After seven years of trading coins, I lost over 100 in the first three years, and earned back a few hundred in the following years; every penny behind it is a lesson learned through blood and tears!
This market is always repeating the same secret: 90% of retail investors focus on news to trade coins, 9% of smart people pay attention to the movements of market makers, while 1% of aggressive players are dissecting the market gene using moving averages.
Step 1: Verify the moving averages Treat the daily moving average as three old traditional Chinese medicine doctors with distinct personalities — the 5-day line is the head of the emergency department, the 30-day line is the internal medicine expert, and the 60-day line is sitting in the consultation room like a grand master. When the emergency department head suddenly becomes alert and rushes to check the pulse of the two old predecessors (the 5-day line crosses above the 30/60-day lines), this is a signal that the market is preparing to go into the ICU for rescue. Conversely, if the emergency department head slips and rolls off the grand master's chair (the 5-day line crosses below the 30/60-day lines), don’t hesitate, immediately adjust your position.
Step 2: Establish a trading system to prevent impulsive decisions
Now, please stick a note on your trading interface with a bold marker that says: When moving averages clash, mere mortals should retreat. When the 5-day line and the 30-day line are entangled like twisted dough, rushing into the market is akin to rolling dice and guessing odd or even. A true hunter only pulls the trigger when all three lines are marching in the same direction.
Here's a counterintuitive cold fact: In the volatile world of cryptocurrency, the simpler the moving average strategy, the more lethal it becomes. Just like true martial arts masters never need to display fifty starting moves, a breakout of the 5-day line is the signal to draw the sword, and when the 60-day line turns, it’s time to sheath it.
Step 3: Weld discipline to the operation table
I've seen too many people write their trading plans on napkins, only to tear them up in the middle of the night after being scared by a sudden market movement. The most ruthless yet merciful aspect of the moving average strategy is that it forces you to become an emotionless signal execution machine.
Here's a dark humor story: a trader who consistently profited using the moving average strategy for three years received a warning of a breakout during a wedding ceremony last year. He rushed to the bathroom to close his position before coming out to exchange rings. Afterward, the bride scolded him, but upon seeing the account balance, she silently got him a top-of-the-line monitor.
