I have been in the cryptocurrency space for 10 years. To be honest, I have indeed earned what I wanted. Many of my friends are also A8A9, and it is the result of years of holding coins and a long-term mindset that has led to today. Many people in the current crypto market focus primarily on short-term trading and cannot hold at all. Never enjoy the process; friends who only understand how to enjoy the process often do not have a good ending.
This article is not a science fiction, but a trailer for friends in the cryptocurrency space. Today, what Lele shares is knowledge gained through experience.
The three major laws of playing in the cryptocurrency space make trading easier.
Many people say: The longest road I have traveled is the tricks of the cryptocurrency space. Many people enter the cryptocurrency space with the attitude of making money, not realizing that only 10% of people are profitable in reality, while the remaining 90% can only become pitiful retail investors being cut. So, how can one become part of the 10% who make money? Let's find out.
Newton discovered the three laws of motion, becoming a master of physics. Now today, can everyone support the three major laws of the cryptocurrency space summarized by everyone? Haha.
1: The correlation rules in the cryptocurrency space.
When Bitcoin (BTC) rises, mainstream coins follow; when Bitcoin falls, mainstream coins plummet; when Bitcoin consolidates, altcoins go wild; when Bitcoin plummets, altcoins flee.
The correlation pattern in the cryptocurrency space is generally known. Basically, each time, Bitcoin leads, and other coins follow Bitcoin's lead. What is said here is not absolute; it is mostly how major trends evolve. For example, this year, from the beginning of the year to now, the small bull market has been driven up by Bitcoin. Of course, some altcoins, tokens, and single-machine coins are exceptions.
Patience is required to wait for buying opportunities, while selling opportunities should not be delayed. The operation of grabbing rebounds is different from operations in an uptrend. In an uptrend, you generally wait until the upward momentum ends, when the coin price has stopped rising and starts to decline before selling. However, in a rebound market, selling should not wait until the upward trend is about to end. In grabbing rebound operations, it is emphasized to sell early; generally, after making a profit, one should decisively take profits. If, for some reason, you have temporarily not made a profit, and the market's rebound is about to reach its theoretical space, you should also sell decisively. The duration and price increase of a rebound are both limited, and if you wait until the confirmation of a phase-top before selling, it is generally too late.
The third law: The law of the retail investors.
The world originally had no retail investors; when more people are eager for quick success, they inevitably become retail investors!
If you want to turn things around, don't dwell on temporary gains and losses; being overly concerned about gains and losses makes it difficult to seize opportunities for success!
Finally: Summarize Lele's three investment decisions: 1. Invest in what you know; 2. Hold steadfastly; 3. Be prepared for overall planning.
How to view digital currency MA average lines? Basic tutorial on MA average line indicators.
This article is a basic introductory article on moving averages. I will guide everyone to understand what moving averages are and how to use the MA average line system in trading in a gradual manner. Moving averages are one of the most common and fundamental analysis indicators, reflecting the average cost changes over a period of time. The moving average and the system formed by multiple moving averages are often used to judge market trends, and under certain conditions, moving averages can serve as support and resistance.
1. Definition of MA average line.
(Moving average), i.e., moving average line. The moving average (MA) is based on Dow Jones's "average cost concept" and uses the statistical principle of "moving average" to connect the average values of product prices over a period, visually showing the historical price fluctuations and reflecting the future development trends of price indices through technical analysis. It is a visual representation of Dow's theory.
2. The calculation method of moving averages.
The calculation method of the moving average (MA) is to find the arithmetic average of the closing prices over several consecutive days. The number of days is the parameter of MA. In technical analysis, moving averages are essential indicator tools. Moving averages utilize the statistical principle of "moving average" to calculate a trend value from daily market prices, serving as a tool for analyzing price trends.
Calculation formula: MA = (C1+C2+C3+C4+C5+....+Cn) / n where C is the closing price, and n is the number of moving average periods. For example, the calculation method for the 5-day moving average price of Bitcoin is: MA5 = (closing prices of the previous four days + closing price of the previous three days + closing price of the day before yesterday + closing price of yesterday + closing price of today) / 5.
Moving averages can be divided into three types based on the length of time: short-term moving averages, medium-term moving averages, and long-term moving averages. Short-term moving averages are generally calculated over 5 or 10 days, medium-term moving averages are mostly calculated over 30 or 60 days; long-term moving averages are mostly calculated over 100 days and 200 days.
3. MA average line cycle charts.
When combined with cycle charts, MA represents the multiple values. For example, if a one-hour chart is used, then MA5 represents the average value for 5 hours; MA10/MA30/MA60 represent their corresponding values.
When using a four-hour chart, MA5 represents the average value for 4 hours multiplied by 5; MA10/MA30/MA60 correspond to 10 times/30 times/60 times the four-hour values respectively.
In daily usage of the MA average line, it is mostly used on daily cycle charts, so MA5/MA10/MA30/MA60 correspond to the respective 5-day/10-day/30-day/60-day averages.
Note: When calling the MA average line indicator, the value behind MA can be set according to your own habits, such as
MA5/MA10/MA20/MA30/MA40 and so on, the most commonly used are generally MA5/MA10/MA30/MA60 four average lines. Below, I will explain these four average lines.
4. The significance of MA average lines and Gann's eight major rules.
(1) When the average line gradually turns from descending to a sideways upward trend, and the price breaks above the average line from below, it is a bullish signal.
(2) Although the price breaks below the average line, it immediately rebounds back above the average line, and at this time, the average line continues to rise, which is still a bullish signal.
(3) When the price trend is above the average line, and the price drops without breaking below the average line and immediately reverses upward, it is also a continued bullish signal.
(4) When the price suddenly drops, breaking below the average line and moving far away from it, there may be a possibility of a sharp drop followed by a rebound, which is also an opportunity for short-term long positions.
(5) When the average line gradually turns from rising to sideways or declining, and the price breaks below the average line, it is a bearish signal.
(6) Although the price breaks above the average line, it immediately falls back below the average line. At this time, the average line continues to decline, still indicating a bearish signal.
(7) When the price trend is below the average line, and the price rises without breaking above the average line and immediately reverses downward, it is also a continuous bearish signal.
(8) When the price suddenly surges, breaking the average line and moving far away from it, there may be a possibility of a sharp rise followed by a pullback, creating an opportunity for short-term shorting.
The memory of Gann's rules is not difficult to remember as long as you grasp the ideas of support and resistance.
5. Characteristics and key points of MA.
The MA moving average line, as mentioned earlier, can be divided into three types based on the length of time: short-term, medium-term, and long-term moving averages. If the market price is below the 200-day average line, it belongs to a bearish market; conversely, it is a bullish market.
(1) The basic idea of MA is to eliminate the impact of random price fluctuations and seek the trend of price movements. It has the following characteristics:
Follow the trend. MA can indicate the direction of price trends and track this trend. If you can identify an upward or downward trend from the price chart, then MA will remain consistent with the trend direction. The price chart of raw data does not possess this trend-tracking characteristic.
Lagging. When the original price trend reverses, due to MA's trend-tracking feature, its actions are often too slow, and the turnaround speed lags behind the major trend. This is a significant weakness of MA.
Stability. According to the calculation method of moving averages, to significantly change the moving average value, the market price of the product on that day must change greatly because MA is the average value of price fluctuations over several days. This characteristic also determines the lagging nature of moving averages in reflecting prices. This stability has its advantages and disadvantages, and care should be taken in application to master the right balance.
Supportive and depressive qualities. When the market price breaks through the moving average line, whether it is an upward or downward breakout, the price fluctuations have the inertia to continue in the direction of the breakout.
Characteristics of support and resistance lines. Due to the four characteristics of MA mentioned above, it plays the role of support and resistance lines in price trends. In trading, we often look for price support and resistance levels on the MA average lines. When MA is broken, it is actually the support and resistance lines that have been breached.
The role of MA parameters is actually to adjust the characteristics mentioned above. The larger the parameter selection, the greater these characteristics become. For example, the bullish and bearish effects of breaking through the 5-day line and the 10-day line are completely different; the 10-day line has greater strength than the 5-day line.
(2) Drawbacks.
The moving average line has many advantages, but also obvious drawbacks. For example, it cannot respond to sudden market conditions in a timely manner and has a lagging reaction; deceptive trends often appear in the moving average line, etc. To overcome these shortcomings of moving averages, the only way is to organically combine the moving average line analysis method with other technical methods, such as candlestick analysis, trend line analysis, etc. Investors should pay close attention to this!
(3) The application rules of MA. The most common application of MA is Gann's "Eight Major Trading Rules for Moving Averages." This rule is based on the deviation relationship between price (or index) and moving averages for judgment. Among the eight rules, four are buying rules and four are selling rules. In the above paragraph, Wen Wang has already listed the eight major rules.
6. Common scenarios of moving averages and the trends they indicate (using daily charts as an example).
1. Golden cross pattern.
In the early stages of an uptrend, when the short-term moving average line breaks above the medium and long-term moving average lines from below, the cross formed is called a golden cross.
Indicating that the price will rise: the short-term MA5 average line (white line) crosses up through the short-term MA10 average line (yellow line), forming a cross line generally known as a golden cross! The short-term MA10 average line (yellow line) crosses up through the medium-term MA30/MA60 average lines (purple line/blue line), forming a cross line also known as a golden cross!
2. Death cross pattern.
When the short-term moving average line breaks down through the medium and long-term moving average line, the cross formed is called a death cross.
Indicating that the price will drop: the short-term MA5 average line (white line) crosses down through the short-term MA10 average line (yellow line), forming a death cross! The short-term MA10 average line (yellow line) crosses down through the medium-term MA30/MA60 average lines (purple line/blue line), forming a death cross!
3. Bullish arrangement.
In an uptrend entering a stable period, the 5-day, 10-day, 30-day, and 60-day moving averages are arranged sequentially from top to bottom and move upwards, which is called a bullish arrangement.
Indicating that the price will rise significantly: From top to bottom, the structure formed by the short-term MA5 average line (white line), short-term MA10 average line (yellow line), medium-term MA30 average line (purple line), and medium-term MA60 average line (blue line) arranged upwards is a bullish arrangement! A bullish arrangement indicates that the price is in an upward trend!
4. Bearish arrangement.
In a downtrend, the 5-day, 10-day, 30-day, and 60-day moving averages are arranged sequentially from bottom to top and move downwards, which is called a bearish arrangement.
Indicating that the price will drop significantly: From bottom to top, the structure formed by the short-term MA5 average line (white line), short-term MA10 average line (yellow line), medium-term MA30 average line (purple line), and medium-term MA60 average line (blue line) arranged downwards is a bearish arrangement! A bearish arrangement indicates that the price is in a downward trend!
5. In an uptrend, when the price is above the moving average line, the bullish arrangement of the average line can be regarded as the bulls' defense line; when the price retraces to near the moving average line, each moving average line generates support power in turn, and buying funds enter the market to push the price up again. This is the bullish effect of the moving average line.
6. In a downtrend, when the price is below the moving average line, and the moving average lines are in a bearish arrangement, they can be seen as the bears' defense line. When the price rebounds near the moving average line, it will encounter resistance, leading to selling pressure and further price drops, which is the bearish effect of the moving average line.
7. When the moving average line transitions from ascending to descending, reaching a peak, and from descending to ascending, reaching a low point, it is a turning point for the moving average line, indicating a reversal in price trends.
Methods for judging cryptocurrency trends.
Effective methods for judging cryptocurrency trends.
Judging the cryptocurrency trend is a key factor in investing in cryptocurrencies. Here are some effective methods:
1. Technical analysis.
Chart patterns: Identify patterns that repeatedly occur on charts, such as trend lines, support levels, and resistance levels, which can indicate potential trends and reversals.
Indicators: Such as moving averages, Relative Strength Index (RSI), and Bollinger Bands, can help analyze price trends and momentum.
2. Fundamental analysis.
Project team: Research the backgrounds, experiences, and reputations of team members, as these can affect the project's credibility and long-term prospects.
Technology: Assess the underlying technology of a project, such as consensus mechanism, smart contracts, and scalability, to understand its potential and sustainability.
Competitive landscape: Analyze the competitors existing in the market, including their products, market shares, and technological differences.
3. Market sentiment.
Social media: Pay attention to discussions and sentiments on social media, as this can reflect public views on the market and potential trends.
Media reports: Analyze news and media coverage of the cryptocurrency industry to understand public opinion and regulatory environment.
Trading volume: Observe the trading volume on exchanges; high trading volume may indicate market activity and changes in trends.
4. Macroeconomic factors.
Interest rates: Changes in interest rates can affect investors' risk preferences, thus impacting the cryptocurrency market.
Inflation: Inflation can lead to the depreciation of fiat currency, increasing the demand for hedging assets (such as cryptocurrencies).
Economic conditions: Economic growth or recession will affect investor confidence and risk appetite, thus impacting the cryptocurrency market.
A single tree cannot form a boat; a lone sail cannot sail far! In the cryptocurrency space, if you don't have a good circle or insider information, then I suggest you follow me, and I will help you get to shore without cost. Welcome to join the team!!!
