Trading cryptocurrencies is actually very bloody; the reality is one wins, two break even, and seven lose. This is the only unchanging truth in this market. If you are currently in a state of loss and confusion,
and your funds are within 500,000, and you want to quickly open up in the crypto world through short-term trades, then please read this post carefully. I believe you will have an epiphany about the essence of trading after reading it.
Control your desires, and act in accordance with knowledge.
Everyone has greed, anger, and ignorance. When the market rises, we always want to earn more, and when it falls, we start playing dead, unwilling to admit defeat. After finally getting out of the red, we just become like a herdsman. In this market, if you have no principles, you will definitely be swayed by market makers and your own emotions. My principle is that each loss should not exceed 5% of the principal, and if I profit, it should be at least 10-30%. Once the profit exceeds 20%, I start to give back, and I must ensure that I cannot lose in that trade. Even if your win rate is only 50%, after 100 trades, your returns will reach 800%.
Is it hard? The difficulty lies in human greed and fear, acting in accordance with knowledge.
Concentrated investment, learn to be in cash.
The biggest pain point for retail investors: not knowing how to be in cash, weakly buying on dips, having less capital but more coins, and stubbornly holding on to losses. Below 500,000, do not exceed 3 coins; above 1 million, you can control it to a maximum of 5 coins. Remove those coins that are below the major moving averages, have weak characteristics, and are not in mainstream tracks. Admitting mistakes may require great courage, but acknowledging your errors is the beginning of our success.
Those who can buy are apprentices, those who can sell are masters, and those who can be in cash are the grandmasters.
When the market is not good, you must be able to control your hands. When you truly have confidence, dare to take large positions. In fact, most profits in the investment market come from a few good coins.
I never hold more than 5 coins (BTC/SOL/ETH/BNB/Doge) with 60% of my funds, even in a bull market. I allocate 20% to leading coins in bull market sectors, and the remaining 20% is always in cash waiting.
Volume and price are the only indicators that do not lie.
Return to basics; mastering volume and price is enough to let you outperform 80% of traders.
A breakout with increased volume often means the entry of funds, usually leading to significant market movements. 0.5x volume indicates a clear decrease, and a new high with reduced volume shows that the main force has a high degree of control, which can rule out the possibility of the main force selling. In an upward trend, you are likely to benefit.
If a coin's increase exceeds the previous day and the volume ratio is less than 1, it indicates there is still considerable room for growth. The probability of rising again the next day is very high. Conversely, if the volume is 1.5 times and encounters resistance at a certain level, it often indicates a peak signal. When studying volume, it must be combined with price; understanding the balance of long and short forces captures the essence of volume and price.
A sharp decline is the touchstone for assessing cryptocurrencies.
In a bull market, a sharp decline represents a buying opportunity and a good time to select coins. If the overall market experiences a sharp decline, but your coins only drop slightly or remain unchanged, it clearly indicates that funds are collectively holding up and refusing to fall. Therefore, such coins can be held with confidence, and they will surely yield returns.
If the overall market drops sharply and your coin drops significantly, but the next day the market rises and your coin surges, this is likely the main force washing the market by using the overall market decline. Such coins can be bought when the overall market drops sharply and sold when the market rises, achieving short-term rebound profits.
Trend is king; follow the trend.
Once a trend is formed, it will not change easily. Novices die from trying to catch the bottom, while experts die from trying to catch the top. The wisest choice is not to guess, predict, or assume, but to follow the trend. If you cannot judge the trend, then look at the moving averages. When all moving averages are aligned at a 45-degree angle upwards, it’s hard to lose with such coins. If you are doing short-term trading, you need to pay attention to the 5-day moving average; as long as it does not break below it, the trend remains strong. The lifeline for swing trades is the 60-day moving average; coins in an upward trend that first drop to the 60-day moving average often present at least short-term opportunities.
Buy when there are divergences, sell when there is consensus.
This is like the previous Ethereum ecosystem sector. When Ethereum rises broadly, there will definitely be differentiation because the main force wants to cash out when everyone is willing to take over. Therefore, it is important to sell when there is consensus.
Buying on divergence and focusing on strong coins follows a principle: the strong get stronger. A coin can become a strong coin or a meme coin because it is favored by market funds. Once someone sells this coin, more people will buy it, and it often continues to rise, reflecting in the K-line pattern as a first bearish engulfing.
The less smooth the trading is, the more you need to stay calm.
The difficult road is not one that everyone is qualified to walk. Only those who can endure the pain of rebirth deserve the beauty of resurrection. So many people suffer great losses just like I did; when I entered the market in 2017, I lost my way completely. I am very grateful for this experience because I have risen again, and I believe I will not fall down again. In fact, when trading is going well, one must remain low-key. Before the first half of 2017, my funds also exceeded a million. There were not many people, but I was high-profile. Being high-profile only leads to blind arrogance, and a gradual loss of awareness of risks.
Why did I choose to trade? I was born into poverty and cannot die in destitution. I don't know how many people, like me, come from rural backgrounds and want to change their fate. Previously, I earned my first pot of gold in internet finance, and after entering the cryptocurrency world in 2017, it seemed tailor-made for people like us. It doesn't require socializing or bowing down. If you have the ability, it becomes your ATM machine; if you don't, you must bear the consequences you expect. The crypto world is very fair. Of course, every breakthrough and transition is painfully difficult, but every failure is a step on the ladder to financial freedom.
Continuously focus on CFX, ENA, ETH, SOL, XRP
