Hello everyone, I'm Nianjiu, focused on cryptocurrency for ten years. If you are also a tech enthusiast and have been diligently studying trading techniques, you will gain the latest news and trading strategies in the cryptocurrency market!
Let's talk about fund management first. Never invest all your money at once. I prefer to operate in batches, so even if I incur losses, it won't be too severe. I set a rule for myself: once I lose to a certain extent, I withdraw decisively, regardless of the market situation. This way, even if I experience several consecutive losses, it won’t be too damaging, but if I make a profit, the returns can be quite substantial. Even if I'm stuck in a position, I can maintain a stable mindset.
Following market trends is definitely the right choice. When the market is down, don't always think about bottom fishing; it’s unrealistic. The best opportunities arise during market corrections when buying low is much safer than trying to catch the absolute bottom.
Choosing coins requires vision; those that suddenly surge, whether mainstream or altcoins, should be approached with caution. Rapid increases are often followed by steep corrections, making it easy to get trapped.
In terms of technical indicators, I often use MACD. When the DIF line and DEA line cross below the zero axis and then break above it, it's a buy signal. If they cross above the zero axis and then move down, you need to reduce your position. Never try to average down lightly. If you incur losses, don’t average down; many people end up losing everything by doing so. Remember, losses must be cut, and profits can be increased.
Trading volume is also critical. When the price breaks out from a low level accompanied by increased trading volume, it could be a significant opportunity.
The most critical point is to follow the trend. By combining daily and monthly charts for comprehensive judgment, when any line starts to incline upwards, you'll know how to operate.
In summary, trading cryptocurrencies carries both risks and opportunities. I hope my experiences can help everyone, but I must remind you to invest cautiously!
The basic principles of Dow theory, combined with the actual situation in the cryptocurrency market, can be summarized with the following six points:
First, average prices encompass and digest all factors. Fundamentals, policy, news, and capital can all influence supply and demand, and all of this is visually reflected in the market, with prices changing to digest and absorb these factors.
Second, the market has three types of trends. Dow categorized trends into three types: primary trend, necessary trend, and short-term trend.
The major trend is like the tides of the ocean, representing long-term trends, similar to the cyclical nature of the cryptocurrency market, where bull and bear markets cycle endlessly.
Minor trends are like waves in the tides, representing pullbacks within the major trend, usually retreating to three significant Fibonacci levels: 38%, 50%, and 62%. Short-term trends are like ripples, referring to subtle fluctuations, which carry high uncertainty and change rapidly.
Thirdly, the major trend can be divided into three phases. The first phase is the accumulation phase, similar to the yin-yang concept; it means that the bear market is coming to an end. Although everyone is bearish, the price has fallen as much as it can, and the main forces begin to accumulate in batches at this time.
The second phase is the bullish offensive phase, where favorable news starts to emerge, and most retail investors with some technical knowledge gradually enter the market, leading to a steady price increase.
The third phase is the climax sprint, during which major media outlets begin to flood the market with good news, boldly predicting further price increases. Retail investors actively buy in, unwilling to sell, fearing they might miss this rare opportunity to profit, but in reality, the main forces that bought at the bottom are already starting to sell.
Fourth, various average prices must mutually validate each other. For example, both Bitcoin and mainstream coins must collectively exceed the peak of the previous medium-term trend to be considered the onset of a large-scale bull market! Similarly, if both Bitcoin and mainstream coins fall below the neck line of the high-level fluctuation phase in the bull market, it indicates a potential downturn.
Fifth, trading volume must validate the trend. Dow believed that volume holds the second position in technical analysis; when prices move in accordance with the major trend, trading volume should also increase correspondingly.
Sixth, we can only determine that a given trend has ended after a clear reversal signal occurs. A major trend has inertia and usually continues to move in the primary direction for a while, so it’s essential to wait for trend confirmation before declaring a reversal, such as confirming a shoulder-head-shoulder pattern breaking the neck line indicates a trend reversal.
Dow theory is a macro technical analysis system aimed at capturing the most significant segments of important market movements, which is essentially the most valuable part of the 'fish belly'.
Its advantage lies in successfully determining the major trends of bull and bear markets. However, its disadvantages are also quite obvious, as the signals are usually delayed, generally missing out on 20%-25% of profit potential.
Sharing insights on trading cryptocurrencies:
1: Regularly invest in mainstream and leading coins. Regular investment is better than lump-sum buying; full-position buying has a higher probability of making money. If you buy everything at once and the price drops later, it will be difficult to average down. Watching the price drop without being able to accumulate more coins is particularly uncomfortable, as you miss the opportunity to lower your cost. Even in a bull market, your profits will be much lower.
2. Enhance your ability to earn outside the market.
In the market, it's primarily about buying cryptocurrencies and accumulating them. If you want to hold onto your coins, you also need to improve your ability to earn money outside the market. Your earning potential depends on your job; if you have plenty of time, invest more in yourself, learn more, acquire new skills, and follow me as a Twitter KOL to turn traffic into cash.
3. Invest more in areas you are familiar with.
Invest more in areas you are familiar with, as this allows you to better control risks. Investing in unfamiliar domains may lead to more losses. By increasing cash flow in familiar areas, you can achieve higher returns and avoid selling valuable coins when prices drop.
4. In-depth study of speculative trading techniques.
Familiarize yourself with the development trajectory of historically high-return coins. You need to establish your own profitable trading strategy and continuously optimize your coin selection and timing through practice.
Revealing small tips for trading cryptocurrencies:
1. Invest with spare money; avoid borrowing money to trade cryptocurrencies—invest money + invest energy.
2. Rigorously select valuable coins and create a reasonable capital allocation plan that aligns with reality—Sunny Investment Strategy.
3. Averaging down—it's normal to experience pullbacks after entering the market, so allocate your funds reasonably and enter in batches.
4. Reject full-position trading; allocate positions reasonably. Don't put all your eggs in one basket to effectively reduce risks.
5. Keep your eyes open—stay updated on cryptocurrency news and the latest financial and economic information. The sooner you know, the better you can understand and profit.
6. Think in reverse; do not oppose institutional investors or market trends, go with the flow, and act according to the situation.
7. Open contracts without fully leveraging, keeping leverage below 5 times, and avoid using 100 times leverage. Strive for steady profits instead of seeking overnight wealth.
8. Manage your own profits well—controlling your position is more important than anything else. If you're unsure, don't act lightly. Not acting means no risk, and you won't lose money. Regularly check whether your assets are managed properly and reasonably.
9. The bottom and top exist in your mind; don't be afraid. The cryptocurrency market will only help you grow. A good mindset is more important than execution. Remember the principles of trading cryptocurrencies, and you won't worry about not making money!
Investing is not a competitive game; it's a personal journey of self-cultivation.
In fact, there's another saying: Every penny you earn is the realization of your understanding of this world.
Spend an evening summarizing six iron rules for trading cryptocurrencies. The content is brief but packed with practical insights. If you don’t plan to leave the cryptocurrency space in the next three years, these six rules will help you immensely!
Strong recovery and doubling assets! Stay ahead of the curve and layout in advance for easy and significant gains.
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