From 200,000 to over 20 million: My 7-year comeback in the cryptocurrency world using 'down-to-earth methods'!

Trading cryptocurrencies is about simplifying things, making complex matters simple, and approaching simple matters with seriousness; simplicity leads to greater proximity to success!

Once, a middle-aged man with a pained expression sought Plato's advice, saying: 'Is there any way to reduce the pressure in my life? I feel like I can hardly breathe!'

Plato did not directly answer his question but instead gave him a bag and said: 'Come, I will take you to a pebble path; later you can pick up the stones you think are beautiful and put them in the bag.'

Upon arriving at this pebble path, the middle-aged man discovered that the small stones were oddly shaped and crystal clear, and he kept picking up stones to fill his bag.

Halfway through, the middle-aged man felt that the stones in his bag were a bit heavy, but seeing the beautiful stones, he couldn't bear to give up and continued to fill the bag until he felt he couldn't carry it anymore before reaching the end of the path.

At this point, Plato laughed heartily and said to him: 'Now you know where the pressure in your life comes from, right? Too many desires naturally lead to heavier burdens.'

The middle-aged man suddenly awakened.

'The joy brought by material desires is shallower and narrower than the joy of life itself, and lower than the joy of the spirit.'

The joy of life itself is the joy rooted in the essence of life, and it is also the joy found in the vastness of nature; it is both profound and broad. However, material desires not only destroy the simplicity of life but also obscure the needs and joys of life itself.

The simpler the information, the deeper the thinking can be maintained. The more you focus on fewer but finer things, the cleaner your spiritual life will be. Simplicity is the crystallization and sublimation of the complex and intricate values of life. Simplicity is the polishing and creation of the colorful social life. Only by simplifying desires, spirit, and information can we remove restlessness and complexity and return to simplicity.

Whether you believe it or not, the simplest methods are the most profitable; this is the cryptocurrency world!

Trading cryptocurrencies has the simplest yet most effective method that allows you to easily compound your returns. It can be saved for repeated reading.

Next, we will delve into (Price Action Chart Guide) through several articles. In this series of content, you will systematically learn and master the core knowledge and practical skills of price action trading, gradually establishing a clear and logical chart analysis mindset.

The content you are about to learn includes:

◎ What constitutes price action analysis? Your profit journey begins here.

◎ Candlestick patterns you must master.

◎ The super simple identification method for sideways market fluctuations

◎ How to identify trends and trade trends? The secrets of price action.

◎ Advanced price action patterns, suitable for diligent traders.

◎ Detailed explanation of price action trading entry setups

◎ The overlooked 'rare chart types.'

◎ Recommended tools suitable for price action traders.

◎ Price action trading course

What is price action? The true starting point of the profit journey.

Price action is one of the most popular trading methods among retail traders and is widely used by many institutional traders— but what exactly is it?

Is it really that simple to just 'trade candlestick patterns at support/resistance levels'?

Many people's understanding of price action is like this:

'Learning price action trading means waiting for your favorite candlestick patterns to appear on the chart and then quickly clicking the buy or sell button before the opportunity disappears!'

The internet is filled with too much misleading information, which is exactly why many people develop incorrect and deadly misconceptions.

The purpose of this guide is to fill these knowledge gaps and help you establish the correct trading mindset!

If someone asks me, 'What exactly is price action trading, and how should I do it?' I would break it down into the following four core steps:

1. Chart analysis - combining market structure with other technical elements (including top-down analysis)

2. Trading signal identification - including various candlestick patterns and breakout behaviors (some specific patterns perform better)

3. 'Position assessment'— also known as 'context confirmation.' Are we currently in a technically valid zone or in an invalid market zone?

4. Predictive ability— based on current chart information, can you make reasonable predictions?

These four steps are the foundation of my trading decisions.

Before considering any trading action, you must first conduct chart analysis! Do not do anything before you understand the chart!

The essence of price action is to extract information from a 'naked chart' to predict future price movements without needing to load a bunch of unnecessary technical indicators. Before diving deeper, let's first discuss the chart itself.

Compare: polluted chart vs. clean naked chart. This is an example chart I found from a forum.

At first glance, this chart seems 'very professional'; it may be a bit interesting to play with in the short term. However, in the long run, it is too complex and cluttered— as a trading workspace, it places too heavy a data processing burden on the brain and will quickly lead to fatigue.

I personally prefer this style of environment in the following chart:

As you can see, this chart is my trading chart, very clean, minimalistic, completely centered around price. What I'm doing here is a bearish rejection signal trade on USDCAD, aiming to capture a mean reversion.

Why am I fond of price action-based forex trading systems?

◎ Decisions can be made directly from the chart without needing flashy tools.

◎ 'Trade what you see, not what you 'imagine'.'

◎ It's very easy to form a logically clear trading idea

◎ You can make decisions without the need for massive data support.

◎ Keep the strategy simple, logical, and easy to execute

Every time your eyes land on the chart, the first thing you need to do is assess the current market state— is this a 'tradable environment'? If you can't even read the chart, don't place any bets lightly!

Remember to apply your most basic technical analysis skills— many beginners fail because they skip this step!

Stick with this tutorial until the end, and we will thoroughly dissect every aspect of my trading strategy, allowing you to immediately apply them to your own charts for practice...

Checkpoint: Price action trading strategies are not just about jumping into the market upon seeing a certain candlestick pattern or relying on an isolated technical signal. Before making a clear, confident trading decision that won't keep you up at night, you first need a clean chart environment and solid technical analysis skills.

Candlestick patterns you must master before predicting price movements.

Candlestick patterns are the most widely known part of price action trading.

Candlestick charts were first introduced to the Western world by Steve Nison through his classic work (Japanese Candlestick Charting Techniques).

Another pioneer in technical analysis, Martin Pring, introduced the 'Pin Bar' in his classic work (Technical Analysis Explained), which remains a hot topic among price action traders.

Next, I will showcase some key candlestick patterns and the concepts behind them to help you quickly get started with the price action trading system.

Before continuing to learn, you must be able to read basic candlestick charts. If you are not familiar with this yet, please first check the relevant articles on candlestick patterns from 'Traders Say.'

Please read: (A wealth of knowledge: 34 classic candlestick patterns explained, considered the most comprehensive in history, worth collecting!), (A wealth of knowledge | The most comprehensive candlestick pattern practical guide: Understand 12 high win-rate patterns at once), (10 major chart patterns every trader must master to help you accurately predict market trends!)

Long shadow candlesticks: a powerful tool for predicting future trends.

When one end of a candlestick's body has a long upper and lower shadow, it indicates that the market has reacted with a 'rejection response' at that price level.

This kind of 'rejection' can serve as an early warning signal for an impending reversal.

These kinds of long shadow candlesticks often serve as templates for the following patterns:

Pin Bar, Hammer, Shooting Star, and my favorite 'Rejection Candle'; most of my trades are based on this type.

A long shadow on a candlestick implies that the market may reverse direction from its current trajectory, depending on which side the 'rejection' comes from.

In short, this is a price action reversal signal, from which traders can predict future price movements.

This is also why 'reversal/rejection signals' are so popular among traders - when they see these long-shadow candlesticks appearing in key areas of technical analysis, they decisively buy or sell.

Let's look at some cases:

Case 1: Long tail bearish rejection signal

The candlestick shown above, with a long upper shadow, suggests that the market may continue to decline following this bearish rejection signal.

We can see that the market indeed continued its downward trend, resulting in a profitable trade.

Case 2: Continuous lower shadow bullish rejection signal

After two consecutive candlesticks with long lower shadows, can you guess where the market will go next?

Indeed, the market did embark on a beautiful upward trend, perfectly echoing the rejection signal from the lower shadow.

However, can we mindlessly enter every 'long shadow' signal? Please see the obvious example below...

Therefore, according to what we currently observe, this long evil candlestick clearly depicts the price direction.

With such an upper shadow, the market will decline, right?

In the image above is a super large upper shadow candlestick that seems to indicate the market should go down, right?

But what about reality? The market did not follow the script at all!

What happened? This is the forex market; nothing is guaranteed. This is precisely why 'risk management' occupies an important position in your trading education. When things do not develop as we expect, good risk control can prevent significant losses to your account.

The reason I deliberately inserted a 'failed case' here is to prevent you from thinking that price action trading is all 'a dream world' but to remind you: actual trading has uncontrollable factors.

Summary

Long shadow candlesticks are a very easily recognizable price action signal, usually indicating that the market is about to reverse. But remember, they cannot be the sole basis for your trading decisions!

Combine these long shadow signals with other high-value technical levels on the chart (such as support and resistance, trend structures) to integrate this information and build a logical, valuable trading idea.

This is where the true power of price action trading lies.

Even the most diligent fisherman would not go out to sea to fish during a stormy season but would carefully safeguard his boat, knowing this season will pass, and a sunny day will come! Follow me, and I'll teach you how to fish and how to fish; the doors of the cryptocurrency world are always open, and only by following the trend can you lead a life in harmony with the trend. Save this and keep it in mind!