Recently, many people have asked me how to effectively trade short-term. I won't hold back, and I'll directly share my six hard-earned rules.
It's not an exaggeration, each one could save your life, especially if you're currently confused during a sideways market, wanting to jump into everything — you really need to pay attention!
First rule: The consolidation period is the most dangerous!
Especially when the market is moving sideways at a high level, don't be foolish; the market makers are just waiting for you to FOMO in so they can trap you. If it's a continuous fluctuation at a low level? Be even more cautious, as a sharp drop can happen the moment you think, "It can't drop any further."
Second rule: The sideways market is truly a liquidation camp!
Don’t believe it? Go check the historical charts; how many people have lost their capital in those seemingly "no volatility" situations, wave after wave.
Third rule: When others run from a bearish candle, I smile at it!
Buying on bearish candles and selling on bullish ones is the way to go. When a big bearish candle appears, it’s when panic reaches its peak, and I love to jump in and buy at the bottom during those times, going against human nature.
Fourth rule: The faster the drop, the stronger the rebound!
Never be afraid of those trends where "10% is gone in the blink of an eye"; that’s when money is being given away. What you should really fear is the slow decline, like a frog being boiled in water — it will destroy your faith.
Fifth rule: Truly smart people don't just throw all their funds in at once!
They use a pyramid method to build their positions, layer by layer. What you think is a small retail position may actually have a cost lower than yours.
Sixth rule: A change in the market always signals something!
Whether it’s a consolidation after a sharp rise or a consolidation after a sharp drop, remember this: prolonged sideways must lead to a drop/ prolonged sideways must lead to a rise. After a rise, don’t be greedy, withdraw your capital. After a drop, don’t cling to it, cut your losses quickly!
Seventh rule: If the rebound doesn’t break the previous high, immediately take profits and exit!
A truly strong coin will at least break the previous high during a rebound; if the rebound can’t even reach the previous high, don’t fantasize about “will the next wave pull up.” Remember: weak rebounds are the market makers’ reduction points, strong rebounds are your signals to add to your position.
These words may not sound pleasant, but each one is practical advice.
If you don’t want to gamble on the future relying on luck, start by following this set of guidelines.