In the first three years, I lost over 100, and only in the following years did I gradually earn back a few hundred. Behind every penny is a lesson of blood and tears.
This market is forever repeating the same secret:
90% of retail traders watch news for trading, 9% of smart people watch the movements of the big players, while that 1% of wolf-like players are dissecting market genes using moving averages.
Step 1: Validate the moving averages
Imagine the three moving averages as three veteran Chinese medicine doctors:
The 5-day line is the head of the emergency department, reacting the fastest;
The 30-day line is the internal medicine expert, steady and reliable;
The 60-day line is like the esteemed elder sitting in the expert consultation room.
When the head of the emergency department suddenly rushes over the two senior doctors (the 5-day line crosses above the 30/60-day lines), this is a signal that the market is entering "ICU rescue";
Conversely, if the 5-day line slips underneath and falls from the expert's chair (crosses below the 30/60-day lines), don't hesitate, immediately reduce your position.
Step 2: Establish a system to prevent impulsive decisions
Please stick a note on your trading interface and write:
"When moving averages clash, mortals retreat."
When the 5-day and 30-day moving averages twist around like twisted dough repeatedly, recklessly rushing in at this time is no different from rolling dice.
A true hunter will only decisively pull the trigger when the three moving averages line up in the same direction.
A counterintuitive cold knowledge: In the cryptocurrency world where wild fluctuations are commonplace, the simpler the moving average strategy, the more lethal it is.
Just like experts sparring, there's no need for fifty fancy opening moves - a breakthrough of the 5-day line is like drawing a sword; a turn of the 60-day line is like sheathing it.
Step 3: Weld discipline to the trading platform
Too many people write their trading plans on napkins, and as a result, in the middle of the night, a pinning market occurs, and the napkin is torn into a tool for wiping cold sweat.
The moving average strategy is the most cruel yet also the most merciful - it forces you to become an emotionless execution machine.
There's a dark humor: A trader who stabilized profits for three years using the moving average strategy received a warning of the 5-day line breaking on his wedding day and rushed to the bathroom to close his position before returning to exchange rings. The bride tugged his ear and scolded him on the spot, but after seeing the account balance, silently got him a high-end monitor.
