Monthly salary: 4000 yuan, annual income 48,000, lifetime total 1.92 million.
Monthly salary: 5000 yuan, annual income 60,000, lifetime total 2.4 million.
Monthly salary: 6000 yuan, annual income 72,000, lifetime total 2.88 million.
Monthly salary: 7000 yuan, annual income 84,000, lifetime total 3.36 million.
Monthly salary: 8000 yuan, annual income 96,000, lifetime total 3.84 million.
Monthly salary: 9000 yuan, annual income 108,000, lifetime total 4.32 million.
Monthly salary: 10000 yuan, annual income 120,000, lifetime total 4.8 million.
Monthly salary: 20000 yuan, annual income 240,000, lifetime total 9.6 million.
Monthly salary: 30000 yuan, annual income 360,000, lifetime total 14.4 million.
Monthly salary: 40000 yuan, annual income 480,000, lifetime total 19.2 million.
Monthly salary: 50000 yuan, annual income 600,000, lifetime total 24 million.
Very few people earn more than 10,000 yuan a month, and even fewer earn more than 20,000 yuan. Most people still earn below 10,000 yuan, feeling
that an ordinary person earns just enough to buy a house in their lifetime!
So, for you in the crypto circle, how much do you want to earn before stopping?
If you are 50 years old this year, then my answer is 10 Bitcoins. In the future, Bitcoin will definitely be worth millions each. By conservative estimates,
One Bitcoin is 1 million, so 10 is 10 million. Holding 10 Bitcoins means you are living the life of a pressured elite worker!
If you are 40 years old, then 5 is enough.
If you are 30 years old, then 2 is enough.
If you are 20 years old, then 0.5 is enough.
Very few people earn more than 10,000 yuan a month, and even fewer earn more than 20,000 yuan. Most people still earn below 10,000 yuan, feeling
that an ordinary person earns just enough to buy a house in their lifetime!
So, for you in the crypto circle, how much do you want to earn before stopping?
If you are 50 years old this year, then my answer is 10 Bitcoins. In the future, Bitcoin will definitely be worth millions each. By conservative estimates,
One Bitcoin is 1 million, so 10 is 10 million. Holding 10 Bitcoins means you are living the life of a pressured elite worker!
If you are 40 years old, then 5 is enough.
If you are 30 years old, then 2 is enough.
If you are 20 years old, then 0.5 is enough.
If you are 10 years old, then 0.36 is enough.
If you are between 30-40 years old and currently hold 20 Bitcoins, that guarantees a free life. If you hold 100 Bitcoins, then the earth will be
your village. Come on, crypto friends!
There are many ways to make money, but the lessons learned are always the same.
Now I have entered my 32nd year, and since I was 22, I have embarked on the journey of digital currency investment. Between 2023 and 2024, my assets successfully crossed the 8-digit milestone.
Now, my quality of life has significantly improved, and where I stay is no longer the high-end hotels around 2000 yuan, and my luggage, hats, and other personal items have perhaps cleverly merged into the unique symbols of the crypto circle, showcasing my identity and taste.
Compared to the hard work of the older generation in the industrial field or the struggles of the post-80s e-commerce entrepreneurs, my lifestyle appears particularly comfortable and free. Throughout my investment career, I have hardly ever fallen into complicated business entanglements; the troubles of life seem to always take a detour.
In my opinion, the key to digital currency investment lies in maintaining a good mindset; mastering the technical aspects is secondary. This calmness and composure may be the secret to my success in the crypto circle.
Survival Guide in the Crypto Circle: Uncovering Super Practical Trading Techniques (Purely Practical Content)
In the crypto circle, your trading strategy is your 'secret weapon'. The following tips are the crystallization of practical experience, so be sure to save them!
Entry section: Test the waters in the crypto circle, prepare to go first; enter steadily, reject impulsiveness.
Sideways section: Buy when the price is low and in a sideways trend; when it's high and in a sideways trend, sell decisively without hesitation.
Volatility section: Sell when hitting a high, buy quickly on a plunge; watch and wait during sideways movement, reduce trading. Sideways means trading sideways to avoid losses. Hold your chips tightly; a surge might be just a second away; be cautious of a sudden drop during a quick surge, always ready to take profits; a slow decline is the right time to average down gradually.
Timing section: Do not sell on a high; do not buy on a plunge; do not trade during sideways movement. Buy on a bearish candle, sell on a bullish candle; reverse operations to stand out. Buy on a big drop in the morning; sell on a big rise in the morning; do not chase highs in the afternoon; buy on a big drop in the afternoon the next day; do not cut losses on a big drop in the morning; if there is no rise or fall, rest; if trapped, average down to seek breakeven; excessive greed is not advisable.
Risk Awareness Section: Calm lake surfaces can rise high waves; there may be big waves ahead; after a big rise, a pullback is inevitable, and K-lines may show a triangular pattern for several days. In an upward trend, look for support; in a downward trend, look for resistance. Full positions are a big taboo; stubbornness is not feasible; recognize when to stop in the face of uncertainty and seize the timing for entry and exit. Trading cryptocurrencies is essentially trading mentality; greed and fear are the greatest enemies; be cautious when chasing highs and cutting losses; only remain calm and collected.
In addition to the rules, I have also compiled several super practical trading methods that can benefit both novice traders and seasoned players.
Oscillation trading method: Most market conditions are in oscillation patterns, utilizing high sell and low buy within ranges is the basis for stable profit. Use BOLL indicators and box theory, combined with technical indicators and charts to accurately identify support and resistance. Follow short-term trading principles and avoid greed.
Breakout trading method: After a long period of consolidation, the market will choose a direction. Entering after a breakout can yield quick profits. However, it requires precise judgment of the breakout and maintaining a steady mindset without greed or fear.
Unilateral trend trading method: After the market breaks through the consolidation, a unilateral trend will form. Trading in the direction of the trend is key to making profits. Entering during pullbacks or rebounds, referencing candlestick patterns, moving averages, BOLL, trend lines, and other indicators, will allow you to navigate with ease.
Support and resistance trading method: When the market encounters key support and resistance levels, it will often be obstructed or gain support. Entering at this time is a common strategy. Use trend lines, moving averages, Bollinger Bands, parabolic indicators, etc., to accurately identify support and resistance levels.
Retracement and rebound trading method: After significant rises or falls, there will be brief pullbacks or rebounds. Seize the opportunity to profit easily. The main basis is to judge based on candlestick patterns; good market feel can help you accurately grasp high and low points.
Timeframe trading method: Morning and afternoon sessions have low volatility, suitable for conservative investors. Although the profit time for placing orders is long, it is easier to grasp the market trends; the evening and early morning sessions have high volatility, suitable for aggressive investors, allowing for quick profits but with high difficulty and strict requirements on technical and judgment skills.
What should you pay attention to for survival in the crypto circle?
In addition to solid techniques, I also strictly adhere to the following 10 trading rules.
1. Better to miss out than to make a mistake.
I have also shared with everyone before that there are no good stocks, only good entry points! Because the entry point directly determines the exit point and also affects the amount of profit. Therefore, in my operational process, the entry point is absolutely crucial. Some stocks, even if you see them rising strongly, if there is no buying point, you can only miss out or participate with a small position. Because without a buying point, it means that the entry cost is higher than others, and it is easy to be short-term trapped by others. So either miss out or wait for a good entry point after a pullback.
2. Always leave yourself a way out.
Everyone is the same; at the beginning, they are blinded by greed and invest heavily, often when they feel very confident. After more experiences, they find that sometimes there are many surprises. Although the general direction is correct, their imagined entry points often deviate from reality. When the funds are small, position management issues do not emerge, but when the funds are large, position issues become prominent. The result of being fully invested is often to ride the elevator, being trapped short-term with significant floating losses, directly impacting trading emotions. Therefore, at any time, one must have a mid-term and long-term position strategy. Even with 200% confidence, do not have 100% position, which is equivalent to leaving yourself a way out!
3. Earn the part you should earn.
Drowning in three thousand, only take a spoonful to drink. Most stock traders, when starting in crypto trading, want to capture every coin from start to finish, wanting to gain from the rising parts and avoid the falling parts. After several years, they end up with nothing. After realizing the pain, they lock onto one pattern. I only focus on confirming bottom patterns, so everything I share is centered around the bottom. If there is no bottom, I will only look for accelerated upward patterns. We can open any candlestick chart, list profitable patterns, and choose a common one. Then, stick to that pattern, and over time it will become your ATM because you are clear about most traps and opportunities, making it easier to earn the part you should earn, which is also the purpose of our presence in the crypto circle.
4. The more you lose in cryptocurrency trading, the more cautious you need to be when averaging down.
There are many traps in the cryptocurrency market. Many people become very anxious after being trapped in a trade, not only not thinking about exiting this time but also continuously averaging down to lower their cost basis, hoping for a massive rebound to make back their losses, which actually goes against common sense. The process of decline cannot be reversed in just a day or two, averaging down is merely self-comforting. The more anxious you are, the more likely you are to make mistakes, and in the end, you will regret it. Why dare to average down at this position?
5. Trading discipline must be strictly enforced.
Many traders will formulate detailed plans before the market opens, such as when the market falls to a certain level before taking action, or what price levels for individual coins are suitable for entry. However, during trading, they are often easily influenced by stimuli and temptations. If you cannot even execute your own plan properly, then you are not trading in the crypto market, but rather in a casino. Most operations at the moment of trading are mistakes.
6. Do not become emotionally attached to any asset.
If you fall in love with the asset you are trading, it is easy to make poor decisions. Excellent traders make money through efficiency and rules, giving themselves an edge, as most market participants' trading behavior is driven by emotion. 'Be a trading machine without emotions' can ensure decisiveness and principle in trading. The reason many traders suffer heavy losses is largely due to emotional attachment to certain altcoins, teams, or projects. This might be acceptable for medium to long-term investors, but for short-term traders, it is a potential disaster.
7. Maintain simple trading rules.
Traders often combine multiple indicators, news, and candlestick patterns in an attempt to find suitable trading convergence points. This approach is fine in itself, but be careful to avoid over-analysis, which complicates matters. In reality, when suitable candlestick patterns appear on the chart that fit your system, you can initiate a trade. At the same time, ensure you set appropriate stop-loss levels and position control, which is particularly important.
8. Only trade with the right mindset.
When you feel angry, tired, or stressed about something, do not trade; your mindset will affect your judgment. The key to maintaining a good mindset is to have other daily activities outside of trading. For example, fitness, reading, and spending time with family and friends help cultivate the correct trading philosophy.
9. Do not forget that technical analysis is a game of probabilities.
Technical analysis does not have absolute correctness; it is essentially a game of probabilities. That is to say, no matter what technical method you use to formulate a strategy, you cannot guarantee that the market will behave as expected. Technical analysis is merely a prediction and should not be treated as a deterministic event.
Regardless of how rich your experience is or how brilliant your track record, you should never take for granted that the market will follow your technical analysis. If you hold this mindset, it is easy to overbet on a certain preset, leading to excessive exposure to risk. The market will teach you a lesson in no time.
10. Be strict with yourself.
Overcoming oneself is difficult. On sunny days, one thinks they can understand their faults and avoid them realistically. Trading does not need to be overly complicated; it should be simple and effective. Trading cryptocurrencies requires finding a trading principle that suits oneself based on personal characteristics, and strictly implementing it. Discipline and mindset control are more important than improving technology. Only in this way can one survive in the market for a long time.
In investing, the most important thing is to avoid failure, not to seize every success. The same goes for trading; it's better to let go than to make a mistake. Sometimes waiting is also a form of profit.
I have specifically compiled [How to Identify Trend Reversal Patterns (Ultimate Guide)] to share with those destined to find it.
Observing the market for a certain time, you discover a beautiful cup and handle pattern, as shown in the figure below.
Therefore, you executed trading operations based on your analysis of the market, expecting the market to usher in a significant upward trend. However, the subsequent market direction took an unexpected turn, seemingly as if the market had sensed your trading intentions, resulting in a complete opposite to your expectations, as shown in the figure below.
Such situations do not occur occasionally but happen frequently. If you frequently encounter this issue and are seeking solutions, then you have stepped into the right field.
In this guide, I will impart the necessary knowledge and strategies to effectively respond to these patterns and transform them into your trading advantage. The following is an overview of the core content of this guide:
(1) Definition of trend reversal patterns and their operational mechanisms.
(2) Key techniques for identifying high-probability trend reversal patterns.
(3) Simple trading strategies for each trend reversal pattern.
(4) The step-by-step process for trading trend reversal patterns.
2. Revealing the hidden nature of trend reversal patterns: An exploration of their definitions and operational principles.
The specific nature of trend reversal patterns can be understood as follows: Imagine you are attending a social gathering where the music suddenly shifts from soothing jazz to a rhythmically intense salsa dance track. The mechanism of trend reversal patterns is similar; they play a role in the market akin to that of a DJ. Essentially, these patterns indicate that a change in market trends is imminent, as shown in the figure below.
Therefore, when you observe these patterns displaying their unique 'rhythm' on the chart, as shown in the figure below.
You realize that based on the performance of these patterns on the charts, it should be time to take action and adjust your trading strategy according to these signals.
Moreover, although I have shown you the schematic of the trend reversal pattern, I can't help but ask, what are the common trend reversal patterns? Here, when I mention 'common', I mean that these basic trend reversal patterns are universally present regardless of which market or time frame you observe. They appear in various market environments in different forms: head and shoulders, cup and handle, double bottom.
Next, I will show you the specific manifestations of these patterns in actual market trading. First, let us explore the 'head and shoulders' pattern, as shown in the figure below.
However, when the market experiences a sharp downward trend, such situations will occur, as shown in the figure below.
Subsequently, the market suddenly experiences violent fluctuations, as shown in the figure below.
It is evident that a false breakout phenomenon has occurred. In the face of this situation, measures must be taken, as shown in the figure below.
By reaching those trivial stop-loss points, one can reverse the current market trend, which is precisely the process of the head and shoulders pattern gradually forming. Next, we will explore the 'cup and handle' pattern, as shown in the figure below.
The 'cup and handle' pattern is a technical analysis pattern that indicates an upward trend in the market, with a structure resembling a teacup with a fine handle. Though its appearance may feel friendly, it is one of the most direct and clear trading patterns. Why is that? Because the trading process of this pattern resembles an exhilarating roller coaster ride; before finally rising, investors will experience a dramatic decline, followed by an ascent, and then a steady plateau, as shown in the figure below.
Finally, we explore the 'double bottom' pattern, as shown in the figure below.
This pattern can be seen as a representation of the market, that is, I have touched the lowest point, but now I am gathering strength for a stronger rebound, similar to the principle of a trampoline; the buying power has not been crushed, as shown in the figure below.
The importance is evident; these patterns are the primary knowledge points you must master to maintain a leading position in trading.
At the same time, a crucial question arises: why invest energy in studying these trend reversal patterns? This is because these patterns hold the key to unlocking a treasure trove of high certainty or low-risk trading opportunities. They are like a treasure map, guiding you through turbulent market waters, helping you avoid potential risks and discover profitable trading opportunities. Furthermore, by mastering these patterns, you can quickly and easily analyze market dynamics and make wise decisions. I hope you recognize that these patterns are not just temporary tools; they are your lifeline to success in price action trading.
3. Decoding the code: How to discover high-probability trend reversal patterns.
Revealing the ratio relationship between trends and patterns is the key to identifying high-probability trend reversals and is a crucial clue. Next, I will further elaborate on this clue.
(1) Determine the ratio between trends and patterns.
The ratio of trends to patterns is determined by comparing the number of price bars during the trend's progression with those of trend reversal patterns, as illustrated in the figure below.
As you have observed, this ratio is like a secret code that most traders fail to recognize its importance; however, at the same time, this is a numerical race that distinguishes those who insist on trend continuation from those who are adept at spotting trend reversals.
Some trends have short durations, lasting only a few price bars, as shown in the figure below.
Although some trends are still ongoing, as shown in the figure below.
Similarly, trend reversal patterns are the same; some patterns manifest as subtle, as shown in the figure below.
At the same time, some other patterns are extremely significant, their scale large enough to overturn the current mainstream trends, as shown in the figure below.
At this moment, you may have doubts: 'Can we achieve our trading goals just by trading trend reversal patterns?' 'What is the significance of studying this concept?' Next, I will further answer these questions.
(2) Trend and pattern ratio: trend continuation (at least 2:1).
If compared to trend reversal patterns, the trend has fewer price bars, as shown in the figure below.
Do you think this double bottom pattern has enough strength to reverse the trend? The reality is not so; it is akin to an ant attempting to stop a train that is in motion, with a trend to pattern ratio as high as 2.85:1. Therefore, if the trend to pattern ratio exceeds 2:1 (i.e., the number of price bars in the trend is at least three times that of the pattern forming bars), then the dominant trend is very likely to suppress this relatively small pattern.
(3) Trend pattern ratio: reversal (at least 1:2).
If compared to trend reversal patterns, the trend has fewer price bars, as shown in the figure below.
For example, when the ratio of trend to pattern is 1:3, if you observe such a ratio, then this pattern is very likely to trigger a new upward trend, that is, a reversal of the trend. You may ask why these ratios of trend to pattern are so important? By mastering this ratio, you will gain the ability to anticipate potential market directions.
You are no longer solely dependent on the trend reversal pattern itself, but can comprehensively consider the market's overall price behavior.
By now, you have recognized that without analyzing trend strength, you should not blindly rely on common trend reversal patterns.
However, what if I told you that there is a pattern that surpasses all other trend reversal patterns? A 'universal' pattern that applies regardless of which trend reversal pattern you face? Does that pique your interest? If so, please continue reading.
4. Unveiling the key: Mastering trend reversal patterns through simple techniques.
The simple technique mentioned here refers to structural breaks, which will enable you to confidently and accurately navigate dynamic markets and skillfully master trend reversal patterns, as shown in the figure below.
What is structural break?
Imagine, you have built a house with a solid foundation, but suddenly you notice the walls shifting, thus creating a new structural pattern. This is a metaphor for structural breakthroughs in trading. When the price breaks through a set trend line and then forms a breakthrough of a flag pattern, such situations will occur, as shown in the figure below.
This is like a clear signal indicating that the market direction is undergoing a significant change. However, not only that, structural breakthroughs are a core element of all common trend reversal patterns, providing credible entry timing for your trades. If you have doubts about this, I will provide empirical evidence for you next, as shown in the figure below.
In addition, regarding the double bottom pattern, patiently waiting for the recent high point to be 'tested' or 'confirmed' is a highly valuable strategy. Now, you can fully utilize the power of structural breakthroughs by accurately planning your entry timing, similar to catching the wave when it begins to swell, ensuring you can ride the wave to maximize your returns. Therefore, when the price breaks through the flag pattern, as shown in the figure below.
This is like the starter pistol going off in a race, giving you a clear signal to start; this confirmation moment is your opportunity to execute your trading instructions with full confidence, as shown in the figure below.
By mastering this simple technique, you will become a savvy trader capable of recognizing trend reversals and seizing profitable opportunities. At this stage, you may ponder the following questions: 'If structural breakthroughs are sufficient, what is the significance of studying other trend reversal patterns?' 'How do we apply this knowledge in practice?' However, up till now, the knowledge you have accumulated is laying a solid foundation for your next stage of learning. Next, I will detail how to manage your entry, exit, and trading management for trend reversal patterns.
5. An infallible strategy for trading trend reversal patterns.
(1) Step #1: Identify the trend.
All of this begins with identifying the trend. You must carefully analyze the chart to determine whether the market is steadily rising in an uptrend or fluctuating in a downtrend. In this example, we will focus on the existing uptrend, as shown in the figure below.
Once you successfully unlock the code of the trend, you can enter the next phase, using your pattern recognition skills.
(2) Step #2: Determine the trend reversal pattern.
At this moment, it is time for you to start searching for those patterns that indicate trend reversals. Please revisit those familiar trend reversal patterns, such as the head and shoulders pattern, cup and handle, and double bottom patterns. In the current example, we will focus on exploring the head and shoulders pattern, as shown in the figure below.
(3) Step #3: Determine the ratio between trends and patterns.
The ratio of trends and patterns is the next key clue in your challenging trading exploration. You need to calculate the number of price bars in the trend and its corresponding trend reversal patterns, as you have observed in the figure below.
The ratio of trend reversal patterns is 3:1, so if the intensity of the trend exceeds the patterns, maintain the existing trend. Conversely, if the patterns dominate, maintain a bullish stance.
(4) Step #4: Determine your setup (flag pattern breakout).
At this moment, you need to establish your trading setup, focusing on signals of structural break. This requires you to patiently wait and closely observe price breaks against trendlines, followed by the formation of flag patterns, as shown in the figure below.
Indeed, we will temporarily set aside the head and shoulders pattern in this process. Next, you need to wait until the effective candle in the flag pattern completes the breakout, at which point your trading setup will be completed, as shown in the figure below.
(5) Step #5: Manage your trading.
You must set stop-loss and take-profit levels. For your initial stop-loss, you can set it at a certain distance below the support level, as shown in the figure below.
As for take-profit, you should use a medium-term trailing stop, such as the 50-period moving average, as shown in the figure below.
As you have observed, these measures constitute a safety net for your capital protection and profit assurance. You can employ various methods to manage your trades. In fact, you can refer to these guides for more information on these strategies: how to use trailing stops (five effective techniques) and how to set take-profit orders (basic guide).
6. Conclusion.
The following is an overview of the core points of this guide:
(1) Trend reversal patterns (including inverted head and shoulders, cup and handle, double bottom) provide profound insights into potential trend changes.
(2) The ratio of trends and patterns helps assess the likelihood of trend continuation or reversal.
(3) The breakthrough of structure (using the flag pattern to break through the trend line) provides a strong entry point for trading trend reversals.
(4) The step-by-step trading process includes identifying trends, patterns, ratios, and setups, as well as effectively managing trades.
