If you ask this question, you should understand why you will always lose money. I am not trying to discourage you; as a trader, asking others why you lose money is misguided.
Trading has two major analytical aspects: technical analysis and knowledge analysis. Which one are you focusing on? The most basic reference for entry timing is candlestick patterns. Instead of learning how to make money in trading, you should first learn how to preserve capital; that is what you need to focus on.
In the cryptocurrency market, using candlestick charts to determine entry points is an important technical analysis tool. Here are some methods to assess entry points based on candlestick charts: 1. Identify Trends • Uptrend: If multiple bullish candles (green) appear consecutively on the candlestick chart, and each bullish candle's closing price is higher than the previous one, it indicates that the market is in an uptrend. • Downtrend: If multiple bearish candles (red) appear consecutively, and each bearish candle's closing price is lower than the previous one, it indicates that the market is in a downtrend. • Trend Reversal Signals: Certain specific candlestick patterns such as hammer, inverted hammer, morning star, engulfing pattern, etc., usually appear during trend reversals and can serve as entry signals. 2. Pay Attention to Support and Resistance Levels • Support Level: When the price falls to a certain range and bounces back multiple times, that range becomes the support level. If the price approaches the support level and a bullish candlestick pattern appears (like a hammer), consider entering a long position. • Resistance Level: When the price rises to a certain range and retreats back multiple times, that range becomes the resistance level. If the price approaches the resistance level and a bearish candlestick pattern appears (like a hanging man), consider entering a short position. 3. Volume-Price Coordination • Volume-Price Coordination in an Uptrend: If the price rises and the trading volume also increases, it indicates strong buying pressure, and at this time, consider entering a long position. • Volume-Price Coordination in a Downtrend: If the price falls and the trading volume increases, it indicates strong selling pressure, and at this time, consider entering a short position. 4. Special Candlestick Patterns • Hammer: Appears at the bottom of a downtrend, with a long lower shadow, at least twice the length of the body, indicating that the market may reverse upwards, serving as a signal to enter a long position. • Inverted Hammer: Similar in shape to the hammer, but with the shadow above, indicating that the market may reverse upwards, suitable for entering a long position. • Three White Soldiers: Composed of three consecutive bullish candles, each closing price is higher than the previous candle's highest price, indicating a strong upward market, suitable for entering a long position. • Bullish Engulfing: A long bearish candle followed by a shorter bullish candle, with the bullish candle completely within the body of the bearish candle, indicating that the downtrend may end, suitable for entering a long position. 5. Combine Technical Indicators • Moving Average Crossovers: When a short-term moving average (like the 5-day moving average) crosses above a long-term moving average (like the 10-day moving average), it forms a golden cross, indicating that the market may enter an uptrend, serving as a signal to enter a long position. • MACD Indicator: When the short-term MACD line crosses above the long-term MACD line, forming a golden cross, it indicates that the bullish trend in the market is strengthening, suitable for entering a long position. 6. Risk Management • Set Stop-Loss: When entering a position, it is advisable to set a stop-loss point to control risk. The stop-loss point can be set outside the key support or resistance levels. Why look at 4-hour, 1-hour, and 15-minute candlesticks? In the cryptocurrency market, after years of experience, I have seen too many people lose money by stubbornly sticking to one candlestick period, being repeatedly rubbed by the market. Today, I will share my invaluable skill—Multi-Period Candlestick Trading Method, just three steps, directly grasping trend, levels, and timing! 1. 4-Hour Candlestick: The 'Anchor of Stability' This acts like a GPS in the cryptocurrency market, helping you find the big direction amidst numerous fluctuations. Don’t underestimate a 4-hour candlestick; it filters out intraday noise, making trends clear: Uptrend: Highs and lows rise like steps, and corrections are opportunities to buy low! Downtrend: Highs and lows slide down continuously; rebounds are like crocodile tears—don’t get caught up, find opportunities to short instead. Sideways: Prices bounce around in a range; frequent trades just pay fees to the exchange, best to lie down and watch. Remember, following the trend in the cryptocurrency market is the way to profit; going against it is like joking with real money! 2. 1-Hour Candlestick: Precise Targeting With the big direction set, the 1-hour candlestick is our 'battle map.' Focus on identifying support and resistance levels: trend lines, moving averages, previous lows—these act like the market's 'moat'; when prices approach, there is often support, indicating potential entry points; previous highs and key resistance levels, combined with top patterns, signal withdrawal—take profit, reduce positions as necessary. 3. 15-Minute Candlestick: 'The Final Second' Don’t use the 15-minute candlestick to determine trends; it’s solely for identifying the best entry points! Like a sniper waiting for a prey's mistake, we wait for these signals: key price levels showing engulfing patterns, bottom divergences, or golden cross signals—this is the right time to act; pay attention to volume! Breakouts without volume are suspect, likely false breakouts; must see increased volume before entering. Multi-Period Coordination Practical Guidelines Set Direction: Check the trend on the 4-hour chart, know whether to go long or short; Draw Circles: Mark support and resistance areas on the 1-hour chart, locking in entry ranges; Wait for Signals: Look for reversal signals on the 15-minute chart, decisively pull the trigger! Blood Loss Summary: Pitfall Avoidance Guide When multiple periods conflict, don’t force the issue; it's better to wait on the sidelines than to lose money; small period volatility is fast, so set stop-losses carefully, or risk being swept away in moments; trend, position, and timing are all essential; don't rely on feelings to guess, use this method instead! I've been using this method for over two years; it has become my 'trading muscle memory.' Honestly, there is no trading holy grail; the key is to review often, summarize, and make these methods your own. Key Points for Retail Traders in the Cryptocurrency Market, shared with you! 1. Keep a Close Eye on Bitcoin Trends In the cryptocurrency market, Bitcoin often leads the direction of price movements. While Ethereum can sometimes be strong and have independent trends, most altcoins are influenced by it. 2. Pay Attention to the Bitcoin-USDT Relationship Bitcoin and USDT often move inversely; when USDT rises, be cautious of Bitcoin's decline, and when Bitcoin rises, it’s an opportunity to buy USDT. 3. Seize the Early Morning Trading Opportunity Between 0:00 and 1:00, price spikes often occur. Domestic traders can place low buy orders and high sell orders before sleeping, possibly leading to profitable trades. 4. Observe Morning Price Movements Between 6:00 and 8:00 AM is crucial for determining whether to buy or sell. If the price has been falling from 0:00 to 6:00 and continues to fall, it’s advisable to buy or add to positions, expecting a rise that day; if it has been rising and continues to rise, it’s advisable to sell, as a drop is probable that day. 5. Watch for Afternoon Volatility Points Pay special attention at 5:00 PM, as American traders start operating due to time differences, which may trigger price fluctuations; many significant price movements happen then. 6. Beware of 'Black Friday' In the cryptocurrency market, there is a saying about 'Black Friday'; while significant drops can occur, there can also be large rises or sideways movements, so stay informed on news. 7. Be Patient with Declining Coins If a coin with decent trading volume declines, don’t worry; hold patiently, and you might recover your investment. It could take as short as 3-4 days, or as long as a month. If you have extra funds, consider averaging down to speed up recovery, unless it’s a worthless coin. 8. Stick to Long-Term Spot Trading Holding onto the same coin for the long term and trading less often tends to yield better returns than frequent trading; it’s all about patience. 9. Monitor External Influencing Factors The cryptocurrency market is influenced by various factors, such as each country's attitude towards cryptocurrencies, negative news can lead to declines; U.S. financial policies; influential figures' views on cryptocurrencies, like comments from Musk. Stay tuned to financial news. 10. Maintain a Good Trading Mindset A good trading mindset is crucial; don’t panic during drops, and don’t get arrogant during rises; secure your profits. Finally (Trading Insights): The longer I trade, the more I feel that technique is a weapon, but the mindset is the armor. I’ve spent sleepless nights staring at collapsing candlesticks during bear markets, and nearly lost my head looking at unrealized profits during bull markets. Eventually, I understood that moving averages tell you the trend, and RSI indicates strength, but what really determines profit and loss is the restraint when faced with 'should I chase the rise' and the decisiveness when it’s time to 'stop-loss,' and remaining clear-headed when 'the market goes crazy.' The ups and downs of the cryptocurrency market are rapid, enough to experience life's highs and lows in a single day; but the logic of making money is slow, requiring a decade of patience to hone one's skills, to engrain the rules in your bones, and integrate understanding into every decision. Remember, the market is always full of opportunities; what’s lacking is prepared individuals. Instead of chasing the trends, it’s better to calm down and sharpen your own 'sword'—when the storm comes, you'll find it’s not luck that saves you, but the 'you' that understands the market and yourself better. May we all maintain our rhythm amidst fluctuations and earn what we understand within our capabilities during cycles. Lastly, remember that while we speculate and trade cryptocurrencies, we are definitely not gambling; with so much noise, we must sift through the essential, adhere to our principles, and ultimately reap rewards. This has been the trading experience I shared with you today.
I am Xiao O, a professional analyst and educator, your mentor and friend on your investment journey! As an analyst, my fundamental role is to help everyone make money. I solve confusion and stuck positions, speaking with strength. When you lose your direction and don’t know what to do, follow Xiao O for guidance.