Today, let's talk about some practical content; I'll try to explain how to trade cryptocurrencies using candlestick charts in simple terms because sometimes analysts' language is too professional, sometimes it seems like saying nothing at all, and sometimes it feels like hindsight.
Yesterday, I made my first 40,000 in contract trading with very little capital; although it's not much, considering I invested 800,000 in spot, and now it has become 400,000, I can feel the difference. My own feeling is:
Previously, when I was trading spot, it was like a person who didn't understand the water's nature navigating a small boat drifting along the current, firmly believing that this way I would find treasure. Now, however, I practice with a surfboard in the waves, enjoying the learning process and firmly believing that my skills will improve.
Yesterday morning, we could see the price rising from a bottom of 4450, oscillating near the 30-day moving average on the 4-hour level for a long time. At this time, the support level below is 5000, and the resistance level above is around 5700.
But after opening the order, it was not so smooth; the market experienced a completely opposite situation: not only did it not rise, but there were also a large number of sell orders, directly breaking below the 30-day moving average.
What traders need to do is actually very simple: closely follow the market trend, simply put, 'buy high and sell low'—which is completely different from spot trading, where you just buy when it drops and buy more as it drops.
So my operation had to turn into this. I immediately closed my position, losing over 100 USD, and promptly notified my group friends—of course, don't think that many people listen to me because I have always emphasized one thing: learning independently and thinking for oneself, so I estimate that out of 500 people, only a few would pay attention.
Preserving the principal is the top priority; all operations must include stop-loss. Continuing to look at the above chart, after breaking down, a large number of buy orders appeared again, and it broke through and stabilized above the 30-day moving average. What does it mean to stabilize? It involves looking at several indicator aspects:
First, a large bullish candlestick goes straight up; second, trading volume increases significantly; third, the timing is confirmed; everyone can switch the chart from 4 hours to a shorter time to understand.
So what should we do at this moment? Buy! And be very decisive; the effective breakthrough of the 30-day moving average on the 4-hour chart is a significant move. Don't think about anything else; it's a great opportunity.
I immediately bought again, and after the purchase, I started making a profit. Later, there was a continued significant drop in volume, so I chose to close my position. After closing, it seemed that the gains were okay, but in reality, although the result was good, my operation had errors.
At this point, it should be about locking in half of the profit while preserving the principal, accepting a profit of only 500 USD instead of closing everything. But because of a retail mentality, I closed everything—don't be afraid of losses; learn to let part of the profit (like 50%) run in a confirmed trend.
But it doesn't matter, continue to observe. We will never run out of opportunities, only lack of capital.
I am Xiao O, a professional analyst and teacher, a mentor and friend on your investment journey! As an analyst, the most basic thing is to be able to help everyone make money. I will help you resolve confusion and trapped positions, speaking with strength. When you are lost and don't know what to do, follow Xiao O, and I will guide you.
