market's true intentions.
Price increase with volume: price rises, trading volume synchronously expands → strong buying pressure, strong bullish signal.
Price drop with volume: price falls, trading volume surges → selling pressure surges, decisively short to hedge.
4. Classic candlestick patterns, accurately locking in buy and sell points.
Pattern, Characteristics, Operation
Hammer candlestick: at the bottom of a downtrend, with a long lower shadow (≥ twice the body); buy at the bottom to go long.
Inverted hammer: shadow above, resembling an inverted 'hammer', reversal to go long.
Three white soldiers: three consecutive bullish candlesticks, each closing price making a new high; chase the trend to go long.
Bullish engulfing pattern: a long bearish candlestick followed by a small bullish candlestick (completely engulfs); indicates a bottoming out, go long.
5. Indicator resonance, doubling the success rate.
Moving average golden cross: 5-day moving average crossing above the 10-day moving average → trend strengthening; enter to go long.
MACD golden cross: the short-term line crosses above the long-term line → bullish breakout, follow along to reap profits.
6. The life-saving rule: Poor risk control renders profits meaningless.
Set stop losses: Set a stop-loss point when entering (usually outside support/resistance levels) to avoid a crash and liquidation.
Position management: Each trade should not exceed 10% of total capital; diversify investments; survive to laugh last.
Lastly, a reminder: K-line analysis is not a universal formula; it needs to be flexibly judged in conjunction with news.
From liquidation to turning the tables! 16 iron rules for trading cryptocurrencies will have you completely bidding farewell to the life of a retail trader.
1. Bull and bear strategy: Grab altcoins aggressively in a bull market and cling to BTC in a bear market; this is the golden rule for traversing cycles!
2. Volume warning: A sudden increase in volume at the bottom of a coin is the market's 'startup alarm'; keep an eye on it and don't blink!
3. Moving Average Sniping: When an upward trend coin retraces to a key moving average, act decisively; this is a picking opportunity given by heaven!
4. Trading restraint: Don't be a 'trading maniac'! Catching a few big trends a year is enough; too much greed leads to downfall!
5. Position red line: Never go all in! Save bullets to mount a counterattack when the market changes suddenly.
6. Stop-loss decisiveness: Don't average down on junk coins! Cutting losses promptly is a stop-loss; it is also a lifeline to preserve your capital.
7. Be wary of rumors: It's okay to listen to whispers, but blindly following trends? You might find yourself buried in a pit in no time.
8. Focus on the sector: Don't touch unfamiliar coins! Deeply cultivate familiar sectors to accurately grasp profits.
9. Emotional management: Stay calm when the market is crazy, and remain composed during market panic; don't let emotions dictate your wallet!
10. The truth about altcoins: Altcoins that rise a lot will inevitably fall, but those that fall a lot may not rise; choosing coins wisely is more important than luck!
11. Reverse thinking: When everyone is frantically entering the market, danger is quietly approaching; don't be the last one holding the bag!
12. Wisdom of holding cash: Learn to wait in cash! When market signals are unclear, cash is the safest asset.
13. Avoiding hot spots: Don't chase fleeting trends! Blindly following the hype will only trap you!
14. System is king: Build a dedicated trading system and strictly execute it; this is the core code for stable profits!
15. Mentality is key: Investing is a marathon; stabilize your mindset and don't rush; the last one laughing is the winner!
16. Funding bottom line: Don't trade with life-saving money! Use spare cash for investment; with a stable mindset, the success rate will naturally soar!
Profit comes from persisting in the trend trades that others give up, seizing opportunities that others don't want, and doing what others dare not do. Investment only involves giving up due to insufficient persistence; there is no complete failure. Trading is the same; initially confident in a direction, but with market fluctuations changing the original direction—originally bearish, but exiting to go long just because the market rose slightly—ultimately wasting both the downtrend and causing losses. Such examples are numerous in trading; any success requires persistence.
Becoming a highly defensive trader is a key transformation for novice traders in their trading journey. Many beginners may be misled by a desire for quick success at first; they want to earn profits quickly, even trading with a 'get rich overnight' mentality. However, a more realistic and practical mindset should be: maximize the protection of your capital. These two mindsets cannot coexist; if you focus only on quick profits, your capital is likely to be lost even faster.
A rule from the sports arena also applies to trading: offense is the best defense. In this context, it means trading only under favorable conditions, while protecting funds and staying away from the market at other times. Beginners may achieve success in the first few trades by luck, but luck cannot last, and you should be wary of the 'beginner's effect' trap.
Imagine, if you held a gun, you wouldn't easily waste bullets unless you were absolutely sure you could hit your target. The same principle applies to trading; preserve capital strength and only strike when a truly favorable opportunity arises. In trading, maximizing capital protection is the key to success. As long as you can effectively control risks, even when encountering strong entry signals but ultimately failing, the impact on capital can be controlled within a reasonable range.
Frequently checking charts and constantly monitoring trades can often have an adverse effect on trading. In life, too much interference rarely yields good results. If you constantly try to over-control trading, the result may be counterproductive, bringing you more trouble.
Have you ever unconsciously increased your position or exited a trade early due to over-focusing on the charts? Looking back, did you feel it was too impulsive at that time? Such unplanned behavior is often one of the reasons many people incur losses.
The simplest way is to set a trading plan and then forget it. This is a principle I often emphasize to beginners and one of the most valuable experiences I've gained: the less you interfere with your operations in trading, the better. Simply follow your trading plan and let trading proceed as planned; that is real trading wisdom.
The outcome of the previous trade should not affect the next trade. The result of the last trade should not influence the next trade. This is an extremely important principle, yet many people often forget it. They can easily be swayed by the result of the last trade. However, it is important to understand that each trade is unique, and trading...
The outcome is randomly distributed. Suppose you have made 100 trades, the gains and losses may be very close. However, their distribution cannot be so uniform. It is possible that 5 or 10 consecutive trades are all losses, and if these losses affect your mentality, then the subsequent profit opportunities may also be hindered by your emotional state.
It is also important to note that after experiencing profitable trades, excessive confidence can have a negative impact on trading, just like the fear following losing trades. Overconfidence makes people more willing to take on excessive risks; in the long run, its negative effects can be quite frightening. Therefore, maintaining calm during trading, not being swayed by short-term trade results, is key to maintaining a stable mindset and achieving long-term success.
Simplify trading, you will gain more.
In trading, moderation is key. Many common mistakes made by traders involve overdoing things. They overanalyze the market, overinterpret signals, overthink, and overtrade, generally doing many unnecessary things. As a trader, learning to be appropriately 'lazy' is equally important.
First, it is important to clarify that over a period of time, favorable signals that appear in the market are limited or even rare. Most of what you see or hear may just be 'market interference', which is noise and not helpful to you. Learn to filter these signals and then select the truly beneficial 'quality signals'; this is a routine step in searching for opportunities.
Secondly, I suggest you learn the mindset of hedge fund traders when trading. They manage millions or even billions of dollars but trade very principled, like picking diamonds from sand, choosing only the highest return opportunities. For those 'maybe', 'seems like' signals, it's better to stay away. In my 20-plus years of trading experience, the best trades are always the most obvious and intuitive ones.
Before entering a trade, have a clear exit plan.
In trading, no one tells you what to do. You must create your own rules, which means you must be responsible for your actions. Many people lack this self-control, leading to often losing their trading direction.
One of the most important tasks before trading is to determine the exit plan. It took me several years to realize that exiting is more important than entering. I observed that many people exit based on whim, resulting in either minimal profits or substantial losses. Establishing a strict profit and loss plan is the best approach. Such a plan can provide you with clear guidance, enabling you to remain calm and execute the plan regardless of whether you are making a profit or a loss. This disciplined exit plan helps ensure that you maintain a clear mind during trading, reducing the impact of impulse and emotion on decision-making.
Avoid worthless trading.
In the world of trading, worthless trading refers to trades where the risk and profit are disproportionate, often occurring in a state of blind and frequent trading by traders. Such trades often lead to greater losses than profits, affecting the trader's mentality and even causing them to fall into a vicious cycle of losses.
Specifically, traders facing a volatile market see so-called 'opportunities' and rush in without considering the profits and risks of the trades. Such blindly entering traders usually hold a lucky mentality, believing that even a small profit is still a profit. They ignore the big risks for small profits, even thinking that any market movement is an opportunity not to be missed, subjectively amplifying small opportunities and impulsively trading. This attitude not only shows contempt and disrespect for the market but also makes it difficult to achieve good results.
For professional traders, they usually formulate a trading plan in advance, set stop losses, etc., to ensure that even if there are losses, the impact is not too great. However, the losses caused by worthless trades are different, as these traders have a shallow understanding of the market, make trading decisions arbitrarily, and lack careful consideration. Such avoidable losses are more harmful than beneficial for the trader's growth.
High discipline.
High discipline plays a crucial role in trading within financial markets. It refers to traders following a series of clear rules and principles during trading to ensure effective risk management, achieve investment goals, and avoid adverse consequences from emotions and arbitrary decisions. The level of discipline directly correlates to the success of trading and is considered one of the key factors for successful trading.
I insist on emphasizing that trading decisions should not be influenced by emotions. Every day, I spend only half an hour reviewing charts, deliberately avoiding excessive observation.
Market volatility. I recommend traders strictly adhere to their trading plans.
Avoid over-analyzing the market, as disciplined execution is the cornerstone of stable profits. By following the predetermined plan, I can remain calm and avoid emotional decision-making, thereby improving trading efficiency and stability.
Most of the time, you should distance yourself from the trading desk. A wise strategy on the trading path is to keep a distance from the market. Overtrading is often a shortcut to draining funds; remember this point is crucial.