The painfully realistic data is that it's a thousand to one.
To friends who see my article, whether you believe it or not, it doesn't really matter to me.
I am just speaking the truth. If my words make you uncomfortable, I really can't help it. I'm not a scammer; if I were a scammer trying to earn your little capital, I would also want to say what you like to hear, but I can't do that.
Because for every friend who reads my article, I ask for nothing; this is my original intention and my starting point.
You can understand me at this moment, I thank you. If you can't understand me due to insufficient experience, I am also very calm; it's that simple.
The crypto circle is a global financial market where only the law of the jungle can survive. If you can't make money or get results, don't blame anyone or any institution.
Even if they have scammed you or let you down, or even if they deceived you under the guise of blockchain.
You must thank them, for they have helped you grow, given you experiences, and provided you with the motivation to change yourself!
Even if they are scammers, or if you are currently deceived and have hit rock bottom in life, you must thank them for letting you experience life's pains, which allows you to grow.
Because in financial markets, complaints do not solve any practical problems you face. If you fail in contracts or investments and cannot pay off your credit card, or your online loans, or if you borrowed from family and friends and it doesn't need to be repaid?
Wake up, I have experienced what you can experience, and even more.
When you seek external help, you have already lost. Losing is not scary; if you have the courage to face failure and make a profound change, then I believe a better future is possible.
Unless you are rotten to the core and unwilling to improve, even divine help cannot assist you.
Just like in real life, everyone hopes to have benefactors when in difficulty, but have you considered this even a little?
Benefactors can help you and help others; there are many options for benefactors, so why should they help you?
And we, who are in a difficult situation, have no options.
This is the reality; don't blame anyone. To succeed, start changing your own flaws and shortcomings bit by bit.
When your mindset improves, your behavior changes, and benefactors will naturally appear.
1. Main Uptrend Originating from wave theory, it refers to the longest wave during a market rise. This is also a common market condition in a bull market; if you catch the main uptrend, you will make a fortune. The opposite market trend is sometimes called the 'main downtrend.'
2. Gradual Decline The overall market trend shows a downward trajectory, but the price often rises for two days and falls for one day, continuously giving hope and then disappointment. In summary, the price is slowly declining.
3. Explosive Growth The market has been under long-term pressure due to negative factors, and during this time, the market tends to be very suppressed. When the negative factors are exhausted or removed, the market will show explosive growth.
4. Shakeout Large funds like market makers or project parties manipulate the market through capital to create rising and falling trends, scaring out hesitant retail investors to achieve exorbitant profits.
5. Accumulation Generally involves washing out retail investors through a shakeout, after which the market makers will take over the coins sold by retail investors, allowing them to hold more chips to achieve control (accumulation often occurs at low prices).
6. Market Control Very simple, I have a lot of money (the proportion of my coins to the circulating supply is large), and I can manipulate the market with a few moves to make it rise or fall. The goal is straightforward: to make more money and trap more retail investors.
7. Fake Signals Market makers use candlesticks to create rising or falling trends, prompting us to buy or sell, achieving their goal of profiting from retail investors. However, short-term candlesticks can be manipulated, while long-term trends are hard to fake, especially with mainstream digital currencies.
8. Consolidation Market fluctuations are small, and price movements are all within a certain range. Also known as 'consolidation.'
9. Rebound When the price of a coin is falling, it receives support from technical factors or capital intervention, and the market changes from falling to rising.
10. Pullback When the price of a coin rises and then falls back, as long as it does not break the rising trend, pullbacks generally correspond to buying opportunities.
11. Waterfall Refers to a sudden large drop in prices, with several large candlesticks appearing dramatically in front of the audience, like a waterfall flowing down.
12. Position The ratio of your account funds to the funds used to buy coins.
13. Full Position All account funds are bought as coins; commonly referred to as 'full position' or 'all in.'
14. Averaging Down For example, you hold a certain coin, and if that coin falls, you buy some more to lower your holding cost.
15. Adding to a Position You hold a certain coin and are optimistic about its development, then you buy more of that coin during its price rise.
16. Building a Position Also known as opening a position, refers to using account funds to buy a certain amount of coins.
17. Reducing Position Anticipating risks in the future, sell a portion of the coins held.
18. Locking Position Those who use futures leverage should know this. It's simple; if you are trading EOS futures with a long position of 10,000, and then open a short position of 10,000. Some might say that's insane, but it's actually not. Think about it carefully.
19. Cash Position Not trading anymore, just watching. In the crypto circle, this can mean that the account only has USDT and no other coins.
20. Reversal When the price of a coin falls to the bottom, it changes from a downtrend to an uptrend. Commonly seen as a 'V-shaped reversal.' A rebound is the foundation for a reversal, and the magnitude of a reversal is far greater than that of a rebound.
21. Light Position The funds used to buy coins account for a very small proportion of the total funds.
22. Heavy Position The funds used to buy coins account for a large proportion of the total funds.
23. Half Position The funds used to buy coins account for half of the total funds.
24. Liquidation Selling all coins and preparing to watch from the sidelines.
25. Arbitrage Depositing cash into a lower-priced A platform, then buying Bitcoin; afterwards withdrawing Bitcoin from A platform, and immediately depositing it into a higher-priced B platform; once the deposited Bitcoin arrives at B platform, sell it immediately, cash out the received funds, and repeat the steps.
26. Over-the-Counter Trading Many platforms also refer to it as fiat currency trading. Take Huobi as an example; the platform cannot recharge RMB, which is inconvenient. However, the platform offers fiat currency trading, which is very convenient. The platform guarantees that merchants or individuals can directly trade using RMB to buy or sell mainstream coins or USDT. The trading is similar to Alipay.
27. Cutting Losses Politely called 'reducing position.' This is something many of you frequently do, selling even when the price drops, fearing it will drop further.
28. Profit and Loss Ratio The ratio of profit to loss.
29. Perpetual Contracts From a trading perspective, they are similar to traditional futures contracts but have some differences. The main form of perpetual contracts currently is rolling contracts (Rolling Spot Futures). Rolling contracts are futures contracts that settle on the same day and automatically roll over, with profits and losses settled daily, and the contract positions held by traders will automatically roll over at the end of the trading day.
30. Coin-Margined Contracts Coin-margined contracts are a new trading method. Traditional trading methods only apply to the corresponding coin, but coin-margined contracts are different. They support various currencies as margin for trading multiple coin pairs. For example, users can use ETH as margin and trade BTC/USDT, ETH/USDT, EOS/USDT, with profits and losses calculated in ETH. Through coin-margined contracts, users can have more trading options, effectively improving capital utilization efficiency, increasing trading profits, and trading prices.
Technical Analysis (TA): Unraveling the codes of price trends.
(1) The Essence and Historical Origins of Technical Analysis
Technical Analysis (TA), often referred to as chart indicators, is a method of predicting future market trends based on historical price behavior and trading volume data.
Its origins can be traced back to the 17th century in Amsterdam and the 18th century in Japan, but modern technical analysis is typically marked by the works of Charles Dow.
Charles Dow, as a financial journalist and founder of The Wall Street Journal, keenly observed the cyclical trends between personal assets and the market, which laid the foundation for the development of technical analysis, giving rise to Dow Theory and promoting the continuous evolution of technical analysis.
In the early days, technical analysis relied on manually creating charts and calculations. With technological advancements and the popularity of modern computers, it has now become an indispensable tool for many investors and traders, especially playing a crucial role in digital currency trading in the cryptocurrency market.
(2) The Core Principles and Assumptions of Technical Analysis
The core of technical analysis lies in analyzing the supply and demand market forces reflected by overall market sentiment.
It assumes that asset prices do not fluctuate randomly without pattern, but show recognizable trends over time.
Asset prices are like a game of power between buyers and sellers, and these powers are closely linked to the emotions of traders and investors, with fear and greed intertwined in the fluctuations of prices.
It should be noted that technical analysis is more reliable and effective in a market environment with sufficient trading volume and good liquidity. Because in such a market, prices are less likely to be manipulated and disturbed by external anomalies, thus reflecting the market supply and demand relationship more accurately.
Conversely, if market trading volume is sluggish and liquidity is insufficient, technical analysis may produce false signals due to abnormal price fluctuations, leading to analysis failure. Chart with supplementary data.
(3) Analysis of Common Technical Analysis Indicators
Moving Average (MA) is a key tool in financial charts used to smooth price fluctuations and highlight market trends, based on past price data, and therefore belongs to lagging indicators.
The simple moving average (SMA) is plotted by calculating the average price data over a specified period, for example, the 10-day SMA is a visual representation of the average price over the past 10 days.
The Exponential Moving Average (EMA) gives more weight to recent price data, making it more responsive to recent price behavior.
Traders often use the relative position of prices to specific moving averages to determine market trends. When the price of an asset maintains above the 200-day SMA for a long time, it is generally seen as being in a bull market;
Conversely, if the price remains low for a long time, it may indicate a bear market.
Additionally, moving average crossovers are often used as buy and sell signals, such as when the 100-day SMA crosses below the 200-day SMA, it may suggest a reversal in short-term price trends and signal a sell, as this indicates that the average price over the past 100 days has fallen below that of the past 200 days, making it difficult for the upward trend to continue.
Relative Strength Index (RSI) is a momentum indicator used to measure whether an asset is overbought or oversold.
It aims to achieve this by assessing recent price changes of the asset.
Under standard settings, the RSI measures the price fluctuations of an asset over the most recent 14 periods (14 days for daily charts, 14 hours for hourly charts, etc.) and converts the data into an oscillating indicator between 0 and 100.
The RSI, as a momentum indicator, can clearly show the rate of price change.
When prices rise and momentum increases simultaneously, it indicates a strong uptrend, with buying pressure continuously increasing.
Conversely, if the price rises but momentum weakens, it may indicate that selling pressure is about to take over, and the market trend may reverse.
Traditionally, it is believed that when the RSI value exceeds 70, the asset may be overbought, increasing the risk of a market pullback.
When the RSI value is below 30, it may indicate an oversold condition, and a rebound opportunity may be approaching.
However, traders should treat these values with caution and not simply use them as direct buy and sell signals, as the RSI may also produce false or misleading signals; comprehensive consideration of other factors is essential before making trading decisions.
The Moving Average Convergence Divergence (MACD) shows the relationship between two moving averages to accurately determine the asset's momentum.
It consists of two key lines: the MACD line and the signal line.
The calculation method of the MACD line is to subtract the 26-period EMA from the 12-period EMA, while the signal line is the 9-period EMA of the MACD line.
Many charting tools also present the difference between the MACD line and signal line in histogram form for a more intuitive observation.
By comparing MACD with price trends, traders can gain deep insights into the strength of the current trend.
For instance, when prices keep hitting new highs while the MACD shows lower highs, it indicates that the momentum behind the price increase is weakening, increasing the risk of a market reversal.
Additionally, the crossover points of the MACD line and the signal line also have significant trading indication meanings.
When the MACD line crosses above the signal line, it is often seen as a buy signal; conversely, when the MACD line crosses below the signal line, it is a sell signal.
In practice, MACD is often used in conjunction with RSI, as both measure momentum from different angles, and their combined use can construct a more comprehensive perspective on market technical analysis.
3. Fundamental Analysis (FA): Uncovering the intrinsic value of cryptocurrencies.
(1) The Concept and Goals of Fundamental Analysis
Fundamental Analysis (FA) is an important method used by investors to determine the 'intrinsic value' of an asset or business.
It aims to determine whether an asset or business is overvalued or undervalued by conducting an in-depth study of a series of internal and external factors, and then formulating corresponding buying and selling strategies based on these research findings.
Unlike technical analysis, which focuses on historical price data and trading volume, fundamental analysis adopts a broader research strategy, emphasizing qualitative factors in an attempt to reveal the true value of an asset.
(2) The unique challenges of fundamental analysis for cryptocurrencies.
In the cryptocurrency field, fundamental analysis faces many unique challenges.
Unlike traditional businesses, cryptocurrency networks have a high degree of specificity and complexity, making it difficult to accurately assess them using traditional fundamental analysis indicators.
For example, cryptocurrencies like Bitcoin, which emphasize decentralization, are more akin to commodities, while many centralized cryptocurrency projects cannot provide sufficient and effective information using traditional fundamental analysis indicators like earnings per share, price-to-book ratio, etc.
In addition, there are many easily manipulated data indicators in the cryptocurrency market, which cannot accurately reflect the quality and potential of the projects.
Moreover, a single measurement indicator often fails to comprehensively present the network status being evaluated, for example, an increase in active addresses may merely reflect self-transfer behavior by individual users, and cannot accurately reflect the true activity and value of the network.
In crypto trading, setting reasonable stop losses and take profits is an important means of controlling risk and locking in profits. Here are some practical setting tips:
1. Stop Loss Setting Techniques
Fixed Stop Loss: Set a fixed stop loss price, and once the market price falls below this price, immediately close the position to stop losses.
Trailing Stop Loss: Adjust the stop loss price accordingly as the market price changes. For example, you can set it so that when the market price drops to a certain percentage, the stop loss price automatically rises.
2. Take Profit Setting Techniques
Fixed Take Profit: Set a fixed profit percentage based on the purchase price as the take profit point.
Trailing Take Profit: Gradually raise the take profit point as the market price rises. For example, when the price rises to a certain target price, if it continues to increase, raise the take profit point to capture more profits.
3. Setting Recommendations
Conservative: Set the stop loss point 5%-10% below the cost price, and the take profit point at 50%-75% of the target profit.
Stable: Set the stop loss point 2%-5% below the cost price, and the take profit point at 75%-100% of the target profit.
Aggressive: Set the stop loss point 1%-2% below the cost price, and the take profit point at 100%-200% of the target profit.
4. Setting Principles
Reasonable Setting: The settings for stop losses and take profits should consider market conditions and personal risk tolerance, avoiding being overly aggressive or conservative.
Flexible Adjustment: As market conditions change, promptly adjust stop loss and take profit strategies.
Strict Execution: Once the stop loss or take profit points are set, they must be strictly enforced to avoid emotional trading that undermines the strategy.
The above techniques can help investors more effectively control risks and maximize returns in crypto trading. Investors are advised to choose appropriate stop loss and take profit strategies based on their own situations and investment goals, and strictly adhere to them.
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