I always feel that the dumbest way to trade cryptocurrencies is often the most effective.
But this path is too slow and too boring, and most people cannot stick to it. Because they always fall into these three major "common problems":
⚠️ One is chasing high and killing low. As soon as you see the coin rise, you rush in, fantasizing that it can continue to soar, but end up buying at a high point, panicking when it falls, and missing the rebound. Those who can get used to buying during declines and selling during peaks are the ones who truly benefit from the cycle.
⚠️ Two is betting heavily on direction. The direction is correct, but the main force washes the position a few times and gets swept out. It's not a wrong judgment, but rather not being able to hold on.
⚠️ Three is emotional full warehouse. Excitedly going All in loses flexibility in reallocating funds. Even if you see it right, you can't move your money, and when the opportunity arises, you can only be anxious.
Ultimately, in the cryptocurrency world, it's not the market that loses, but the habits.
I have summarized a set of short-term 'six-word formula', the principle is simple, yet easily overlooked:
1⃣️ High-level consolidation is not over; new highs are often still behind; low-level fluctuations are hard to stop and can easily probe lower. Do not act until a trend change occurs.
2⃣️ Do not act during sideways moves. Most people fail during fluctuations.
3⃣️ Buy when the daily line closes red, sell when it closes green. Follow market sentiment, it surpasses subjective judgment.
4⃣️ Slow declines are hard to bounce back, while sharp declines are easy to reverse. Only by seeing the rhythm can you seize the opportunity.
5⃣️ Pyramid building, entering in batches, always leaving bullets.
6⃣️ After big ups and downs, there must be fluctuations, and after fluctuations, there will definitely be a trend change. Don't bet at extreme positions; wait for signals to act.
The market doesn't lack opportunities; what it lacks are people who can endure, can wait, and can survive. You think experts rely on luck; in fact, they push the “dumb method” to the extreme.
In the cryptocurrency world, using candlestick charts to determine entry timing is an important technical analysis tool. Here are some methods for determining entry timing based on candlestick charts:
1. Identify the trend.
• Uptrend: If multiple bullish candles (green) appear consecutively on the candlestick chart, and each bullish candle's closing price is higher than the previous one's closing price, it indicates that the market is in an uptrend.
• Downtrend: If multiple bearish candles (red) appear consecutively, and each bearish candle's closing price is lower than the previous one's closing price, it indicates that the market is in a downtrend.
• Trend reversal signals: Certain specific candlestick patterns such as hammer, inverted hammer, morning star, engulfing patterns, etc., usually appear during trend reversals and can serve as entry signals.
2. Pay attention to support and resistance levels.
• Support level: When the price falls to a certain range and repeatedly bounces back, that range is the support level. If the price approaches the support level and a bullish candlestick pattern appears (like a hammer), consider entering to go long.
• Resistance level: When the price rises to a certain range and repeatedly falls back, that range is the resistance level. If the price approaches the resistance level and a bearish candlestick pattern appears (like a hanging man), consider entering to go short.
3. Volume-price coordination.
• Volume-price coordination in an uptrend: If the price rises while the trading volume also increases, it indicates strong buying power in the market. At this time, consider entering to go long.
• Volume-price coordination in a downtrend: If the price drops while the trading volume increases, it indicates strong selling power in the market. At this time, consider entering to go short.
4. Special candlestick patterns.
• Hammer: Appears at the bottom of a downtrend, with a long lower shadow at least twice the body, indicating that the market may reverse upwards, serving as a signal to enter and go long.
• Inverted hammer: A shape similar to the hammer, but with the shadow above, indicating that the market may reverse upwards, suitable for entering to go long.
• Three white soldiers: Composed of three consecutive bullish candles, where each bullish candle closes higher than the previous candle's high, indicating a strong upward market, suitable for entering to go long.
• Bullish engulfing line: A long bearish candle followed closely by a shorter bullish candle, with the bullish candle entirely within the body of the bearish candle, indicating that the downtrend may end, suitable for entering to go long.
5. Combine technical indicators.
• Moving average crossover: When a short-term moving average (like the 5-day moving average) crosses above a long-term moving average (like the 10-day moving average), forming a golden cross, it indicates that the market may enter an uptrend, serving as a signal to enter and go long.
• MACD indicator: When the short-term MACD line crosses above the long-term MACD line, forming a golden cross, it indicates that the bullish trend in the market is strengthening, suitable for entering to go long.
6. Risk management.
• Set stop-loss: When entering the market, it's advisable to set a stop-loss point to control risk. The stop-loss point can be set outside of key support or resistance levels.
The cryptocurrency world has allowed me to accumulate about a million in profits over the years, with an initial capital of 80,000, and I've been trading cryptocurrencies full-time for 10 years. During this time, I have experienced many ups and downs, but I really made big money through two bull market opportunities. Here are some of my experiences and lessons learned:
1. Control the risk of each trade within 10% of the principal. It's not recommended for beginners to take risks, and it's best to control the risk within 2%-5%.
2. Once you enter the market, do not close positions due to short-term fluctuations or impatience; the market needs time to prove itself; patience is necessary.
3. Execute according to the plan in trading, avoiding over-trading, or else it's easy to make mistakes.
4. After making a profit, gradually adjust your take-profit and stop-loss, daring to follow market trends to maximize profits.
5. Never cancel stop-loss points at any time; this effectively controls risk.
6. It is not recommended to add positions when the market is going smoothly; greed often leads to huge risks.
7. Transitioning from long to short requires a high level of technical skill; not everyone is suited for arbitrary position switching.
8. When trading goes smoothly, do not easily increase positions; overconfidence can easily lead to significant mistakes. The above insights are experiences I have summarized from years of struggle in the cryptocurrency world, and I hope they are helpful to you.
