Ten Minutes to Master Cryptocurrency Trading Skills

1. The Distinction Between Investment and Speculation

Many cryptocurrency enthusiasts confuse 'investment' with 'speculation.' 'Foreign Economics' clearly distinguishes the two: investment is holding for the long term to earn dividends, while speculation is buying low and selling high in the short term to profit from price differences.

If you want to invest in blockchain, you can hold onto a well-chosen project for the long term; however, trading cryptocurrencies is speculative, focusing on capturing price fluctuations, without overly worrying about the project's quality.

2. Core Elements of Understanding Market Trends

The key to trading cryptocurrencies is finding opportunities within price changes, with four core elements: price, trading volume, time, and news, all of which involve 'human' psychology.

1. K-line (Price)

Candlestick charts, or K-lines, have the upper and lower edges representing the opening and closing prices for a certain period (e.g., daily for the day's first and last transaction prices). The thin lines above and below the body correspond to the highest and lowest prices.

Note: In China, red indicates an increase and green indicates a decrease, while in the virtual currency market, due to its foreign origins, some platforms may use red for a decrease and green for an increase, so be careful to distinguish. K-lines arranged by time can intuitively show price trends.

2. Trading Volume

The red and green bars at the bottom of the interface represent trading volume, indicating the total trading quantity for a specific period; the taller the bar, the more active the trading.

3. Moving Averages

Moving averages are lines connecting the average values of several K-line closing prices, commonly using periods of 5 days, 10 days, 60 days, etc. When the short-term moving average crosses above the long-term moving average, it signals an upward trend; conversely, a downward trend occurs when the opposite happens. This is the basis of technical analysis.

4. MACD

The Exponential Moving Average, with basic usage similar to moving averages, has advanced interpretations such as 'top divergence' and 'bottom divergence': if the price falls while MACD rises, it may indicate a bottom; if the price rises while MACD falls, it may indicate a top. Its accuracy is relatively high but not suitable for volatile markets.

While technical analysis is not infallible, it provides important references. I focus on analytical teaching, aiming to help everyone profit. If you're confused about your positions, feel free to follow me; I will provide clear insights.