I spent eight years growing a principal of 30,000 to an eight-figure asset, experiencing 17 liquidations, ultimately summarizing these nine golden rules. Today, I am sharing them all to help you avoid five years of detours—
The first 45 minutes of the morning session determine the whole day
Real experts understand: the first 45 minutes of the morning session are the cleanest market conditions of the day. If you see a rapid decline with volume, it is often the last washout by the main forces; if you see a volume-less rise, it is mostly a trap to entice buyers. Remember: the morning session is not for trading, but for formulating strategies for the entire day.
Sudden movements in the afternoon session hide dangers
Sudden surges between 1-3 PM are 90% the work of manipulative traders. The best thing to do during this period is to check your positions, not to chase prices. Real big trends never start suddenly during the afternoon session.
Count the waves during a sharp decline, watch the volume during a slow decline
A single-day drop of 20%? First, count how many waves down it is; is it a continuous slow decline? Focus on observing changes in trading volume. Remember: you can buy the dip during sharp declines, but stay away from slow declines; this is an experience gained through blood and tears.
Sideways is the most ruthless scythe
The most bloodless killer in the market is the prolonged narrow fluctuations lasting over 20 days. During this time, 90% of short-term traders will be slowly worn out. True hunters know how to conserve energy during sideways periods.
Buy before the news, sell on good news
The eternal truth in the crypto world: good news turning into bad news. When everyone knows about a piece of good news, it’s time to exit. Real opportunities always hide in the corners the market ignores.
Cut losses quickly, let profits run slowly
A 5% loss must be cut, consider reducing positions at a 30% profit. This seemingly simple discipline can increase your survival rate by 300%. Remember: cut losses, let profits run.
Leverage is poison, sometimes it is the antidote
Never use more than 3x leverage for trend trades. But there is one exception: when the market experiences extreme panic, it’s okay to moderately increase leverage; this is a golden rule derived from eight years of experience.
Bull markets often have sharp declines, bear markets often have slow declines
Sharp declines in a bull market are money-making opportunities, slow declines in a bear market are death traps. Can't tell the bull from the bear? Just look at the weekly MACD; this is the simplest truth.
The most difficult practice is unity of knowledge and action
Knowing does not equal doing. Those who can't control their itchy fingers will eventually be eliminated by the market. True winners are extremely disciplined 'trading machines'.
These rules may seem simple, but behind each one is the result of millions in losses. The current market is ten times more complicated than in 2017, but there are also ten times more opportunities.
