To this day, I have been in the crypto space for ten years. In the first three years, I lost over 700,000 with a principal of 1 million! Do you know how devastated I was? At that time, I could have bought a house that has appreciated many times! My wife almost divorced me! Later, after much reflection, I decided to start over; I was really unwilling to accept that. Starting in the fourth year, I began to rebuild with the remaining 300,000, slowly accumulating my profits and achieving stable returns each year.
After so many years in the crypto space, these ten iron rules are posted on my computer. I must review them before entering the market each day to help me avoid pitfalls during significant downturns. Today, I share them with friends who may find them insightful.
1. Never chase high prices to buy coins, always maintain this mindset: let it rise as much as it wants, treat this coin as if it doesn't exist.
2. There are only two types of coins; coins purchased at good entry points are good coins, otherwise they are trash. Coins bought at high-level entry points are the best-performing coins. Patience is required for high-level positions to become truly excellent coins; this is the true mindset.
3. Actually, the mindset for trading coins is the most important. Many people know that it's not the right entry point, yet they can't resist the urge to trade; this is a mindset issue. If this is not resolved, any theory is useless.
4. Maintain a steady mindset; do not become emotionally attached to any coin or point, only focus on market signals. You should have emotions regarding entry and exit points. If your skills are good and your funds are large, you can operate weekly or monthly, build positions in batches, and diversify your investments. At that point, timing is never an issue.
5. The reasons for mistakes are never related to the market; when seeking reasons, you can only find your own. Any mistake must be summarized immediately.
6. The urgency to make money is a taboo for us participants in trading coins. If you can't even control your own heart, and cannot manage your greed and desires, you cannot succeed in the market for the long haul. There are two forms: when you hold coins, your thinking is controlled by bulls; conversely, you are a slave to bears. The market's emotions accumulate and are guided by this. Those who cannot escape this state will always remain untrue market participants.
7. Trading coins tests long-term profitability, not just explosive gains. The key is a long-term effective trading strategy. When buying, consider various scenarios, hold firmly, and be decisive in selling; this is the only way to gradually improve. You trade coins, not the coins that trade you; start with yourself.
8. The virtual currency market will only reward those who are patient; any good coin needs to be nurtured. Constantly switching coins will always lead to small funds and minor gains. Focus on one area; those who run around daily will definitely not make big money.
9. Dance to the rhythm of the market; as long as you follow the market's rhythm, you can move gracefully on the knife's edge. Rhythm is always the market's rhythm. A market participant without a sense of rhythm is destined to suffer. Let go of your greed and fear, and listen to the market's rhythm. As long as you can act according to the rhythm, no one can hinder you. The market has a rhythm; grasp the current rhythm, and no one can defeat you.
10. For those who play with capital, remember that the power of patience is the greatest. As long as you have the right mindset and skills, patiently waiting, holding, and observing is essential; this will help you overcome everything.
There are many ways to trade coins, but not all methods can be learned. We all hope to achieve good returns with the simplest methods. Friends in the crypto space are not unable to choose good coins; rather, they overthink! Today's focus is on a simple yet very effective trading strategy—"Anticipate the future, the value and importance of contingency plans and trading plans."
I share the insights I've accumulated over more than ten years in trading coins! In trading, 'anticipate the future, the value and importance of contingency plans and trading plans.' In an uncertain market, the ability to accurately predict and respond to changes is the key to successful trading. Today, I will analyze how contingency plans and trading strategies provide traders with confidence, avoid risks, and achieve long-term stable returns in the market.
1. Anticipate the future.
A contingency plan is a strategy and decision made before trading, based on personal goals and market conditions: it is relatively flexible and can be adjusted and optimized according to market conditions. Below, I will provide detailed examples based on the market.
We need to understand what the market is doing right now. For example, in the BTC chart we see, the price is currently moving within a range. For this range, we can have three contingency plans.
Type 1: The price is supported at the bottom of the range, and one can go long.
Type 2: The price cannot break through the range or fakes a breakout at the upper boundary for short positions.
Type 3: If the price breaks this range, decide whether to go long on the breakout or on the breakout retest. This is based on the current price trend, analyzing the potential trajectories it may take. Regardless of how the market price moves in the future, you have contingencies in place; you just need to observe which of your contingency plans the price aligns with. This certainly includes your analysis of market trends and key levels, but these are not the issues we will discuss today.
Today, we only discuss the difference between contingency plans and trading plans. As mentioned above, a contingency plan is just a reserve plan, but the price may not align with your plan due to changes over time. At that point, you need to make adjustments; insufficient contingency plans need to change.
For example:
With the passage of time, the price has now broken the range, right? This meets the third contingency plan mentioned above. At this point, those who are not skilled at making breakout trades are waiting for the price to retest the upper boundary of the range, hoping for a long opportunity, and some are even starting to set trading plans now.
As the price trends, if you still hope to go long at this point, it’s not a problem; however,
This K line has fallen into this range, which is enough to indicate that the three contingency plans you had in reserve have been invalidated. At this time, you cannot treat the current market according to your original plan. You need to reanalyze the latest price trends and set new contingency plans. The price has invalidated your original contingency plans, so your thinking needs to shift; prices are dynamic, and your thinking must also be dynamic.
Summarizing the contingency plan: Analyze the market, prepare several possible future scenarios. When the price moves in any direction, you have a corresponding strategy, which is to think ahead. If the price invalidates your contingency plan, you must adjust to the current market trend and prepare new contingency plans to respond to the latest market conditions. Next, let’s discuss the importance of the trading plan.
The key level for bearish sentiment has been identified; now we just need to wait for the signal to enter. At this point, a trading plan needs to be established, for example:
1. If the next K line shows a low of 2, I will enter to short.
2. Where to set the stop loss.
3. Set take profit in the deal (is the risk-reward ratio sufficient? If yes, execute; if not, do not execute).
4. How much of the position is left (sufficient for stop loss and enough for a percentage of the position).
5. If the volatility of the entry K is too large, either place orders to enter or enter at a smaller level.
6. If the next K does not align with the trading plan, you must abandon the trade.
7. If you have entered the market and set a stop loss, should you re-enter the market for revenge?
8. Even when you reach your take-profit point, should you exit completely or leave a part of your base position, etc....
These are things that need to be thought about before trading. Once you have planned everything, when you get a signal, you just need to execute the trading plan.
As market conditions change, the entry K meets the desired low of 2.
For example, if the position is 1000U, set a stop loss of 50U (meaning if you have 1000U, you only lose 50U with each stop loss).
A risk-reward ratio of 1:2 is a very good trade.
Summarize the trading plan:
A trading plan is generally formulated before executing a trade. Once everything is planned, as long as the price meets your plan and the risk-reward ratio is sufficient, you should execute the trading plan, while ensuring long-term discipline and consistency in trading. The above illustrates the difference between contingency plans and trading plans through market analysis.
I believe that those who carefully read this article will value contingency plans and trading strategies, and consistently maintain trading discipline in the long run. I believe your trading will improve significantly in the future. If you want to learn more, follow me.
Trading techniques worth learning in the crypto space.
1. Two-way trading: suitable for bull and bear markets. Two-way trading is currently the most common trading method on the Giant Stone Wealth GGtrade platform. It can be operated based on the trends in the coin market; one can buy up or down. Moreover, as the year-end approaches, the Giant Stone Wealth GGtrade platform has launched a series of discounts and benefits, such as a 20% increase in investment returns, which is a great boon for investors.
2. Coin hoarding method: suitable for bull and bear markets. The hoarding method is the simplest yet the most difficult way to play. It is simple because it involves buying a specific coin or several coins and holding them for over six months or a year without trading. Generally, the minimum return is ten times. However, beginners find it easy to see high returns or encounter a price drop and decide to switch vehicles or exit. Many people find it challenging to hold for even a month, let alone a year. Therefore, this is also the most challenging aspect.
3. Buying the dip method suitable only for bull markets. Use a portion of spare cash, preferably not more than one-fifth of your funds. This method is suitable for coins with a market cap between 20-100, as they won't be tied up for too long. For example, if you buy the first altcoin and it rises by 50% or more, you can switch to the next coin that drops sharply, and so on. If your first altcoin gets stuck, just wait; in a bull market, it will definitely break even. However, the coin must not be too risky; this method is also difficult to control, so newcomers need to be cautious.
4. Sandglass vehicle replacement method: suitable for bull markets. In a bull market, almost any coin will rise. Funds act like a giant sandglass, slowly permeating into each coin, starting with large coins. Coin prices rise in a clear pattern: leading coins like BTC, ETH, DASH, and ETC rise first, followed by mainstream coins like LTC, XMR, EOS, NEO, QTUM, etc. Then, coins that haven't risen, like RDN, XRP, ZEC, etc., will experience a general rise, followed by various small coins taking turns to rise. However, if Bitcoin rises, you should choose the next level of coins that haven't risen yet and start building positions.
5. Pyramid bottom-buying method: suitable for predicting major crashes. Bottom-buying method: place orders to buy one-tenth of the position at 80% of the coin price, one-fifth at 70%, one-third at 60%, and one-fourth at 50%.
6. Moving average method: Understand some basics of K lines. Set indicator parameters to MA5, MA10, MA20, MA30, MA60, and select a daily line level. If the current price is above MA5 and MA10, hold steady. If MA5 drops below MA10, sell the coin; if MA5 rises above MA10, buy and build positions.
7. Violent hoarding method: Only for coins you are familiar with, suitable for long-term quality coins. Have a pool of liquid funds; if a coin is currently priced at $8, place an order to buy at $7. When the buy order is executed, place a sell order at $8.8. Use the profit to hoard coins. Withdraw the liquid funds and continue waiting for the next opportunity. Dynamically adjust based on the current price. If there are three such opportunities in a month, you can hoard a significant amount of coins. The formula is: entry price equals current price times 90%, and sell price equals current price times 110%!
8. A violent compound interest method: continuously participate in ICOs. When a new coin rises by 3-5 times, withdraw the principal, and reinvest in the next ICO while keeping the profits. This cycle continues.
There is a saying I strongly agree with: the boundary of knowledge determines the boundary of wealth; one can only earn wealth within their knowledge boundary. The mindset for trading coins must be good; do not let blood pressure rise during a market crash, nor become overly ecstatic during a surge. Taking profits is of utmost importance.
Still the same saying: if you don't know what to do in a bull market, click on Kuige's avatar, follow for bull market spot planning and contract secrets, shared for free.
