Treat cryptocurrency trading as a serious profession, clocking in and out at the same time every day — this is the survival rule I've summarized from ten years of experience. In my early years in the industry, I also spent whole nights glued to the screens, chasing trends and suffering losses that kept me up at night. Later, I gritted my teeth and persisted in reviewing and summarizing my trades, finding a way to survive through simple methods and gradually achieving stable profits.
Investment is never about competing with others, but rather about self-cultivation. Only by stabilizing one's mindset and seeing through human nature can one unlock the door to profits. Middle Eastern prince Alwaleed once said: 'I have never made small mistakes, but making a mistake can cost billions.' In fact, investing is not afraid of making mistakes; what is feared is the lack of reflection; even more feared is failing to maintain enthusiasm for a decade.
If you are currently at a loss and confused, planning to treat cryptocurrency trading as a second career, you must master the 'simplest MACD strategy.' This is practical experience refined through real battles, and it is recommended to collect and savor it!
1. MACD Indicator: The 'Guiding Light' of Technical Analysis
MACD (Moving Average Convergence Divergence) is known as the 'King of Technical Indicators,' and is displayed by default on almost all trading software, suitable for cryptocurrency, Hong Kong stocks, US stocks, and other markets. Its preset parameters are 12 days, 26 days, and 9 days, and its core is to determine buy and sell points based on changes in trend strength.
1. Composition and Principle of the Indicator
MACD consists of three parts:
MACD Line (DIF, Fast Line): 12-day EMA - 26-day EMA, reflecting the strength of short-term trends.
Signal Line (DEA, Slow Line): The 9-day EMA of the MACD line, lagging behind the fast line and used to confirm trends.
Histogram: MACD line - Signal line, with positive and negative values distinguished by red and green (positive for strong, negative for weak).
The principle is simple: the difference between short-term and long-term moving averages can intuitively reflect trend momentum. When the fast line crosses the slow line and the histogram changes color, it signals potential actions.
2. Core Usage: Crossover and Divergence Strategy
(1) Crossover Strategy: Buy at Golden Cross, Sell at Death Cross
Golden Cross (Bullish Cross): The MACD line (fast line) crosses above the signal line (slow line), and the histogram turns from red to green, from negative to positive — indicating a shift in trend from weak to strong, which is a buy signal.
Death Cross (Bearish Cross): The signal line (slow line) crosses above the MACD line (fast line), and the histogram turns from green to red, from positive to negative — indicating a shift in trend from strong to weak, which is a sell signal.
Small Tip: Observing the histogram is more intuitive — narrowing then changing color indicates a crossover signal. (2) Divergence Strategy: Trend Reversal Warning
Bottom Divergence: Price hits a new low, but the MACD line does not follow suit and instead rises — indicating that the downward trend is losing strength and a rebound is imminent, allowing for low buying.
Top Divergence: Price hits a new high, but the MACD line does not follow suit and instead declines — indicating that the upward trend is exhausted and a pullback is imminent, necessitating profit-taking.
3. Clarification of Common Misconceptions
MACD is not an overbought or oversold indicator (no fixed boundaries) and should be used in conjunction with indicators like KDJ and RSI.
It is an upgraded version of MA: using EMA (Exponential Moving Average) instead of SMA (Simple Moving Average), making it more sensitive to trends.
As a sub-chart indicator, it does not occupy space on the main chart, making analysis clearer.
2. Eight Insights from Ten Years of Practical Experience: Learning is Earning
When the domestic market continues to decline during the day, one can selectively bottom-fish with light positions — foreign investment often drives rebounds at 21:30; don't chase after a spike during the day, as there is a high probability of a pullback at night.
'Pinning' is a strong signal: the deeper the downward pin, the stronger the buy signal; the sharper the upward pin, the clearer the sell signal.
Positive news often leads to a rise before it lands, but it tends to drop after the announcement ('Buy the expectation, sell the fact' never goes out of style).
Cryptocurrencies that are heavily promoted in communities are often traps; the higher the enthusiasm, the easier it is to get cut; conversely, paying attention to neglected targets may yield surprises.
Larger platforms are more reliable (such as BN, OK, BG), while smaller platforms are harder to protect (the recent Dexx incident serves as a lesson); projects without authoritative endorsements on non-mainstream exchanges often exploit investors.
Heavy positions can easily become 'watching targets', greatly increasing the risk of liquidation; after stopping losses on short positions, the market often drops, so don't fight against the trend (refer to the TRB case).
Cryptocurrencies that friends are not interested in may actually surge; if hesitating, you can try with a small position.
Specialization is better than generalization: mastering one strategy (like MACD crossover) is easier to profit from than learning multiple techniques.
Even the most experienced fisherman would not go out to sea in stormy weather but would safeguard the boat and wait for a sunny day. Opportunities in the cryptocurrency world are always present; the key is to stabilize one's mindset and maintain discipline. I am Yan An, sharing my fishing techniques with you; follow me to find rhythm in the fluctuations and move towards profitability!
