In the cryptocurrency field, full of opportunities and risks, countless people enter with dreams of wealth, but many have met with failure.
As for me, born in '87, I now have a net worth of 20 million. Looking back on my years of ups and downs in the cryptocurrency space, these seven iron rules have been like sturdy crutches, supporting me through thick and thin, successfully navigating bull and bear markets.
1. Precise timing to seize evening trading windows.
In the cryptocurrency space, news and market trends are complex and ever-changing. During the day, various true and false positive and negative news flood the market, causing significant price fluctuations, with prices jumping up and down like wild horses, making them hard to grasp.
In such a chaotic environment, recklessly entering trades is like walking in a fog; it's easy to be misled and fall into a loss trap.
Therefore, I usually wait patiently until after 9 PM to start trading. At this time, market news tends to stabilize, and the K-line trend is no longer disturbed by chaotic short-term fluctuations, becoming clearer, allowing us to judge the true direction of the market more accurately.
For example, through the analysis of multiple cryptocurrencies' trends over different time periods, it was found that after news stabilization in the evening, trading decisions based on K-line patterns had a significantly higher success rate compared to during the day.
2. Secure profits to reasonably plan for profit retention.
In cryptocurrency investing, one must not be overly greedy, always fantasizing that one's assets can double overnight. When we make a profit in trading, we must know to timely secure part of that profit.
For instance, if you earned 1000U from trading that day, I strongly recommend that you immediately withdraw 300U to your bank card.
This 300U is like the spoils of war you captured on the battlefield; first, keep it safe, while the remaining funds can continue to be rolled over in the market.
In the historical trends of the cryptocurrency market, we can see many cases of severe damage due to greed. Some investors, even when their assets have tripled or more, are still not satisfied and are intent on achieving five or ten times returns. As a result, when the market retraces, all previously accumulated profits vanish instantly, and they may even incur losses on their principal.
Therefore, learning to take profits at the right time and reasonably allocate profits is key to surviving and profiting in the cryptocurrency market in the long term.
3. Rely on indicators and avoid subjective speculation in trading.
In cryptocurrency trading, one must never operate blindly based on personal feelings, as that is equivalent to gambling. We need to use professional tools and indicators to aid our decision-making.
Before each trade, be sure to carefully check the following important indicators:
MACD Indicator: Focus on whether a golden cross or death cross appears. A golden cross typically indicates that bullish forces are strengthening, and prices are likely to rise; conversely, a death cross indicates that bearish forces dominate, and prices may fall. For example, in a certain upward trend of Bitcoin, the MACD indicator showed a golden cross, after which the price continued to rise for a period.
RSI Indicator: This indicator is used to determine if the market is overbought or oversold. When the RSI value exceeds 70, the market enters the overbought zone, and prices may face a pullback; when the RSI value is below 30, the market is in an oversold state, and prices may rebound. For example, during a market downturn with Ethereum, the RSI value once fell below 30, after which the price rebounded.
Bollinger Bands Indicator: Pay attention to whether a squeeze or breakout occurs. A squeeze indicates a decrease in market volatility, which may soon lead to significant fluctuations; a price breakout above the upper Bollinger Band usually signals an upward trend, while a breakout below the lower band signals a downward trend. In Litecoin's trend, there have been multiple instances where the price broke above the upper Bollinger Band, starting a new upward trend.
Only when at least two of these three indicators give consistent signals do we consider entering a trade, to improve the accuracy and success rate of our trading decisions.
4. Flexible stop-loss to effectively control investment risks.
Stop-loss is an important line of defense for safeguarding capital in cryptocurrency investing. When we have time to monitor the market, if a trade is already profitable, we can flexibly and manually adjust the stop-loss price upwards. For example, if we buy a cryptocurrency at 1000, when the price rises to 1100, we can raise the stop-loss price to 1050, thus preserving some profits while also controlling losses within a certain range if the market reverses. However, if we are out and cannot monitor the market in real-time, we must set a hard stop-loss, generally setting the stop-loss margin at around 3%. This is because the cryptocurrency market is highly volatile, and sudden crashes can occur at any time. If we do not set a hard stop-loss, our assets could be wiped out instantly in extreme market conditions. Through extensive statistical analysis of trading data, investors who set reasonable stop-loss levels can effectively control losses and maintain stability in their account funds during long-term investments.
5. Regularly withdraw funds to secure your wealth.
In the cryptocurrency space, if the numbers in your account do not translate into real funds, they remain nothing more than an illusion of a numerical game. I have consistently withdrawn 30% of the week's profits to my bank card every Friday without fail, while the remaining funds continue to be used for rolling operations. The advantage of this approach is that over time, not only do we accumulate more operational funds in the account, but we also genuinely secure part of our wealth. From a psychological perspective, regular withdrawals can help us enjoy the results of our investments while boosting confidence in our investments and avoiding blind risks from overly pursuing account numbers. Statistical analysis of my investment data over the years shows that combining regular withdrawals with rolling operations leads to steady growth in account funds while continuously accumulating actual wealth.
6. Skillfully use K-line to gain insights into market rise and fall patterns.
In cryptocurrency investing, K-line charts are an important tool for us to observe market trends. Different trading strategies require attention to K-line charts of different time frames.
Short-term trading: Focus on the 1-hour chart. When the price shows two consecutive bullish candles, it often signals that bullish forces are strengthening, and we can consider going long.
For example, in the short-term trend of Ripple, there were multiple instances where two consecutive bullish candles appeared, and the price continued to rise shortly thereafter.
Dealing with sideways markets: If the market is in a sideways state with small price fluctuations, switching to the 4-hour chart to find support lines is crucial.
When the price drops near a support level, if other bullish signals appear simultaneously, such as a hammer candlestick pattern, we can consider entering a buy position.
Taking Yuzus coin as an example, after a long period of sideways movement, the price fell near the support level on the 4-hour chart and showed a bullish K-line pattern, then the price rebounded and started an upward trend.
7. Avoid traps and stay away from high-risk investment pitfalls.
In the cryptocurrency space, there are some obvious investment traps that we must resolutely avoid.
Control leverage ratio: Although leveraged trading can amplify returns, it also greatly increases risk. Generally, the leverage multiplier should not exceed 10 times, and for novice investors, it is best to keep leverage within 5 times. Excessive leverage can expose us to significant loss risks when the market experiences slight adverse fluctuations. For example, some investors blindly use high leverage in contract trading, resulting in account liquidation and losing everything when the market slightly retraces.
Stay away from high-risk altcoins: Altcoins like Dogecoin and Shitcoin may see significant price increases due to market speculation at certain times, but they lack real value support and often carry the risk of being manipulated by whales. Many investors are attracted by their short-term high returns, blindly following the trend, only to become victims of these manipulations. We should focus our investments on mainstream digital currencies with real application value and strong technical foundations to reduce investment risk.
Finally, I want to share a piece of advice: trading cryptocurrencies is definitely not gambling; we must treat it as a serious job. Follow a set trading plan every day, and after the designated trading time, decisively shut down and return to normal life—eat when it's time to eat, sleep when it's time to sleep.
When we adopt this rational and calm attitude towards cryptocurrency investments, you will be surprised to find that wealth can grow more steadily. If you feel confused in cryptocurrency investing and do not know how to apply these techniques and strategies, feel free to communicate with me, and let’s achieve steady wealth appreciation together in the waves of the cryptocurrency market.
Trading cryptocurrencies is about repeating simple tasks consistently. By persistently using one method over time, you can master it. Trading cryptocurrencies can be like any other industry; practice leads to skill, allowing you to make decisions effortlessly.
This year marks my tenth year in cryptocurrency trading. I started with 10,000 and now support my family through trading! I can say that I have used 80% of the methods and techniques in the market. If you want to make trading your second career to support your family, sometimes listening and observing more can reveal things beyond your current understanding, which can at least save you five years of detours!
