If you want to trade cryptocurrencies for a lifetime but do not understand the technology and cannot find a suitable trading method, you might as well try this 'Piling Battle Strategy for Wave Trading.' It is simple and practical; even if you are a new trader, you can operate it easily with an accuracy rate of over 80%. In the cryptocurrency market, both buying and selling can be done according to this method! It is recommended to save this. Is it difficult to make money from trading cryptocurrencies?
Ten years ago, I entered the cryptocurrency market like most retail investors, thinking that profits and losses were all about luck, unable to grasp any patterns. However, after spending several years in the cryptocurrency space, through constant learning and absorption, along with mentors and seniors continuously sharing and guiding me, I gradually started to understand and formed my own investment system! Now my assets have reached several thousand.
In addition to the solid Piling Battle Strategy, I strictly adhere to these 10 iron rules! Whether in a bull market or a bear market, whether you are a novice just starting out or an experienced veteran, as long as you make good use of these [10 iron rules for trading cryptocurrencies], achieving a 30-fold increase in one month is not a fantasy!
Iron Rule 1: Identifying Signals for Trend Reversals
In a downward trend, if there are three or more consecutive bullish candlesticks rebounding, or in an upward trend, if the bearish candlestick retracement does not exceed three consecutive bearish candlesticks, this is likely a warning signal for a trend reversal and should be closely monitored.
Iron Rule 2: Guidelines for Breakout Operations
In a fluctuating market, a period of rising volume with stable prices often leads to a major breakout. In terms of operations, one can buy on dips and wait for two bullish volumes to exceed the previous bearish volume to intervene early and seize the opportunity.
Iron Rule 3: Holding Strategy in Strong Markets
The holding strategy in a strong market is very simple: as long as the daily line does not fall below the rising moving average, hold firmly. Do not be disturbed by technical indicators, especially in high-level stagnation states, to avoid getting off too early.
Iron Rule 4: K-line Combination Analysis Techniques
A medium bullish candlestick paired with two doji candlestick patterns usually indicates a continuation of an upward trend. This is also a typical bullish pattern for strong cryptocurrencies, and upon discovery, one can actively participate. #大而美法案
Iron Rule 5: Unconventional Market Psychology
The market often goes against the opinions of most people. The smoke screens released by the main players and the market tops usually appear when everyone is optimistic; one must maintain independent thinking and contrarian thinking.
Iron Rule 6: Key Points of KDJ Indicator Usage
When encountering consecutive large bearish candlesticks, if the KDJ's J line is below -12, it indicates that a short-term rebound is imminent. At this time, do not rush to act; wait for the rebound to appear before making a judgment to avoid blindly bottom fishing.
Iron Rule 7: Key Features of Breakout Bullish Candlesticks
During upward breakouts, a turnover rate of around 8% for bullish candlesticks is considered a healthy attack volume. If the turnover rate is too high or too low, it may trigger a retracement, so caution is needed.
Iron Rule 8: Core Principles of Risk Control
Never operate with a full position; always leave room. Market risks are everywhere, and acting cautiously can leave you space for corrections, protecting your principal.
Iron Rule 9: Essential Mindset for Emotional Control
When trading cryptocurrencies, maintain a calm and rational mindset, and treat market fluctuations correctly. Never let emotions influence your decisions; a stable mindset allows you to go far. #美股代币化
Iron Rule 10: The Path of Learning, Communication, and Growth
Do not work in isolation; communicate and share with other cryptocurrency traders. Even if the other person's opinion is wrong, it is still valuable experience on your growth path. Only by progressing together can you walk more steadily in the cryptocurrency space.
The above 10 iron rules are all validated by my real money in the market. I recommend everyone to read them repeatedly and remember them. I believe that as long as you use them proficiently, your trading skills will surely improve dramatically!
The Piling Battle Strategy for Wave Trading in the Cryptocurrency Market.
Whether trading waves or trends, you must know where the entry and exit points are! This is the key to the key!
Some people are very precise in grasping entry points but do not know when to exit; they may earn points but not profits. In fact, the core principle remains unchanged whether in a large wave, small wave, or an entire trend.
Entry points can be referenced from previous articles on bottom fishing. As for how to control exit points, they are generally divided into two types: left-side trading and right-side trading.
If you have accurate judgment, you can choose left-side trading. The advantage is that you won't lose, it's just a matter of how much you earn; the downside is that you might catch small profits at the cost of missing out on larger gains. If you are unsure how high this cryptocurrency can go, then choose right-side trading. The advantage is that you can capture the entire wave, but the downside is that you may face larger pullbacks, which is significantly related to the manipulative tactics of market makers.
As shown: a complete wave may include many small waves, such as the first wave, second wave, third wave, etc. For example, if point A is the entry point and you take profit at point B or exit at point C, that is considered left-side trading.
If you enter from point A and exit at point D, that is considered a right-side trade.
Left-side trading only takes a portion, while right-side trading often represents a trend.
How to determine if it's the left side or the right side? #币安Alpha上新
I won't elaborate on entry points here; you can refer to previous articles on how to bottom fish. The criteria are: K line crosses above the 120 line, moving averages form a golden cross, MACD crosses above zero, for example, see the diagram below:
The second chart is also a typical 'one kick out a big dark horse' pattern.
For exit points, those who can manage left-side trades generally have their own market feel, exiting cleanly at the right moment. If you are unsure and want to do left-side trading, you should reference the following indicators: watch the volume; a sudden surge in volume or an extremely high volume indicates it's time to exit. If the volume increases slowly, congratulations, your profits are substantial; wait for a sudden surge in volume or a decrease in volume before exiting!
For example, the above chart shows a sudden surge in trading volume, which often results in a quick move, and waiting for a pullback can allow for re-entry; such a line often serves as the starting gun for a trend or a charge signal.
In summary, one principle: be cautious when there is a sudden surge in volume.
So how do you determine if the wave has ended?
'The head' has appeared, which signifies the end of the wave. Where is 'the head'?
A principle to follow: If new highs are not made, it is a bad sign!
In the above chart, when point B appears, it indicates that the head has formed. The exit point at point C indicates right-side trading.
The logic behind the appearance of the head: most of the chips held by the market makers have already been distributed before point A, having gained sufficient profits. The remaining chips are insufficient to push for a new high, so at point B, there is a deceptive upward movement to distribute the remaining chips. After that, the retail investors who have been at odds with each other will have no support from market makers, and prices will plummet!
Regardless of the investment, we should not overly rely on indicators, but the basics must still be mastered.
After all, every indicator has its limitations and lag, so it's best to combine multiple indicators.
Combining various information and the larger environment, especially in the cryptocurrency market, which involves the factors of market manipulators, the indicators will be relatively more complex.
Wave indicators are divided into three major categories: oscillating, trending, and energy indicators.
Oscillating indicators can display the oversold and overbought conditions of localized K-line prices, providing qualitative price positioning.
It is relatively suitable for short-term operations, and representative indicators include KDJ and RSI. For those with no foundational knowledge, you must first read articles and understand the meaning and usage of each indicator.
Trend indicators can define trends over a period of time and linearize price movements. Representative indicators include MACD and MA.
Generally speaking:
The golden cross and dead cross on the 15-minute chart can predict half a day's trend.
The golden cross and dead cross on the 30-minute chart can predict the trend for one day.
The golden cross and dead cross on the 60-minute chart can predict trends for two days.
In general, the smaller the selected cycle, the more precise the buy and sell price levels.
Energy indicators are derived from trading volume data, with VOL being one of the more common ones.
VOL is composed of volume bars and moving averages. If the closing price on that day is higher than or equal to the previous day's closing price, the trading bar will be red; otherwise, it will be green. Using VOL, one can visually observe the relationship between volume and price.
Basic Usage
Golden Cross and Dead Cross
(1) Golden Cross
The MACD golden cross occurs when the DIF line (white line) crosses upward through the DEA line (yellow line), and the DIF must be above the DEA while moving upward simultaneously. At this point, the bullish forces dominate, and the MACD golden cross is a very good buy signal for the medium to long term. However, if the golden cross occurs while the DIF line and DEA line are below the zero axis, it indicates that although the bullish forces currently dominate, caution is needed to prevent a pullback.
(2) Dead Cross
The MACD dead cross occurs when the DEA line (yellow line) crosses downward through the DIF line (white line), and the DIF must be below the DEA while moving downward simultaneously. At this point, the bearish forces dominate, and the MACD dead cross is a very good sell signal for the medium to long term. If the dead cross occurs above the zero axis, it may either be a temporary retracement before continuing to rise or the beginning of a major retracement.
Top Divergence and Bottom Divergence
Divergence literally means deviating from the established, normal path. In the cryptocurrency market, it refers to a situation where the price is trending upward or downward, but the technical indicators move in the opposite direction, indicating divergence.
Essentially, this is because for certain reasons, prices and indicators show different trends, leading to a phenomenon where the indicators cannot synchronize with the price.
Divergence is divided into two types: top divergence and bottom divergence.
Top divergence refers to a situation where the cryptocurrency price continues to rise, but the MACD technical indicator's graphical representation shows a series of peaks that are lower than the previous ones, indicating top divergence. At this time, bearish forces strengthen, making it a relatively good signal for exiting.
A bottom divergence refers to a situation where the cryptocurrency price continues to decline, but the MACD technical indicator's DIF line has a smaller decline or even rises, indicating a bottom divergence. At this time, the bullish forces strengthen, making it a relatively good signal for bottom fishing.
PS: The DEA line will be more accurate, but it requires a longer period, and the process will be slower.
(1) RSI Indicator
The theory of strength indicators suggests that any significant increase or decrease in market price fluctuates between 0-100. Based on normal distribution, the RSI value usually fluctuates between 30-70, and is generally considered overbought when reaching 80 or even 90. This value may be higher in the cryptocurrency market, and at this point, the market price will naturally retrace. When the price RSI falls below 30, it is considered oversold, and the market price is likely to rebound.
(2) KDJ Indicator
When K is below 20 and D is below 30, it indicates an oversold zone. Generally, the cryptocurrency price may rise, increasing the likelihood of a rebound, and one can look for an entry point. When K is above 80, D is above 70, and J is greater than 90, it indicates an overbought condition. Generally, the cryptocurrency price may decline, and one should sell in a timely manner.
Insights on Wave Trading
In fact, wave trading is not that complicated. In summary, it involves buying at low points, selling at high points, integrating multiple indicators for analysis, paying attention to profit-taking and stop-loss, and avoiding frequent trades or large positions; controlling risk is key.
For retail investors, the most challenging points are the entry and exit points.
In fact, it is not particularly difficult to determine points, as there are many pieces of information that everyone knows, such as Litecoin's halving. However, many retail investors want to buy at the lowest point and sell at the highest point, fearing being caught or cut off, while also worrying about being left behind. The key issue is greed; they always think that if they wait, the price can still go up.
Therefore, when trading in waves, one must first recognize the overall market trend. Understand whether it is a bull market or a bear market, and whether the market is in an upward trend or a downward trend. Next, confirm the risk and reward ratio of the cryptocurrency you want to buy, and finally understand whether you are operating on a large, medium, or small wave. You should have a mental positioning for the profit-taking time point and price range.
The biggest taboo in wave trading is greed; being greedy can easily cause you to miss the best profit-taking range.
Do not chase after fish heads, do not eat fish tails, do not seek to buy at the lowest point, and do not wait to sell at the highest point.
Doing so has the disadvantage of not maximizing profits; sometimes you may miss out on big gains, leaving many regrets. The advantage is that the risk factor is relatively low, with a high safety factor, winning mentality, and always maintaining initiative.
Of course, using technical indicators in conjunction with quantitative analysis is excellent, like adding wings to a tiger; they complement each other.
Creating original content is not easy; I am Yan An, and I only share valuable content for retail investors daily! The soul has its path; the above content is based on my over ten years of experience in the market, continuously summarizing and reflecting, leading to today's achievements. It seems simple, but achieving unity of knowledge and action is not easy. I hope to help many friends in the cryptocurrency space avoid detours!