What truly changed my fate was a day four years ago! From then on, I reclaimed everything I lost!
1. Timing: Only enter the market when the conditions are right for rolling positions.
2. Opening a position: Follow the signals from technical analysis and find the right moment to enter.
3. Increasing positions: If the market moves in your direction, gradually add to your position.
4. Reducing positions: When you have made the expected profit, or if the market seems a bit off, gradually sell.
5. Closing a position: When you reach your target price or the market clearly indicates a change, sell everything.
After making money, consider adding more: if your investment has increased, you may consider adding more, but the premise is that the cost has already decreased and the risk is lower. It’s not about adding every time you make money, but rather at the right moment, for example, adding at a breakthrough point in a trend, and quickly reducing when it breaks through, or adding during a pullback.
Base position + T trading: Divide your assets into two parts, keeping one part as a base position and trading the other part during market price fluctuations; this can reduce costs and improve returns. There are several ways to divide this:
1. Half-position rolling: Hold half of the funds long-term while buying and selling the other half during price fluctuations.
2. Holding 30% of the position: Hold 30% of funds long-term while buying and selling the remaining 70% during price fluctuations.
3. Holding 70% of the position: Hold 70% of funds long-term while buying and selling the remaining 30% during price fluctuations.
The purpose of doing this is to adjust costs while maintaining a certain position, making the holdings more optimized.
In position management, the first thing is to diversify risk; do not put all your funds into one trade. You can divide your funds into three to four portions and only use one portion for each trade. For example, if you have 40,000, divide it into four parts, using only 10,000 for each trade.
The most practical short-term trading strategy for cryptocurrency (10-minute trading method in the crypto space)
Long-term cryptocurrency trading means holding digital currencies for the long term, while trading cryptocurrency means buying and selling digital currencies. The main reasons for frequent crashes in the crypto space are threefold. 'Short-term is silver' by Tang Nengtong consists of 8 books, and more and more newcomers are starting to invest in virtual currencies.
Generally divided into short-term and long-term. Trading cryptocurrency, as the name suggests, is buying and selling digital currencies. Most people prefer trading cryptocurrency rather than holding it. The crypto space is small.
This is all very practical knowledge, extremely useful. Its pullback low points are often the mid-short-term entry points for moderate buying. Doing 'ultra-short term' is the second strategy for short-term stock trading.
If you are new to the crypto space, some players engage in ultra-short-term trading. The investment methods in cryptocurrency can be divided into two types: SAR and other short-term indicators are relatively accurate. The best method for short-term stock trading is to conduct it based on an upward trend in the medium to long term.
The crypto space is small, and short-term traders must catch the leading players. Yan Yang's investment strategy, the secret handbook for short-term trading, buy a set of Xu Wenming's (Short-term Point Gold) series and take a look.
Which strategy is the most practical? The so-called crypto space carries significant risk, and it can change in just a day! How to trade cryptocurrency? As a newcomer, it's best not to participate in this.
Rabbits frequently operate short-term in the stock market; if the amount in cryptocurrency is too large, it may be investigated. Therefore, if you want to do short-term trading, you must have good guidelines for guidance. It is said that one day in the crypto space equals a year in the stock market. Do not participate in cryptocurrency trading.
In the first cryptocurrency trading experience, most operations are based on short-term trading; at the same time, if you are a short-term trader, these are practical tools I often use. There are many ways to trade short-term cryptocurrency.
Avoid borrowing or taking loans to trade cryptocurrencies. The speed of bull and bear transitions in the crypto space is probably unmatched, and most people prefer short-term trading over long-term trading. Use 'MACD low-level double golden cross' to find short-term explosive stocks; short-term cryptocurrency trading and long-term cryptocurrency trading.
The closing price near a doji candlestick is an excellent entry point for short-term trading. The KDJ guideline is known as the king of short-term trading. For cryptocurrency: due to the unique characteristics of cryptocurrency products compared to traditional currencies, let's talk about those who want to do short-term trading.
Both trading methods for cryptocurrencies are the same. Short-term stock selection practical skills: short-term cryptocurrency trading means quick buying and selling; he is still a white person who does not understand the crypto space. This leads to the frequent occurrence of explosive failures in crypto products.
Utilizing short-term wave trading to make money. There are many ways to make money in the crypto space, and there are essentially three mindsets in the crypto community: most stock investors understand that stock trading is about trading expectations.
The killer technique for trading cryptocurrency: the top-secret investment strategies used by the big players!
Many people ask me how to make money from trading cryptocurrencies.
I usually reply succinctly with four words: Buy low, sell high.
Although it is essentially this simple, I believe that those who ask me understand in their hearts. But why is it that everyone understands the reasoning, I can make money, but you cannot?
Because you had problems during execution, the investment strategy is wrong.
Taking buying points as an example, while the saying 'the lower the buying point, the better' sounds simple, the reality is that many people do not understand what 'low' means.
The concept of 'low' here has two meanings: the first refers to a low average entry cost, focusing on the average, while the second refers to a relatively low buying price rather than an absolute low.
First, what is the average entry cost?
When you invest in an asset, most of the time you buy in batches, and the price and quantity may vary each time. At this point, your method for calculating the average entry cost is to add together all the money invested in this asset and then divide by the total quantity bought. The price you get at this point is your true purchase price and your average entry cost.
Average entry cost is crucial; the calculation of future return rates must follow this price.
The second meaning is that the buying price is relatively low, referring to the comparison between your average entry cost and the valuation of the asset, rather than how low the absolute price is.
For example, if you value stock A at 100 yuan, and your purchase price is 50 yuan, then that price is low. Stock B is valued at 40 yuan, but you spent the same 50 yuan to buy it, making that price high.
Once we understand the meaning of low, we can discuss return rates.
Everyone knows the formula for calculating return rates: selling price minus buying price, then divide by the buying price, which gives you your return rate. However, knowing does not equate to understanding. Everyone can recite the formula, but only those who understand and can proficiently apply it to solve mathematical problems truly grasp it.
Now I will pose a question.
Assuming Alice bought Bitcoin at $3,000 and later sold it for $2,000, while Bob decided to buy at $10,000 but then the price surged by $5,000, Bob was very happy and also sold.
Question: Who earns more, Alice or Bob?
Don’t think, just quickly say your answer!
The correct answer is Alice; Alice has a return rate of 66%, while Bob only has 50%.
I guess some friends may answer incorrectly, but don't be discouraged, as this is a flaw in the human brain itself. The human brain is divided into system one and system two. System one does not calculate but thinks purely intuitively. From an absolute value perspective, 5,000 is greater than 2,000, so you chose incorrectly.
In investments, we should try to minimize the exposure of system one and leave the problems for rational system two to think about.
The relationship between return rate and price spread is not a simple linear relationship but an exponential one. Assuming the price of asset A fluctuates between 100-500, starting from 100, I buy every 50. When this asset rises to 500, the return curve looks like this.
Two points refer to the highest and lowest prices on the x-axis of the curve. If you are good at valuation, you can better identify the price fluctuation range of the current asset, using what you consider the highest and lowest reasonable prices as the two endpoints of the curve.
However, if you are not good at valuing assets, another relatively simple method is to look at the highest and lowest prices of that asset over the past year. Generally, the prices from the past year are relatively close to the current actual value, but if there happened to be a bull market last year, you need to refer to the prices from the year before last to make adjustments and reduce the impact of the bull market prices.
The area in section one of point two is the left half of the curve, divided by the midpoint of the x-axis.
The trend of the profit curve and the loss curve is almost identical. The left half of the profit curve generally has a higher return rate, while the left half of the loss curve indicates a good risk tolerance when prices fall. Due to the significant slope change in the middle part of the curve, it is a wise choice to control your average entry cost on the left half of the curve.
After discussing the selection of buying points, let's now talk about today's main event: selling points.
Choosing a selling point is actually much more difficult than choosing a buying point. A good buying point only ensures that you have the potential to earn high returns, but whether you can actually cash out depends on how you choose your selling point and when to exit.
Some people play short-term and see gains of 20 to 30 points and quickly take profits. Although this strategy can be profitable, when encountering a bull market that might rise three to five times, it is destined to miss out. At the beginning of the bull market, they will be left behind, and the opportunity for financial freedom will be lost.
Some people play long-term and always want to wait until the real bull market to cash out, but this strategy also has its flaws. On one hand, they miss out on the gains from small cycles, and on the other hand, even if the big cycle comes, they may not sell in time due to complacency, resulting in a roller coaster ride that ultimately leads to disappointment.
So where is the best selling point? How do you balance short-term and long-term returns?
The answer is hidden in the martial arts principles of the 'Heavenly Sword and Dragon Slaying Sabre.' The original text is like this; everyone should comprehend it:
Let them be strong, the gentle breeze caresses the mountain ridge.
Let him be fierce, the bright moon shines over the great river.
He is fierce, he is evil, but I have a breath of true energy!
What does this mean?
This means that regardless of whether the market is bullish or bearish, rising or falling, it does not matter as long as I have formulated my strategy well; the returns cannot escape.
Therefore, if you want to find a suitable selling point, we must eliminate market interference, start from our expectations, turn passive into active, and not cater to the market but instead control it.
The selling strategy I am about to discuss is an active strategy. The real selling point is not just a point, but a line.
To determine this line, you first need to establish a basic expected return, let's say 50%, then set an optimistic expected return, perhaps 300%. Sell each time the basic return doubles, and when you reach the optimistic expected return, sell all assets to cash out.
From 50% to 300%, there are 6 selling points: 50%, 100%, 150%, 200%, 250%, and 300%. Once selling points are determined, how much should be sold each time?
Small cycles cannot bring particularly large gains; grasping the larger cycle is the core strategy. Therefore, my suggestion is to sell according to the exponential function curve.
We can split our assets according to the exponential function of 2. If there are 6 selling points in total, we can add 2 up to 26, totaling 126. So I divide my assets into 126 parts, and at each selling point, I sell the corresponding part according to the exponential function of 2. Assuming I have a total of 63 bitcoins, then each part is 0.5, and the quantity to sell at each selling point corresponds to this curve.
By selling according to this curve, you won't go back empty-handed from small markets; you can earn some returns. When encountering a big market, the power of this curve can allow you to earn a fortune.
If we look at human development over a 10-year time scale, in recent centuries, humanity has been making progress. I believe that in the next decade or even the decade after, this trend will continue.
As an investor, before the time machine appears, do not fantasize about predicting the future. What we can do is exchange time for returns. As long as the assets and strategies are correct, what you want will eventually be delivered by time.
My cryptocurrency trading system on cycles and sequences.
1. Cycle refers to the time cycle. Generally divided into 1 minute, 5 minutes, 15 minutes, 30 minutes, 60 minutes, 4 hours, daily, weekly, monthly, and yearly... I believe I have mentioned before that the vast majority of indicators and strategies also apply to different cycles. Why track and study different time periods? It is to clarify the current market conditions, the macro environment, micro environment, and what is occurring.
2. I believe that tracking and studying time periods is most crucial because, in many cases, lows will be accompanied by the triggering of buying points in a smaller cycle.
For example, sometimes the daily chart structure has not formed, while the 60-minute structure has. 'Structure' has position weight, and clearly, this 60-minute structure can also be actionable. However, if you do not track and study the current structure of each cycle, you are likely to miss out.
3. The situation we most hope to see is that at a certain moment, structures appear across all cycles, which is called 'cycle resonance.' This is an exciting sign and has a much greater success rate and strength compared to a single cycle triggering a structure. However, this situation is rare and unpredictable. The market reversal strength corresponding to a large cycle structure is significant, while that of a small cycle structure is minor. The trends and structural situations across different cycles constitute the basis for buying and selling.
4. I mentioned earlier that 'structure' is a left-side indicator and needs to be used in conjunction with trends. Using it alone is not very significant.
'Structure' has the greatest significance in helping to generate the force for trend changes, facilitating K-line breakthroughs of trends.
So is the term 'relay' more appropriate? The problem is that the triggering frequency of structures in larger cycles like daily charts is too low, so one needs to look for opportunities in smaller cycles, even though the strength and impact time of smaller cycles are not as significant as larger cycles.
5. If the price is very close to the trend, then any structure formed on any cycle may eventually lead to a breakthrough in the trend; what if the price is somewhat far from the trend?
Small cycles may ultimately not lead to breakthroughs, but large cycles can; if the price is particularly far from the trend, it's possible that no structure formed in any cycle can break through. However, the appearance of 'structure' is the standard for buying, and one has to buy. What to do?
6. For this relatively complex issue, my answer is: refined position management.
“Simplify complex matters, standardize simple matters, and systematize standardized matters.”
What is simplification? It means listing possible situations one by one.
What is standardization? It means creating response protocols for each simple situation.
What is systematization? It means that when encountering certain situations, one should unconditionally act like a robot and follow the terms.
7. 'Position management' will be discussed in detail in later chapters. If there is one thing in this 2.0 trading system that lacks precise quantification, it is the judgment criterion for how 'far' the price is from the trend. This judgment is simple for me, but I also want to quantify it as much as possible. However, there is no way, as it is related to different trading markets and experiences. There is no need to worry; even if it cannot be accurate, it does not significantly affect the results.
8. Regarding the choice of time periods, it depends on individual preferences and actual situations. This includes when someone asked how to choose the period for drawing lines, which is the same issue. Generally, I use daily charts as the main period and smaller time frames as support, and I generally do not consider periods shorter than 30 minutes to avoid exhausting my energy on a daily basis. With such a combination of periods, you only need to check occasionally, and sometimes it's fine not to look for several days, just keep an eye on the market at special nodes.
9. If trading cryptocurrency is a side job and you have no time to monitor the market, choose weekly or even monthly periods as the main cycle for long-term trading and use daily or smaller cycles for support; you may not need to trade once a year.
If using minute-level periods as the main focus, such as 30 minutes, 15 minutes, or 5 minutes, it would be ultra-short-term trading, requiring continuous monitoring and higher execution demands, suitable for professional players. I occasionally dabble in it when my energy allows.
10. Sequence is a headache. Over the years of trading cryptocurrency, I have yet to spend time and effort optimizing this indicator. Although 'sequence' performs excellently in stock markets, I haven't given it any position weight. In other words, no matter how accurate it is, it cannot guide any position buying or selling operations based on its trigger standard, because besides lacking a trading closure, it has a fatal flaw: it performs poorly in one-sided markets.
11. Specifically, the 'sequence' has displayed poor performance in one-sided markets due to underlying logical flaws in programming design. Once it fails, it tends to make mistakes of selling too early or buying too early, and its error correction mechanism does not have statistical advantages.
This is a major taboo in trend investing and cannot be tolerated. Here, I don't want to elaborate too much on sequences because their overall success rate in the crypto space is even more disappointing, and optimization is needed.
12. If optimized well, it could achieve the accuracy of the stock market, making it a great helper for 'structure.'
Its greatest significance lies in assisting in judging the formation of structures. Especially in a passive state, if a 'sequence' trigger signal appears, the probability of structure formation will greatly increase. I probably lack the motivation to spend more time optimizing it, and its absence does not significantly impact the overall trading system. Interested friends may want to give it a try.
