In the crypto world filled with magical realism, some get rich overnight while others leave in silence. Today, we're not talking about metaphysics or 'wealth codes', but a hardcore skill that can instantly elevate your trading strategy – the 'pullback confirmation' method.
Step 1: Learn to 'read the lines' and find your 'golden ratio'.
The candlestick chart in the crypto world is like an electrocardiogram, hiding countless secrets between ups and downs. The so-called 'pullback' is when the price, after breaking a key level, retracts like a spring to test the support. At this time, you need to keep an eye on two lines: the moving average and the trend line.
Moving averages reflect the market's average cost. If the price pulls back to the moving average but doesn't break it, it's like a diver lightly tapping the springboard, often leading to an explosive performance.
The trend line represents the boundary between bulls and bears. When the price pulls back to the trend line and rebounds, it indicates that the main funds are secretly positioning themselves.
Remember, 'a bearish candle online is an opportunity, a bullish candle offline is a trap.'
Step 2: Wait for the 'confirmation signal', don't act impulsively.
The confirmation signal after a pullback is like 'the other party is typing' during a date – it's both tantalizing and requires patience. There are two key indicators here:
Step 1: Volume contraction during pullback: When prices correct and the trading volume shrinks, it indicates that selling pressure is weakening and the main players haven't run away.
Step 2: Indicator resonance: Technical indicators such as MACD golden cross and RSI breaking away from the oversold zone simultaneously give bullish signals, which is the real 'timing and location'.
If the market is in despair during a pullback and you find that the price 'can't fall any further', congratulations, this may be the main players putting on a sad play, waiting for you to hand over your chips.
Step 3: Position management, be a 'bad boy' type of trader.
Even if the pullback confirmation is perfect, remember: 'Love may not disappear, but money will.'
First position test: Use 10%-20% of your position to test the waters, avoid going all in and getting caught in the reverse; Incremental adding: When prices move in your expected direction, gradually increase your position, like cutting steak into small pieces to savor.
Stop-loss rule: Set a stop-loss line of 3%-5%. Once it breaks, exit immediately. Don't fall in love with the market.
Finally, let me say something heart-wrenching.
There are no guaranteed profit secrets in the crypto world, only probability games. The essence of the pullback confirmation rule is to use rules against human nature – staying calm when others panic, and exercising restraint when others get euphoric.
Playing around in the crypto world is ultimately a contest between retail investors and institutional players. If you don't have cutting-edge news or firsthand information, you can only be cut! If you want to strategize together and harvest from the institutions, feel free to contact me!
There's a saying I strongly agree with: The boundaries of knowledge determine the boundaries of wealth, and a person can only earn wealth within their knowledge boundaries.
Maintain a good mindset when trading. Don't let your blood pressure rise during a market crash, and don't get carried away during a surge; securing profits is key.
For those with limited resources, being pragmatic is an unbreakable way to survive. Good luck!
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