Practical strategies and key points for short-term trading in the cryptocurrency market
1. Make good use of moving averages: 5-day moving average strategy
Core: The 5-day moving average (MA5) is one of the key tools for short-term and swing trading, widely regarded as a simple and practical short-term strategy.
Real-world challenge: Although methods are effective, most ordinary investors lacking insider information still find it easy to lose money in short-term trading. The crypto market seems full of 'get-rich-quick' opportunities, but in reality, it is fraught with traps.
Strategy suggestion: Short-term focus can try new coins (with caution), while mid-to-long-term investment and dollar-cost averaging strategies are more suitable for mainstream cryptocurrencies.
2. Capture bottom reversals: 'Lotus Rising from Water' pattern
Operation key points: Pay attention to coins that have experienced long periods of sideways consolidation at the bottom. When their price suddenly breaks above the 60-day moving average (MA60), it often sends a strong buy signal.
Key factor: The duration of sideways consolidation at the bottom is an important reference for the effectiveness of this pattern.
3. Precautions for bottom-fishing broken tokens to bet on rebounds
Method overview: Bottom-fishing tokens that fall below their issuance price (broken tokens) to bet on rebounds is one of the short-term strategies.
Key selection: Focus on selecting new coins that have good fundamentals, are supported by hot concepts, and have strong technical teams behind them. Avoid blindly bottom-fishing.
4. Short-term cycle selection: Use of 15-minute candlestick charts
Ultra-short-term (intraday or several days): Use 15-minute candlestick charts as the main analysis period. Also observe the 5-minute chart (for precise points) and the 60-minute chart (to judge short-term trend direction).
Short-term (several weeks): Reference daily, weekly (to grasp the overall direction), and 60-minute charts (to assist in decision-making), with positions primarily based on daily-level data.
5. Timing for short-term coin selection and ultra-short-term methods
Stock selection timing: During the stabilization phase at the end of the market downtrend, it is a crucial time to actively select short-term potential coins and prepare for subsequent market trends.
Key points for ultra-short-term trading:
1. Prioritize coins whose prices have stabilized and strengthened first.
2. Focus on coins in the bottom area with sustained volume increases and obvious capital involvement.
6. Risks and changes of project crowdfunding (ICO/IEO)
Past appeal: Project crowdfunding once created a huge wealth effect (returns of dozens or even hundreds of times).
Current situation challenge: The number of crowdfunding projects has surged, with quality varying significantly, increasing risks and sharply reducing profit opportunities.
7. Be wary of FOMO (fear of missing out) mentality
Typical performances:
1. Hearing that a certain coin is about to skyrocket (e.g., 10 times), fantasizing about getting rich quickly.
2. Expect short-term violent gains and rush to buy.
3. Driven by the fantasy of getting rich, invest funds beyond one's capacity.
Harm: This mentality can easily lead to irrational decisions and significant losses.
8. Short-term trading mentality and discipline
Core principles:
1. Control risk and avoid excessive trading.
2. Maintain a calm mindset and manage stress.
3. Reduce excessive reliance on others' analysis. Market predictions carry uncertainties, and one should establish their own judgment system.
4. Strictly execute the original intention of 'short-term trading' to avoid turning short trades into long ones due to procrastination or a gamble mentality.
5. Be aware of the negative impact of trading on mental and physical health.
6. Remember the 'quick in, quick out' principle; upon reaching target profits (e.g., 2%), decisively exit.
7. Focus on coins that are in a launching pattern and have upward momentum. Be wary of signals that hinder price increases, such as 'high volume without price increase' or 'heavy float'.
9. Brief overview of Bitcoin ATM transactions
Characteristics: Operations are simple and quick, usually requiring no account registration, and transactions are anonymous.
Process: Buyers invest cash and complete purchases by scanning their personal Bitcoin wallet QR code through an ATM. Some ATMs also offer a printing function for private keys, allowing buyers to import them into their wallets.
Positioning: This is one of the most convenient ways to purchase Bitcoin.