Introduction: Don’t be confused by complex indicators; the truly profitable tools are simple enough that you can’t believe it
When I first entered the crypto market, I was overwhelmed by the screen full of K-lines and indicators: MACD, RSI, Bollinger Bands... the more I learned, the more confused I became, and I ended up losing all my savings in 3 years. It wasn’t until the fourth year that I accidentally discovered a 'contrary to common sense' truth: the most profitable tools in the crypto market are often the simplest.
Now I can buy an 1800 sq ft villa in Shenzhen, not based on any profound theories, but on 4 'foolproof indicators' and practical skills that anyone can learn. Today, I’ll break it down in detail, so that even if you are a complete novice, you can use it immediately - these methods have helped me avoid 3 liquidations and catch 5 waves of doubling markets.
First, the SAR indicator: A 'life-saving charm' for beginners, with buy and sell points simple enough to 'not require thinking'. Many people think the more complex the indicator, the more powerful it is; in fact, the SAR indicator is the 'hidden master' among the masses. It looks like this: individual dots follow the price; if the price is above the dots, it’s a rise, if below, it’s a fall, simple enough to learn in 5 minutes.
Using SAR to determine 'bullish or bearish' is 10 times more reliable than MACD
If the price is above the SAR points (the dots are below the K-line), it’s a 'bull market', don’t rush to sell; even if there is a pullback, as long as it doesn’t break the SAR points, continue to hold. In 2021, Ethereum rose from 2000 to 4000, and the SAR points stayed below; I made an additional 1 million by following the 'don’t sell unless it breaks'.
If the price breaks below the SAR points (the dots move above the K-line), it’s a 'bear market', and you must sell. Last year, when Bitcoin dropped from 69,000 to 30,000, the SAR points had 'flipped above' at 50,000, and I decisively liquidated, avoiding the subsequent halving.
Remember these 2 'angle' signals to avoid 80% of the pitfalls
When the SAR points angle upwards greater than 45 degrees, it indicates a strong rise; don’t rush to sell (for example, SOL rising from 20 to 100 in 2023, SAR points almost vertical upwards, selling at this point would mean losing money);
When the SAR points angle downwards greater than 45 degrees, it indicates a strong decline; do not try to catch the bottom (for example, during the 2022 LUNA crash, the SAR points approached 90 degrees; those who tried to catch the bottom all got liquidated).
Key reminder: The SAR will fail in 'volatile markets' (the points keep changing); at this time, do not trade, wait until the trend is clear before acting - its strength lies in 'capturing trends', not 'guessing volatility'. Second, Support and Resistance Levels: Understand these two points, and you can earn 30% more profit. Many people buy coins without knowing where to sell, and sell without knowing where to buy; actually, it’s just about 'two points': support level (a place where the price cannot fall) and resistance level (a place where the price cannot rise).
When a support level is broken, it becomes a resistance level; when a resistance level is broken, it becomes a support level.
For example, if a coin can’t rise above 6800 (after 3 failed attempts), that’s the 'resistance level'; later, if it breaks down through 6000 (the support level) with huge volume, that 6000 becomes the new resistance level - when it tries to rise back to 6000, it will encounter many trapped sellers, making it hard to pass.When I traded FIL last year, I relied on this rule: it had 3 support points at 40 USD (bouncing back each time it reached that level), I bought every time at 40 USD, and sold at 50 USD (the resistance level), making a total of 60% profit over 3 trades.
To judge 'true or false breakouts', just look at the 'trading volume'
When a resistance level is broken, the trading volume must expand (more than 2 times the usual) for it to be a 'true breakout'; if there is no expansion, it’s a 'false breakout', sell quickly. For example, when BTC broke through 40,000 this year, the trading volume was 3 times the usual, and I decisively increased my position, which later rose to over 50,000, earning an additional 200,000.
Third, Bollinger Bands: The artifact for 'guessing direction' in sideways markets, must be checked before a trend change
Sideways markets are the most frustrating: buying does not rise, selling does rise. But the Bollinger Bands can help you 'sniff out' big trends in advance - they are like an 'elastic band'; when they narrow, prepare for a trend change, and when they open, the trend has arrived.
When the Bollinger Bands narrow to 'almost stick together', a big move is imminent
When the price of the coin is moving sideways and the upper, middle, and lower bands of the Bollinger Bands are squeezed into a single line, it indicates that both bulls and bears are 'tired of fighting', and a result will be determined soon. At this moment, do not use leverage, and do not trade short-term (you won’t even recover the transaction fees); wait for it to break out upwards or downwards before acting - the greater the amplitude at the breakout, the stronger the subsequent market (for example, Bitcoin was sideways for 1 month in 2023, and after the Bollinger Bands narrowed, it surged by 30%).When the opening expands, determine buy and sell based on position
After the opening expands at high levels and begins to contract, it is a 'sell signal' (for example, if the price has risen 3 times, the Bollinger Bands open to the maximum and then suddenly contract, it is highly likely to fall);
When the opening expands at low levels, and the price is moving upwards from the middle band, it is a 'buy signal' (for example, if the price has fallen 50%, and after the Bollinger Bands narrowed, it suddenly expands, with the middle band turning upwards, buying at this time has a high success rate).
Reminder: The Bollinger Bands have strong lagging characteristics (they only move when the price moves); do not use them to guess 'reversals', only use them to judge 'whether the trend will continue'. Fourth, Volume: Trading volume is the 'real signal'; everything else is 'false signals'. Many people look at K-line rises and falls while ignoring 'trading volume' (the red and green bars below). In fact, 90% of the 'sharp rises and falls' in the crypto market are dictated by 'volume' - rises and falls without volume are just the big players 'playing by themselves'.
Remember these 4 phrases, which are worth more than 100 indicators
High volume at high levels must fall: If the price has risen significantly (for example, it has increased 5 times), and suddenly the trading volume expands (the bars are 3 times higher than usual), no matter how good the K-line looks, sell quickly (the big players are offloading);
Low volume at low levels can be bought: If the price has fallen significantly (for example, it has fallen 70%), and the trading volume suddenly expands, and does not make new lows, this is 'capital entering the market', you can buy in batches (when Bitcoin fell to 15,000 in 2022, the volume increased, and I bought more when it fell).
No volume rise is a 'false signal': If the price has risen but the trading volume has not expanded (the bars remain short), it is highly likely that the big players are 'pumping and dumping', rising fast but falling faster, do not chase;
Be cautious of volume-price divergence: If the price reaches a new high, but the trading volume is smaller than the previous peak (the bars become shorter), it indicates that 'buying pressure is not keeping up', it’s time to sell (for example, when Bitcoin rose to 69,000 in 2021, the volume was smaller than the previous high, I liquidated my position and avoided the crash).
Fifth, finally, I present you with a 'foolproof trading method' that beginners can follow
Connecting the above tools forms a trading process that is simple enough to 'not require thinking':
Use the SAR indicator to set direction: If the price is above the SAR, only go long; if below, only go short;
Use support/resistance levels to find points: Close to support + SAR below, buy; close to resistance + SAR above, sell;
Use Bollinger Bands to time entries: When trading sideways and the Bollinger Bands narrow, wait for a breakout; during a trend, when the Bollinger Bands open, trade in that direction;
Use volume to verify authenticity: Check the trading volume before buying; if there is no volume increase, give up; if there is volume, then act.
I used this method to trade SOL 4 times last year, earning 15%-30% each time, doubling my investment - complex indicators will only make you hesitate; simple rules will make you decisive. Conclusion: The core of making money in the crypto market is 'simplicity + execution'. From being liquidated to buying a villa, my greatest realization is: the crypto market is not short of opportunities, it lacks 'actionable methods'. SAR, support and resistance, Bollinger Bands, volume... these tools may seem simple, but they can help you avoid most pitfalls.#稳定币监管风暴 #Strategy增持比特币
