For 15 years, I have been involved in the Bitcoin space, earning wealth that I could never have made in my lifetime, surpassing over 99% of those around me.
Today, Cheng Ge shares an effective profit model in the crypto space. Learning it is enough to dominate and carve out your own new territory. Feel free to take it!
Three Laws of the Crypto World.
Newton discovered the three laws of motion and became a master of physics. Today, can we summarize the three major laws of the crypto world and gain everyone’s support? Haha.
1. Correlation patterns in the crypto world.
When Bitcoin (BTC) rises, mainstream coins follow; when Bitcoin falls, mainstream coins plummet. When Bitcoin is range-bound, altcoins dance chaotically. When Bitcoin plummets, altcoins run away.
This correlation pattern is basically known by everyone in the crypto world. Generally, Bitcoin leads the way, and other coins follow Bitcoin's lead.
What I'm saying here is not absolute; it's basically how major market trends evolve. For example, the small bull market we have seen from the beginning of this year until now has been driven by Bitcoin. Of course, some meme coins, model coins, and single-machine coins are exceptions.
The second law: Timing Law. Patience is needed for entry timing, while exit timing should not be delayed.
Rebound operations differ from operations in an upward trend; in an upward trend, you generally wait until the rise stops and the price begins to fall before selling. However, in a rebound scenario, selling does not have to wait until the rise is about to end.
In rebound operations, it is emphasized to sell early, generally decisively taking profits once there is a gain; if, for some reason, there is no profit yet, and the market's rebound is about to reach its theoretical space, it is also necessary to sell decisively.
Because the duration and rise of rebound markets are limited, if you wait until it’s confirmed that a peak has been reached before selling, it is generally too late.
The third law: The Leek Law. The world did not originally have leeks; when too many people are eager for quick success, they inevitably become leeks! If you want to turn things around, do not focus on short-term gains and losses; being overly cautious will hinder your chances of success!
Finally: Summarizing a master's three investment decisions: 1. Invest in what you know; 2. Hold steadfastly; 3. Be prepared for overall planning.
Success is not random; opportunity favors the prepared. Follow the public account (Wanchuan Zhiqiu), where a skilled helmsman adept in medium and short-term combined wave arbitrage will guide you. Regardless of market conditions, I will accompany you on your journey in the crypto world.
I know a friend in New York who likes to trade spot, occasionally trading contracts, particularly keen on bottom fishing, adding positions as prices drop. In just a few years, he has grown from small to large and now makes a living trading cryptocurrencies.
I have improved his 'trading strategy' through my modifications, and this year, after practice, I turned an initial capital of 200,000 into 29 million in less than a year. I hope this helps my followers!
One of the biggest challenges faced by traders in Smart Money Concepts (SMC) is accurately timing their entry. Even if you identify a high-probability trading opportunity on #higher time frames, entering too early or too late can lead to unnecessary losses. This is why optimizing entry points through lower time frames becomes crucial.
Lower time frames, such as the 15-minute (15M), 5-minute (5M), 3-minute (3M), and 1-minute (1M) charts, allow traders to seize entry opportunities more precisely. Through this approach, traders can reduce risk, tighten stop loss ranges, and maximize profits.
This lesson will cover the following aspects:
1. Why using lower time frames can enhance trading accuracy.
2. How to use multi-time frame resonance for confirmation.
3. How to gradually optimize from 15M to 1M for precise entries.
4. Key concepts such as Break of Structure (BOS) and Market Structure Shift (MSS).
5. How to use order blocks (OB) and fair value gaps (FVG) to achieve precise entries.
6. Examples of optimized entries on lower time frames.
Why entry on lower time frames can enhance trading accuracy.
Most retail traders rely solely on signals from higher time frames to enter the market, which often leads to entering too early or too late, and sometimes getting stopped out before the market moves in the expected direction. In contrast, #smart money operates by observing price behavior on lower time frames to confirm signals before entering.
Using lower time frames has three core advantages:
1. Tighter stop loss settings.
When executing trades on higher time frames (like 1-hour or 4-hour), larger stop loss ranges are usually required to cope with price fluctuations. However, entering on 1M or 3M charts allows for smaller stop points while maintaining the same direction as the larger cycles. This can significantly improve the risk-reward ratio.
2. Confirm whether smart money is truly involved.
Instead of blindly entering when the price reaches the supply and demand zone on a higher time frame, it is better to confirm whether there are signs of smart money behavior through lower time frames. This includes observing structure breaks, structure changes, liquidity grabs, and more refined order blocks.
3. Avoid false breakouts.
Seemingly strong breakouts on higher time frames may often just be a trap for the unwary (liquidity traps). By observing lower time frames, traders can more clearly distinguish between real breakouts and false breakouts, thus avoiding being 'tricked' by the market.
How to use multi-time frame resonance for confirmation.
SMC traders employ a top-down analysis approach, meaning they analyze multiple time frames before executing trades. This method ensures that the entry direction aligns with the overall market trend.
1. Higher Time Frame (HTF) - Daily, 4-hour, 1-hour.
◔ Used to determine the overall trend and trading bias.
◔ Mark key supply and demand zones, order blocks (OB), fair value gaps (FVG), and liquidity areas.
◔ Example: If the 4-hour chart shows a bullish structure, traders should look for long opportunities rather than shorting.
2. Mid-term time frame (MTF) - 15 minutes, 5 minutes.
◔ Used to optimize entry points by observing market structure shifts (MSS) and break of structure (BOS).
◔ Can help identify potential entry areas on lower time frames.
◔ Example: If the 15-minute chart shows liquidity sweeps + BOS, it indicates signs of smart money accumulating.
3. Lower Time Frame (LTF) - 3-minute, 1-minute.
◔ Provide the most precise entry points with minimal losses.
◔ Traders will look for the last BOS or MSS as confirmation before entering.
◔ Example: Entering within the 15-minute demand zone using order blocks on the 1-minute chart allows for setting smaller stop losses.
Through this multi-time frame analysis method, traders can improve their trading accuracy and reduce risk.
The process of optimizing entries from 15 minutes to 1 minute.
Step #1: Identify higher time frame trends.
Before looking at lower time frames, it is essential to assess the overall market direction through higher time frames (such as 4-hour or 1-hour charts).
◔ If the market is in an uptrend, look for long opportunities.
◔ If the market is in a downtrend, look for shorting opportunities.
◔ Mark key areas where prices may react, such as order blocks, fair value gaps (FVG), and liquidity areas.
Step #2: Look for market structure changes on the 15-minute chart.
Once the price enters a key area marked on the higher time frame, switch to the 15-minute chart to observe price behavior.
◔ Liquidity grab: If the price sweeps previous highs/lows (like clearing stop-loss orders), it indicates the presence of smart money manipulation.
◔ Structure Break: When price breaks through a key structural level, it indicates a potential trend reversal.
◔ Demand zone rebound: Price shows a strong rejection pattern in the demand zone, indicating that buying pressure is emerging.
Step #3: Further optimize entries on 5M, 3M, or 1M charts.
After confirming structural changes on the 15M chart, continue looking down to lower time frames (5M, 3M, 1M) to find the optimal entry points while minimizing stop losses.
◔ Look for the last BOS or MSS as confirmation signals.
◔ Find a more refined OB or FVG as an entry area.
◔ Wait for the price to retrace to OB or FVG before entering, rather than chasing after price movements.
By refining entries to the 1-minute chart, traders can achieve smaller risks and higher precision in their entries.
Key concepts of SMC: BOS, MSS, OBs, and FVGs.
1. Break of Structure (BOS).
When the price breaks through a key high or low, it forms a Break of Structure (BOS), which usually indicates that the trend will continue. BOS occurring on the 15-minute chart (15M) can be used to confirm trend direction, while BOS on the 1-minute chart (1M) is mainly used for precise entry.
2. Market Structure Shift (MSS).
Market Structure Shift (MSS) is a sudden reversal of price structure, usually caused by the manipulation of smart money. This often occurs after liquidity grabs, with prices quickly reversing in the opposite direction.
3. Order Blocks (OBs) used for optimizing entries.
Order Blocks (OB) are locations where smart money previously concentrated their positions. Instead of entering at any location, traders should choose optimized order blocks within lower time frames to improve entry accuracy.
4. Fair Value Gaps (FVGs) used for precise entries.
Fair Value Gaps (FVGs) are price gap areas caused by institutional orders. These areas have a 'magnet effect', often attracting price back for a continuation in the original trend direction. In the OBs of higher time frames, using FVGs on the 1-minute or 3-minute charts for entry can achieve optimal trading precision.
1. 4-hour chart (4H): Price touches the demand zone on the higher time frame.
2. 15-minute chart (15M): Price sweeps through previous lows (liquidity), then breaks upward through the structure (BOS).
3. 5-minute chart (5M): Price pulls back to the newly formed bullish order block (Bullish OB).
4. 1-minute chart (1M): Price enters the order block, while liquidity sweeps occur again forming a BOS.
5. Entry point: Go long at the order block position, set the stop loss below the structural low, and keep the stop loss minimal.
This entry method ensures minimal losses while maximizing potential profits.
Conclusion.
Using lower time frames to optimize entries is a powerful technique that allows traders to enter with greater accuracy, set smaller stop losses, and achieve a better risk-reward ratio. Instead of blindly entering based on signals from higher time frames, traders can further switch to 15-minute, 5-minute, or even 1-minute charts to confirm market structure, identify liquidity grabs, and find 'sniping' entry points at order blocks (OB) or fair value gaps (FVG).
The top ten rules of the crypto world, newcomers remember this!
1. In a bull market, the hot coins that drop the fastest are those that are heavily speculated on, especially those with severe market control; their bubbles burst quickly. The more people chase, the more dangerous it is. It's like inflating a balloon; once it's too big, it will inevitably pop.
2. The tricks of altcoins are generally similar: the common pattern is to first crash hard, then slowly pull up, continuing to harvest in a different way. This is how altcoins function, and you must be mentally prepared.
3. The long-term trend of the market is upward. If you look over a longer time frame, the curve is relatively stable, with short-term ups and downs being normal; the long-term trend is generally a gradual rise.
4. Coins with potential are often unnoticed; truly promising coins tend to remain low-key at the bottom, with few mentions. Conversely, those low-profile coins quietly rise, such as C98 and LEVER.
5. Be cautious with newly listed coins on exchanges; avoid those that experience violent surges and drops, as these are usually traps set by market makers, entering them will lead to losses.
6. It’s common for prices to fall after buying, and rise after selling; this is normal in the crypto market. If your mindset can't handle this kind of volatility, you really need to practice.
7. The strongest rebounds do not represent the coins with the greatest potential. Often, they are not the ones with potential but are instead speculative coins that have been hyped up. Don't be fooled by appearances; truly promising coins tend to fluctuate more steadily.
8. Beware of sudden pullbacks; if a coin rises after you buy it and suddenly pulls back, it might mean the dealer is starting to offload. Be careful not to get cut.
9. Coins that may explode in the latter half of a bullish market; those that performed poorly in the earlier phase may explode several times in the latter half. They are like marathon runners who exert effort in the latter part.
10. Markets that have been sideways for months may explode into a bull market; some markets may experience several times gains and still remain sideways for months, indicating they are likely waiting for the next wave of explosion. Keep a close eye on these coins. If trades are not going smoothly and you feel lost, remember two things: first, be proactive and decisive; second, stay online and react promptly to news!
Meeting is fate, and knowing is a bond. I firmly believe that fate will lead to recognition, while a lack of connection is destiny. The journey of investment is long; temporary gains and losses are just the tip of the iceberg. Remember, even the wisest can make mistakes, and the foolish may find success. Regardless of emotions, time will not stand still for you. Set aside your worries and stand up to move forward again.
Teaching someone to fish is better than giving them a fish. Regardless of whether investors are beginners or experts, what they gain from me is not just financial profit but also growth in investment knowledge and experience. In following my investment journey, I will provide not only analysis ideas and basic knowledge of watching the market but also methods for using various investment tools, alongside exciting fundamental interpretations, sorting through chaotic international situations, and identifying various investment forces. This will allow you to become both a winner and an expert in investments!
In the cryptocurrency market, mastering the seven trading principles must ensure a deep understanding of the investment strategies of offense and defense, allowing one to remain stable amid winds and turn danger into safety. Having navigated the market for many years, I am well aware of the opportunities and traps within. If your investments are not going smoothly and losses leave you unsatisfied, follow me, and I will correct your past. If you are currently profitable, I will teach you how to protect your profits. If you are still lost in the market, I am willing to guide you forward. The true tragedy of trading is not how much you suffer but how many opportunities you miss! Seize the present and move forward together, as someone who will leave a name in the crypto world!
Opportunity has arrived, assets doubled! Follow Cheng Ge closely to easily make big money.
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