Don't be confused by those flashy and seemingly profound indicators anymore! In the cryptocurrency world, filled with opportunities and traps, the tools that can truly make you a fortune are simple enough to make those addicted to complex analysis feel ashamed.
Back in the day, when I first entered the cryptocurrency circle, I was like a headless fly, staring blankly at the candlestick chart. A slight change in the MACD indicator would make my heart race; if the RSI indicator showed overbought, I would get nervous and my palms would sweat. And the result? After two whole years, not only did I lose all the savings I had scrimped and saved from hard work, but I also fell into debt. Every time I passed by the small shop downstairs, the owner's gaze was full of sympathy, as if saying, 'This guy is done for.'
However, fortunes can turn. Now, I have purchased a 300-square-meter riverside apartment near the Bund in Shanghai, standing by the window, enjoying the beautiful view of the Huangpu River. You might think I have mastered some profound trading theory, but that's not the case! What I rely on are four extremely simple technical indicators, coupled with several ruthless tricks summarized from real-world practice. Today, I boldly state: even if you are a complete beginner who has just downloaded a trading app, after reading this article, you too can harvest profits in the cryptocurrency circle like a scythe-wielding hunter.
One, SAR indicator: the winning weapon for beginners, buy and sell signals are clear at a glance.
Some people always think that the more complex the indicator, the more powerful it is, which is simply nonsense! The SAR indicator is the hidden trading master among the masses. It acts like a loyal little follower, closely trailing the price of the currency. When the price is above the SAR point, it indicates that the market is in an uptrend; when the price is below the SAR point, it means the market is in a downtrend. If you can't learn something as simple and understandable as this in five minutes, I advise you to stay away from the cryptocurrency circle as soon as possible.
Using the SAR indicator to judge the bullish and bearish trends is much more reliable than the MACD indicator. When the price is above the SAR point (the SAR point is below the candlestick supporting it), it indicates a bull-dominated market. If you dare to sell easily at this time, it's simply irrational! Even if there is a pullback in between, as long as the price does not break below the SAR point, hold firmly. Take the example of Dogecoin skyrocketing from $0.05 to $0.70 in 2022; the SAR point acted like a solid foundation, steadily supporting the price below the candlestick. I made more than $500,000 by adhering to the principle of 'never sell unless the SAR point breaks'. That's enough to buy a Mercedes-Benz E-Class sedan.
Once the price breaks below the SAR point (the SAR point jumps above the candlestick), it indicates that the bears are gaining strength, and at this moment, you must sell decisively without a second of hesitation! Last year, when Bitcoin plummeted from $65,000 to $30,000, when the SAR point flipped above around $55,000, I sold everything without hesitation, successfully avoiding the subsequent halving market.
Remember these two key angle signals, which can help you avoid many detours. When the angle of the SAR point tilts upward beyond 45 degrees, it indicates a very strong uptrend; selling at this point is equivalent to giving away the profits you've earned. In 2023, when BNB rose from $200 to $600, the SAR point was almost vertically ascending. Anyone who sold at that time surely regrets it. Conversely, when the SAR point tilts downward beyond 45 degrees, it indicates a very intense downtrend; at this point, trying to catch the bottom is like seeking death. During the collapse of FTT in 2022, the SAR point's angle approached 90 degrees, and those blindly trying to catch the bottom are probably still struggling in the abyss.
However, it should be noted that the SAR indicator performs poorly in volatile markets (the SAR point jumps back and forth), and blindly operating at this time is just giving money to the market. You must patiently wait for the trend to become clear before entering, because the SAR indicator is best at capturing major trends; let it stand aside during volatile markets!
Two, support and resistance levels: understanding these two key points can easily double your profits.
Many people get tangled up when trading currencies, always wondering when to sell and when to buy. The problem is actually very simple; the key lies in support and resistance levels. The support level is the price level where the price struggles to continue falling when it declines; the resistance level is the price level where the price encounters resistance and struggles to continue rising.
Moreover, support and resistance levels can transform into each other. Once a support level is effectively broken, it becomes a resistance level; conversely, once a resistance level is broken, it becomes a new support level. For example, if a coin repeatedly fails to succeed near the 8,000 yuan mark, that is a resistance level. Later, after the price breaks below the 7,000 yuan support level with significant volume, 7,000 yuan becomes the new resistance level, making it difficult for the price to rise again.
Last year, when I operated XRP, I fully utilized this rule. XRP received support around $0.50 three times, and I boldly bought near $0.50 each time. When the price rose to the $0.60 resistance level, I decisively sold everything. I repeated this three times, easily earning a profit of 70%.
Determining whether the support and resistance levels have been effectively broken is key, and trading volume is the critical indicator. When the resistance level is broken, the volume must be at least twice the usual level for it to be a real breakout, at which point you can boldly increase your position. If there is no increase in volume, it is a false breakout, so run away quickly! This year, when Ethereum broke through $3,000, the volume was more than three times the usual, and I decisively went all in, later the price rose to over $4,000, making a profit of $250,000 easily.
Three, Bollinger Bands: the nemesis of sideways markets, signals of trend changes in advance.
Sideways markets are the most frustrating; when you buy, it drops, and when you sell, it rises, as if the market is deliberately working against you. But the Bollinger Bands indicator can act like a prophet, telling you in advance that a storm is coming. It behaves like a stretchy rubber band; when it narrows to the point of almost sticking together, it means a major change in the market is imminent; when it widens, it signals action.
When the Bollinger Bands narrow to the extreme, with the upper, middle, and lower bands nearly overlapping, it indicates that both sides have reached a balance of power, and a major battle is about to break out. At this time, do not use leverage or frequently engage in short-term trading, as fees may cause you to lose everything. Patiently wait for the price to break upwards or downwards; the larger the breakout, the more fierce the subsequent market will be. In 2023, after Litecoin traded sideways for two months, the Bollinger Bands suddenly narrowed, and then the price skyrocketed by 40%. Those who seized the opportunity made a fortune, while those who missed it could only pound their chests in regret.
When the Bollinger Bands widen, you need to decide whether to go long or short based on the price's position. If the price starts to shrink after widening at a high position, that is a sell signal; if the price is at a low position and the bands widen, with a breakout above the middle band, that is a buy signal. For instance, after Ripple's price dropped by 60% in 2022, the Bollinger Bands began to narrow, then suddenly widened, with the middle band turning upward. I decisively bought in, and later the price rose significantly, yielding substantial profits.
It is important to note that the Bollinger Bands indicator reacts relatively slowly (it only changes after the price has already moved), so do not expect to use it to predict market reversals; its primary function is to help you determine whether the current trend can continue.
Four, volume: the truth about trading volume, a mirror reflecting the market makers' schemes.
Many people only focus on the rise and fall of candlesticks, ignoring the critical factor of trading volume. In fact, 90% of the violent price movements in the cryptocurrency market are determined by volume; many other indicators are often just tools used by market makers to confuse retail investors.
Remember these four phrases, and they can help you avoid many detours in trading:
High volume at high prices means a drop: when the price has surged significantly (for example, more than three times), and suddenly the volume increases dramatically (the bars are much higher than usual), no matter how tempting the candlestick pattern looks, you must sell decisively; otherwise, you'll become a scapegoat for the market makers offloading their positions.
Low volume at low prices means a buy: when the price has dropped significantly (for example, more than 70%), if the volume suddenly increases and the price does not create a new low, it indicates that large funds are quietly entering the market, and you can buy in batches. For instance, when Bitcoin dropped to $16,000 in 2022, I decisively increased my position, and later the price rebounded, earning me more than three times.
No volume increase means a trap: if the price rises but the volume does not change significantly (the bars are still very low), it is likely that market makers are staging a show to lure retail investors into following, and the price will often quickly retreat, making it easy for those who chase to get stuck.
Divergence between price and volume indicates it's time to run: when the price reaches a new high but the volume is lower than the previous high (the bars are shorter), it indicates that buying pressure is weakening, and the market lacks upward momentum. At this point, you should sell quickly to avoid losing profits. In 2021, when Bitcoin surged to $64,000, the volume was much lower than the previous high; shortly after I sold everything, Bitcoin entered a crash mode.
Five, a 'foolproof' trading method that beginners can easily master.
By combining the above tools, a simple and easy trading process is formed:
First, use the SAR indicator to determine the trading direction. When the price is above the SAR point, only take long positions; when the price is below the SAR point, only take short positions, do not hesitate.
Second, use support and resistance levels to find buying and selling points. When the price approaches the support level and the SAR point is below, buy decisively; when the price approaches the resistance level and the SAR point is above, sell decisively. This method is very accurate.
Then, use Bollinger Bands to wait for trading opportunities. In sideways markets, when the Bollinger Bands narrow, patiently wait for the price to break through; in trending markets, when the Bollinger Bands widen, boldly operate along with the trend.
Finally, use volume to verify trading signals. Before buying, always check the trading volume. If there is no increase in volume, give up the trade; if the trading volume increases, enter decisively.
Using this method, I operated on ADA five times last year, each time achieving returns of 20% - 35%, with overall profits more than doubling. Complex indicators only make you hesitant, whereas simple rules allow you to act decisively in trading.
Conclusion: The secret to making money in the cryptocurrency circle is 'simplicity + decisiveness'.
From being liquidated to living in a 300-square-meter riverside apartment, I deeply realized a principle: there are always opportunities to make money in the cryptocurrency circle; what is lacking is a simple and effective method that allows you to execute decisively. Tools like the SAR indicator, support and resistance levels, Bollinger Bands, and volume may seem simple, but they can help you avoid most traps in the cryptocurrency world.
Stop blindly following those so-called 'gods' learning those flashy trading techniques; the methods that can genuinely make you money are often simple and practical. Remember: as long as you can consistently implement simple rules, you can become a profit-maker in the cryptocurrency circle; otherwise, you'll always be the harvested chives! Now, open your market software and start practicing according to these methods!
If you are currently feeling helpless and confused about trading, and want to learn more about the cryptocurrency world and first-hand cutting-edge information, click on my profile and follow me, so you won't be lost again! When you can see the market clearly, you'll have the confidence to operate. Steady profits are far more realistic than fantasizing about getting rich.
