It's easier to lose money in the crypto world; this is a lesson I learned with real money. Four years ago, I was a 'technical expert' who stayed up late watching the market, studying various indicators like K-line, MACD, and RSI, yet I ended up breaking even and even faced liquidation a few times. Until I met an experienced investor, who told me: trading coins should be as simple as possible.
In my opinion, the key to trading coins lies in maintaining a good mindset; technical mastery is secondary. This calmness and composure may be the secret to my success in the crypto world.
Working in the crypto world: high-win-rate structure 'bottom formation'.
The bottom formation usually appears at the end of a downtrend, consisting of 3 to 4 candlesticks.
One of the classic combinations that is easiest for novice friends to learn and recognize.
The larger the volume of the third bullish candle, the higher the degree of engulfing, making it more reliable.
When paired with a bottom doji, it is truly perfect!
1. Technical characteristics of bottom formation.
1. It appears in a downtrend.
2. Composed of three candlesticks, the first is a bearish candle, the second is a small bearish candle, small bullish candle, or doji, and the third is a bullish candle.
3. The entity of the third bullish candle should be large and almost completely recover or engulf the entity of the first bearish candle.
2. Technical implications of the bottom formation.
The bottom formation is a common high-win-rate bottom reversal signal. This pattern indicates that after a significant decline, the selling pressure is almost exhausted, and the price is unable to drop further. The right-side bullish candle signifies that the bulls are starting to counterattack, visually reflecting the comparison of bullish and bearish forces, so the probability of structural reversal is high, and the outlook is bullish!
The bottom formation perfectly reflects the short-term trend reversal in Dow Theory.
The first bearish candle's low is lower than the previous low.
The second candlestick indicates the price has stopped falling and is consolidating.
The third bullish candle's high is higher than the previous high.
3. Practical logic.
The first bearish candle is like a car on the road; the drop of the bearish candle is akin to speed, and trading volume is like power. The smaller the drop, the slower the speed; the smaller the volume, the weaker the downward momentum.
The second candlestick shows the entire process of a car suddenly braking, stopping, and making a U-turn.
The third candlestick is a bullish candle, similar to the first bearish candle; the rise and volume of the bullish candle represent speed and power. The greater the increase, the faster the speed; the larger the volume, the stronger the bullish momentum.
Feedback in the trend shows that when the price of a coin drops to a certain extent, the bears become weak and unable to drop further, giving the bulls a chance to counterattack and reverse the trend. Thus, traders can buy after the bottom formation appears!
Special reminder:
When the bottom formation and ascending flag shape appear simultaneously, the probability of a subsequent rise is very high, and it is an important signal for identifying the end of the flag pattern. Strike while the iron is hot; tomorrow we will discuss the ascending flag shape!
Directly discussing trading secrets (collecting).
Six do not enter, four do not release:
Six do not enter:
1. If a coin has been continuously dropping and has not stabilized at the 60-day moving average, let's not touch it for now. Follow the trend; for a coin that has been continuously dropping, let’s wait and see when it turns around.
2. Do not buy coins that rise after good news comes out. When good news arrives, it's often a signal to sell; if a coin has already risen and then good news comes, the big players may want to cash out.
3. If a coin rises too sharply and is far from the 5-day moving average, do not chase it. Coins that rise too quickly are also risky; chasing high prices can easily lead to being trapped.
4. Don't take risks with coins that suddenly spike at high prices. High price gaps carry significant risks; it may be the main force quietly offloading.
5. Avoid coins with a turnover rate exceeding 30% for now. A high turnover rate indicates intense competition between bulls and bears; it’s best to stay away from such volatile conditions.
6. Don't fall for coins that are still holding on in a bad environment. If the market is not doing well and the coin is still being pushed, it's likely a 'smoke and mirrors' situation.
Four do not release:
1. For coins with RSI between 50 and 80, continue to hold. An RSI in the middle-high range indicates that the coin still has strength; holding on can earn you more.
2. For coins that jump up from low positions, don’t rush to sell. A gap up indicates strong bullish momentum; see if it can continue rising.
3. For coins trending upwards, hold tight. Following the trend, the longer you hold a coin in an uptrend, the more you can earn.
4. For coins where all chips are concentrated in one place, do not sell easily. When chips are piled up, the main force may still want to push the price higher; waiting for a peak to sell is not a bad idea.
Insights on trading coins: trading coins must follow the rules; you can't rely on feelings.
Understanding trends is much more reliable than guessing!
Three major angles, ninety-nine key insights! Secrets of trading coins that big players won't tell you.
In the crypto world, one day is equivalent to one year in the real world; this statement is not an exaggeration. Many people want to ride this fast train, but risk and reward coexist.
On sunny days, I often receive messages in the backend asking what to do if a coin drops today? Should I sell a coin tomorrow? I sense a panic and confusion in facing the unpredictable crypto world.
Today, I am sharing practical tips from three angles: news, technology, and mindset, which are very suitable for beginners who feel lost in the crypto world.
1. News section.
1. You must find ways to collect first-hand information to win; analyzing major consulting media in the circle is particularly important.
2. Most media are agents for large investors and also serve as consultants for novice investors.
3. Understanding the characteristics of different industries is the key to making profits.
4. Sometimes buying against expert opinions is a unique speculative approach!
5. Before making an investment, you should prepare well and familiarize yourself with financial knowledge, domestic and international financial paths, and political dynamics. Detailed analysis of the team and practical applications is key.
6. Buy or sell when news breaks, and sell or buy when news is confirmed.
7. You must research and judge the market by yourself; do not change your decision based on unverified rumors.
8. Teams with problems will produce problematic products; it's best to act cautiously.
9. Any direct investment is a professional investment, and professional investments require a foundation of professional knowledge.
10. Anyone who claims to predict accurately is most likely a loser.
11. If the news is inaccurate, you will lose; the most futile action is to try to guess the psychology of big players and traders.
12. When purchasing, understand whether the profit potential of the issuer is reasonable relative to the current market situation.
13. This circle is small, but that doesn't mean there are no circles; knowing a few big players can be very helpful.
14. Do not let sudden news change your original intention to buy or sell.
15. Good news running out is bad news, and bad news running out is good news.
16. Institutions operate with secret codes; for example, an order of '232323' may indicate they are selling. Each institution is different, and it's necessary to study them.
17. Don't join small secret circles; if you do, you'll only bring your ears and brain.
18. If the white paper does not contain specific content and a research and development team, the probability of it being a scam coin is over 80%.
19. Whether a project is open source or not is important; generally, open-source projects are uploaded to GitHub. If not, everyone should be cautious.
2. Technical section.
20. Choosing the right coin leads to half of the success.
21. The tactics of big players are often unexpected, deceiving naive investors to facilitate their own buying and selling. You must accurately analyze the trading volume patterns.
22. The timing of buying is the most important link in cryptocurrency investment.
23. If the retracement exceeds one-third, it’s time to sound the alarm.
24. The three steps of rising: bottoming out—breaking through—soaring!
25. If the index updates for three consecutive days, but trading volume decreases each day, the future may not be optimistic.
26. Long-term leading uptrends will inevitably be followed by significant declines; a drop exceeding 50% has a high probability of a subsequent 30% rebound.
27. Small investors being trapped by large investors is a common occurrence, so diversified investment is crucial.
28. The rise and fall of indices are not random; they are much simpler than the patterns of lotteries. Appropriate screenshots and analysis are key!
29. Anything that leads the rise will also lead the fall.
30. Avoid excessive switching in buying and selling; do not act impulsively when uncertain, and respond to changes with stability.
31. A significant increase in trading volume without price movement is a signal of nearing the peak; at this time, 'it’s better to walk away'.
32. The longer a coin hovers at a low level, the greater the potential upward movement; a 30% increase has a probability of over 70%.
33. To judge growth or decline, look at the gap with the trends of the times; policy is the biggest risk, and it is still necessary.
34. Trading volume is like a pulse; it can indicate whether there is a problem.
35. Choosing which coin to buy is not as important as choosing a good timing to sell; knowing when to sell is a hundred times stronger than knowing when to buy.
36. Do not put all your financial resources into one coin.
37. Avoid thinking that a low price means a large potential; speculation can lead to difficulties once a reversal occurs, and the drop can be significant.
38. Buying coins with slightly lower profit potential at a lower price may be more cost-effective than purchasing those with slightly better profit capabilities.
39. Without considerable experience, never engage in margin trading; getting burned is a common occurrence.
40. Determining long-term investment goals and principles is the primary issue.
41. Market fluctuations have traceable patterns; if you master this pattern, you can win every battle.
42. A shrinking increase and declining trading volume are clear signs of approaching a peak.
43. Experience shows that the time the market spends experiencing technical factors is generally much shorter, about one-third of that for fundamental factors.
44. Preventing being trapped at high prices is the most important lesson for novice investors, so it's crucial to practice at lower levels.
45. If it should rise but does not, it's right to be pessimistic; if it should fall but does not, it's right to be optimistic.
46. Fundamental analysis can tell you which coins have inherent beauty, while technical analysis indicates the best timing to exploit them.
47. Funds in the market always flow in the most advantageous direction.
48. Low-priced coins tend to have larger fluctuations than high-priced ones.
49. Buy when you can, sell when you should, stop when you need to; safety first, stability above all; rashness leads to loss, greed leads to poverty.
50. Short-term fluctuations in the market have no significant relation to long-term performance.
51. You must understand the 'Sunday Theory'; many coins rise on this day.
52. Robots are still worth buying since they react faster than the human brain.
53. The same coin can have different price fluctuations and band movements on different exchanges, so choosing a good exchange is very necessary.
54. New cryptocurrencies are often the best short-term choices.
55. It's best to configure a combination of major coins and altcoins.
56. Major coins are relatively stable with fewer pitfalls, while altcoins are volatile, offering more opportunities.
57. During rapid upward spikes, try not to operate.
58. It’s best not to go all in; half a position or leaving 1/3 of your chips can allow for averaging down.
59. You need to understand the operational situation of the team or foundation; if necessary, discuss it with someone you consider less knowledgeable to hear their opinions.
60. Do not buy too many popular coins, as popularity often leads to fast rises and fast falls.
61. Do not put all your investment in one coin; try to diversify.
62. Trading volume can show changes in conditions; when trading volume begins to increase, it should be noted whether to sell or buy.
63. Everything you hold will eventually need to be sold; not selling is foolishness.
64. The highest or lowest prices during market fluctuations often become the peak or bottom prices; passing this threshold can lead to either a rocket or a waterfall.
65. Following the trend means filling up your wallet.
66. It's best to choose those with good prospects but low popularity, as they are easier to profit from.
67. Experts usually formulate a plan with each step clearly outlined, and then strictly follow the requirements.
68. The basic tactics of institutions: building positions, testing the market, lifting prices, washing out, and offloading in five stages.
69. A sudden surge in volume generally has two possibilities: one is the big player protecting the market, the other is institutions buying in; at this time, you should go with the trend.
70. After each step up, there is usually a washout; getting off here may mean you can't catch the next bus.
71. Getting rich from 10 yuan in the crypto world is not impossible; luck is also key.
72. When faced with a major pullback, it's an opportunity to buy a little.
73. Do not overestimate the intelligence of the big players; many operations are just showing their limitations.
74. Before making small profits, gradually build up; do not play with large sums.
75. Chasing high prices to buy coins is risky; beginners should treat that coin as if it doesn't exist.
76. Beginners must not chase after rising prices; it’s better to miss the opportunity than to rush in.
77. Be cautious when participating in coins that are traded only on one small exchange.
78. If joining is free at the beginning but various fees are required later, it’s a basic indicator of a pyramid scheme, and it’s advisable not to join.
79. If a coin has not yet been listed and has already multiplied many times during the fundraising period, it is advisable not to participate.
80. Making money from arbitrage is a relatively low-risk job with easy earnings.
3. Mindset section.
81. Small profits often delay major trends; do not be misled by small fluctuations.
82. The most trustworthy thing at any time is yourself; it's crucial to follow your own path.
83. When in doubt, stop acting; this indicates that the market is still unclear.
84. Being a step ahead may secure victory.
85. There are no coins that only rise without dropping, nor are there coins that only drop without rising. Opportunities always exist; your mental price is key, and there's no point in regretting.
86. Build a strong body to ensure your heart can withstand the impacts of big ups and downs.
87. Buying leads to being trapped, selling leads to rising prices; the secret lies in the relationship with the traders, as they constantly study the psychology and behavior of novice investors.
88. Trading coins is trading numbers; never establish a relationship with money. If you do, you will undoubtedly lose.
89. Market changes are extremely fast; changes in bullish sentiment within 10 minutes are normal, so maintaining a balanced mindset is essential.
90. If you can't withstand fear, you won't get big; courage, courage, still courage.
91. Patiently waiting for a major position-building coin to become a truly high-performing stock is the real mindset.
92. The mentality of rushing to make money is a major taboo for cryptocurrency traders.
93. Remember that the power of compound interest is the greatest.
94. The definition of a novice investor is someone who chases rising prices and sells at a loss, believing in rumors, and has a restless mindset.
95. Listen less to tips and think more.
96. Avoid estimating market conditions based on your financial capacity; do not let profits and losses affect your decisions; in this industry, what you hold is minimal.
97. You might do great in business, but it doesn't necessarily relate to the crypto world.
98. Experience can cultivate inspiration, but inspiration should not be entirely reliant on experience.
99. There’s no free lunch; set a loss limit that you can handle.
Learn to release the burden on your heart; do not be overly ecstatic about profits or overly depressed about losses. Actively put down your phone and computer to reduce excessive attention to market conditions, and face each trading challenge with a calm and determined heart.