First axe: Essential cryptocurrency investment skills for retail investors - six major moving average theories!
Core strategy: Three lines determine fate
Survival manual for moving averages (must-read for beginners)
Remember six key values: 5/10/20/30/60/120-day moving averages
5-day line: ultra-short life line
Case: This March, BTC rebounded multiple times at the 5-day line
Motto: Do not short online, do not bottom fish offline
3.20 daily line: the key point for swing traders
Position must be reduced after breaking (reference for ETH dropping below 2000 in April)
Online pullbacks are opportunities (such as May SOL rebounding 40% after pulling back to the 20-day line)
4.60 daily line: dividing line between bull and bear
This year, BTC touched 60,000 twice, both triggering thousand-point rebounds.
Positions must be cleared if they break for more than three days (reference for LUNA collapse precursor)
Buying and selling tactics
Bottom password: W double bottom + shrinking volume
Current learning and application: The current daily line of BNB is forming a right-bottom pattern
Confirmation signal: Breakthrough of the neck level + volume amplification by 2 times
Breakthrough strategy: Triangle convergence end
Classic case: June PEOPLE surged 200% in a single day after breaking the triangle
Stop loss setting: retreat immediately when breaking the low point of the breakthrough candlestick
Deadly signal: 'Earth Heaven Board' intraday
Feature: A sharp drop of more than 10% in the early session + recovery to the previous day's closing price in the afternoon
Recent case: July 5, ENS reversed against the market
Six major profit patterns (illustrated version)
Golden pit (the ender of washout)
Identification points: recover within 3 days after breaking
Best case this year: RNDR trend on April 17
Multi-directional cannon (a precursor to continuous rise)
Combination: Big Yang + Small Yin + Bigger Yang
Recent opportunity: ARB daily line is brewing
Green dragon fetching water (long-term rising point)
Feature: Retracement above the 120-day moving average with reduced volume
Classic case: The pattern before TON launched in February
Three lines blooming (trend accelerator)
Moving average combination: 5/10/20 daily lines rising simultaneously
Current eligible coins: STX
⑤ Bottom fishing (oversold rebound)
Trigger condition: RSI<30 + long lower shadow with volume
Risk warning: For mainstream coin operations only
⑥ Dragonfly Doji (pre-reversal signal)
Key identification: Long lower shadow touches key moving average
Recent case: July 8, BTC touched the 60-day line and rebounded
The second axe: teach you how to grasp the best buying and selling timing
Rolling position practical: from 10,000 to 1 million in capital management
Iron rules for position allocation
• Total funds ≤ 10,000: Single coin position not exceeding 30%
• 10,000 to 100,000: Diversify into 3-5 tracks (AI + Depin + Chain Games + RWA + Public Chain)
• >100,000: Must allocate 20% stablecoins to hedge
Contract rolling formula
① First position trial: 5% position to test direction (stop loss 3%)
② Confirm addition: Add to 10% after 10% profit
③ Trend position: add to 15% after breaking key levels
④ Profit-taking strategy: ladder profit-taking (30%/50%/70%)
Pitfall guide
• Absolutely do not do: New coin on the first day / early morning market / spike period
• Must set: Trailing stop loss (adjusted every hour)
• Deadly taboo: blindly increasing leverage after profits
② When to buy
08:00 Check overnight liquidation data (to judge sentiment)
09:30 Filter the top 10 coins for breakthroughs (DEX+CEX)
14:00 Check the news of the held coins (key regulatory dynamics)
20:00 Review delivery list (record 3 improvement points)
23:00 Set overnight orders (with stop loss and take profit)
The secret to advancing in the cryptocurrency circle - position management; how to avoid heavy positions after a drop and break free from the position management that leads to small profits and big losses? Five issues need to be solved in the crypto trading system:
① What to buy
② When to buy
③ How much to buy
④ When to sell
⑤ How much to sell
Among them, the key to what to buy is how to select a potential target, and when to sell is key to how to take profit. These two issues have been discussed extensively.
How much to buy is related to the issue of position management. This is also a core issue! As I usually say: 50-60% position in mainstream, 30% position in altcoins, and 10% position for contracts. This method may not allow you to achieve 10x or 100x. But how many really made money in this bull market? The ultimate reason is position management.
As for when to sell and how much; this can be executed according to the specific planning of the position.
So what exactly is position management? Are there any small tips for doing a good job in position management?
Three methods of position management
01
First, the rectangular position management method.
This method refers to dividing all positions equally, where each portion of the position is the same amount. Common position ratios are in thirds, fifths, or even tenths.
This method is more suitable for volatile markets. If we cannot judge whether the future market is in an upward or downward trend, then it is advisable to gradually average the cost through this fixed amount of incremental position to spread the risk.
02
Secondly, the funnel-shaped position management method, also known as the inverted pyramid management method.
As shown in the figure, this method divides the position into five parts from bottom to top, which are 10%, 15%, 20%, 25%, and 30%.
So when is this method more appropriate to use? If we judge that the market will maintain a prolonged downturn in the future, then this method can be tried.
At the beginning of the market downturn, we enter using this method, because the initial amount is small, it will also reserve sufficient chips for subsequent additions.
For example, if BTC's current net value is 65,000, we set the increment amount to add 10,000 dollars when it drops by 10%; when the net value drops by 20%, then add 20,000 dollars. If the market continues to drop, then continue to add 30,000 dollars until the net value shows an increase.
In summary, this method is suitable for left-side trading, simply put, it is the process of bottom fishing, gaining the potential main rising wave in the future.
Here, I want to remind you that since we do not know when the real bottom will arrive, we must remember that the interval between each incremental position cannot be too close, otherwise, if the market bottom has not yet come, our ammunition will have been exhausted. The key to this incremental position method lies in managing subsequent funds.
03
The last method is the pyramid position management method.
This method is exactly the opposite of the above content, which emphasizes a larger investment amount at the initial position, and as the market rises, gradually reduces the position ratio.
This method is also called right-side trading, which is to intervene when an upward trend has already formed, follow the trend to gain profits, suitable for when the market is good.
For example, when the bull market starts, we need to use sufficient chips to solidify our foundation, and the 30% or 20% added later is a cautious attitude to supplement the position.
Old rules of Wall Street
In a bull market, the most important thing is to hold chips until a significant reversal signal appears.
Summary
Having discussed these three position management methods, which one is better?
In fact, the market changes rapidly, and these three methods do not have a good or bad distinction. The important thing is that we choose a suitable increment method based on our judgment of the market.
As the saying goes that Qing Tian likes very much:
The essence of investment is actually a realization of one’s cognitive ability.
Finally, it’s important to remind again. No matter which position management method we adopt, we must maintain a certain proportion of liquidity in our accounts, so that we will not lose the right to choose.
At the same time, remember that a good position increment method is not about being unchanging, but about using the most suitable one as the market changes.
Investment originates from life; it is part of our lives. We can gain insights into the essence of life from investment, and we can also summarize the rules of investment from life.
The failure of mass investment usually arises from insufficient execution, lack of patience, emotional fluctuations, lack of a winning belief, and so on. These shortcomings are also omnipresent in life. What is needed in investment is not simply how to make money, but to correct various erroneous habits and ideas, cultivate one's virtues, and on this basis, to bear wealth.
Successful investors are calm and composed. When we give up all desires, everything cannot control us, and we gain true freedom in body, mind, and finances.
"Full position trading" is not real bravery, "light holding" is not great wisdom. Those who can manage positions are truly strong people inside.
In summary, position management can simply be summarized in one sentence: do not easily leverage, do not easily full position, do not easily short.
83% win rate, net profit 112.62%, ultimate short-term trading strategy for 5 minutes!
Traders use various strategies to continuously beat the market and make profits—however, few trading methods are as effective as short-term trading. By conducting a series of small profitable trades, focusing on quantity rather than quality to increase profits. There are several such trading strategies, and this article discusses one of them.
Indicator explanation
This trading setup uses three main indicators, and each indicator is explained in detail below.
EMA
EMA is just the exponential moving average of the closing price of this variety within the given trading period. Its working method is very similar to SMA (simple moving average), with the difference being that it gives more priority to the latest data. Typically, traders will only go long when the current price is above the EMA, and go short when the price is below the EMA.
Smoothed moving average convergence divergence
Moving Average Convergence Divergence or MACD is a momentum-based indicator that shows the relationship between two different EMAs. It is calculated by subtracting the longer period EMA from the shorter period EMA. This line can then be overlaid on another EMA line (called the signal line) to serve as a buy or sell signal. Typically, when the MACD is above the EMA, traders go long, and when the MACD is below the EMA, traders go short.
Relative Strength Index
RSI is a momentum indicator used to analyze varieties and determine whether they are overbought or oversold at any time point. It does this by monitoring the magnitude of recent price changes. The RSI is represented by a number between 0 and 100, with numbers below 20 representing oversold (bulls mature) and above 80 representing overbought (bears mature).
For this specific trading setup, the indicators used are as follows:
EMA: This setup uses three different EMAs, each with a different time period. They are marked with different colored lines:
EMA 1: Period = 9
EMA 2: Period = 55
EMA 3: Period = 200
MACD: The signal line and MACD line are disabled, only the histogram is used. The original chart is on a 5-minute interval, while the MACD histogram is on a 1-minute interval.
RSI: Emphasizes the middle band, rather than overbought (>80) and oversold (<20) bands.
Whenever EMA 1 is above EMA 2 (and further above EMA 3), long positions will be initiated. In addition, the RSI must be above 51, and there must be a red trend above the average (indicated by the MACD histogram).
Whenever EMA 1 is below EMA 2, and EMA 2 is also below EMA 3, a short position will be initiated. The RSI chart must be below 49, and in addition, the MACD histogram must show green bars above the average.
These indicators aim to indicate trend corrections. By adding Bollinger Bands to MACD, areas above the average can be easily identified. As long as the candle touches the Bollinger Bands, there will be bars above or below the average.
Risk-reward ratio set at 1:2.
Preliminary results
In the data of the past 3 months, after conducting 5-minute short-term trades, the overall result is:
Profitability: Net profit 112.62%
Number of trades: 151
Profit rate: 80.79%
Profit coefficient: 2.022
Drawdown: 11.94%
Adjustment: To improve the win rate and reduce risks, some additional indicators and settings can be added.
The RSI line can be changed to 48 and 52 instead of 49 and 51 to ensure that the RSI has broken through the 50 line. The ADX indicator can be added to eliminate bad trades that may occur when a trend is about to end.
Three axes to change fate in cryptocurrency trading: Break cognition, practice skills, build systems
In the cryptocurrency circle, some become rich overnight, achieving a leap in class; while others lose everything and exit in silence.
Being in it, have you ever thought about why, in the same market, the outcomes are so different?
In fact, the key lies in whether you have mastered the three axes of changing fate
I. Break cognition: Say goodbye to 'I can't', affirm 'I can'
The gap between ordinary investors and cryptocurrency trading experts is first reflected in the cognitive level.
Many people who are new to the cryptocurrency circle face complex technologies and fluctuating prices, filled with doubts: "The market is so complex, is it going up or down?" This 'I can't do it' cognition acts like an invisible shackles that bind actions.
What experts see are countless potentials and opportunities
Like the early investors in Ethereum, when the feasibility of smart contracts was questioned, they firmly believed that blockchain technology would bring revolution, acted decisively, and reaped returns of hundreds or even thousands of times.
So, to change fate in crypto investment, you first need to 'break poverty' in cognition.
Believe in your ability to seize opportunities, arm yourself with learning and research, and abandon fixed biases and fears.
From the bottom of your heart, agree that 'I can do it', this is the first step towards successful investing.
II. Practice skills: Identify bull and bear cycles
Luck may bring temporary gains, but to stand firm in the crypto market long-term, it relies on solid skills. This requires you to focus on mastering technical skills during the downturn.
Technical analysis is one of the basic skills.
Learning to read candlestick charts can help you judge market trends and find the right timing for entry and exit.
Fundamental analysis is equally crucial. In-depth study of the project's white paper, understanding team background, technical strength, and application scenarios is essential to distinguish the quality of a project and avoid falling into the trap of air coins.
The famous '10,000-hour rule' also applies to crypto investment.
Spend time every day studying the market and analyzing projects, continuously accumulating experience. Given time, you too can become an investment expert and gain the confidence to make money in the market.
III. Build a system: sustainable profitability
Ordinary investors often fight alone, chasing highs and selling lows, with returns relying entirely on luck.
Successful investors all have their own investment systems.
Capital management is an important component of the investment system.
Investment strategies must be clear: is it long-term holding or swing trading? Is it focused on value investing, or participating in hot projects speculation?
You need to formulate a strategy suitable for yourself based on your risk tolerance and investment goals.
At the same time, set stop loss and take profit points, strictly implement them, and avoid greed and fear from influencing decisions.
In the cryptocurrency circle, breaking cognition allows you to see opportunities, practicing skills allows you to seize opportunities, and building systems allows you to profit stably.
Master these three axes of changing fate, the next one to achieve financial freedom in the crypto market is definitely you
