Over the years of cryptocurrency trading, the most painful pitfall I've fallen into wasn't misjudging the direction of price fluctuations, but rather falling for "cycles." It wasn't until I used the "three-cycle survival method" to repeatedly avoid plunges and capitalize on major uptrends that I truly understood: operating solely on a single cycle is like walking with one eye closed; falling is inevitable.
When I first started trading, my mind was obsessed with making a quick buck. I'd spend every day poring over 15-minute candlestick charts, trading them repeatedly. I'd chase any upswings and run when they dropped, believing my quick reactions would allow me to master the market. But then a sudden, major market move occurred, and the candlesticks reversed. Before I even hit my stop-loss button, my position was deeply trapped, and my account was wiped out by half. The feeling of staring blankly at the screen, doubting my understanding of the market, still lingers in my mind—that's the price of focusing solely on the short term, seeing only fluctuations, not trends.
Later, during an offline discussion, a veteran cryptocurrency trader who had been trading for ten years patted me on the shoulder and said, "If you only focus on the 15-minute chart, it's like trying to find the forest by feeling for a leaf. The market has big trends, medium-term fluctuations, and small swings. You have to look at these three cycles together to know when to enter, wait, or run."
After that day, I began to force myself to abandon my obsession with "quick in, quick out" and focus on studying multi-cycle linkages. I gradually discovered that the "false breakouts" and "bull traps" that had previously tripped me up were completely invisible from a multi-cycle perspective; and the major uptrends that could double my profits had already given clear signals in the macro-cycles. Today, I'm sharing this "three-cycle survival method" that has saved me countless times. I'm not showing off my skills, but simply hoping that you can avoid the detours I took and avoid paying unnecessary "market tuition fees."
1. Core Logic: Look at the forest first, then find the trees
The essence of the three-cycle linkage is to use "large cycles to determine direction, medium cycles to find positions, and small cycles to seize opportunities," filtering out noise layer by layer to ensure that each operation is supported, rather than relying on intuition to bet on ups and downs. Specifically for the K-line cycle, I chose 4 hours (large) → 1 hour (medium) → 15 minutes (small). The time span of these three cycles can not only cover trends but also accurately capture entry points, making it suitable for most retail investors.
Second and third steps: From judgment to operation, each step has clear standards.
Step 1: 4-Hour K-line - Determine the direction and be a "trend follower"
The 4-hour chart is the market's "compass," helping you filter out the noise of short-term fluctuations like 15-minute and 1-hour fluctuations and clearly see the current trend. The criteria for judging are simple: look at the highs and lows and the overall trend:
An upward trend: The lows are repeatedly higher (later lows > previous lows), and the highs are repeatedly broken (later highs > previous highs). Even a short-term pullback during this period is merely an opportunity to get on board; don't be scared off by minor fluctuations.
Downward trend: The highs are lower (later highs are lower than previous highs), and the lows are also lower (later lows are lower than previous lows). At this time, even the strongest rebound is likely a "buy trap." Don't think about buying at the bottom, as you may find yourself halfway up the mountain.
Sideways trading: Prices fluctuate within a fixed range, neither breaking through previous highs nor falling below previous lows. Frequent trading in this market will only lead to continuous fees, and ultimately, your profits will not cover your losses. It is better to wait patiently for a clear direction.
Remember one key motto: Going with the trend is fundamental to survival; going against the trend is like stepping into a trap. If you don't see the direction correctly in the 4-hour period, all the precise operations afterwards will be in vain.
Step 2: 1-Hour K-line - Find the area and set the "buy and sell range"
After the 4-hour direction is clear, use the 1-hour chart to find the "support level" and "resistance level" to determine the approximate buying and selling range to avoid chasing highs and selling lows.
Finding support levels: Focus on three key areas: the previous trend line (connecting the lows of an uptrend or the highs of a downtrend), key moving averages (such as MA20 and MA60, which often provide support when prices retrace), and previous lows (lows that haven't been broken multiple times before, which are likely to be market consensus support). When the price approaches a support level and aligns with the 4-hour trend, it can be included in the "potential entry zone."
Finding resistance levels: Focus on two key signals: previous highs (highs that haven't been broken through many times before, representing significant resistance) and key resistance zones (e.g., areas with significant volume, where there's a lot of trapped stock, making a breakthrough difficult). If the price hits resistance and a top pattern (such as a double top or shooting star pattern) appears, be decisive in taking profits or reducing your position; don't wait for a trend reversal before regretting it.
The core of this step is "circle range": only consider entering the market near the support level and exiting the market near the resistance level, and avoid the vague middle area.
Step 3: 15-minute K-line – Seize the opportunity and accurately select the “entry and exit points”
The 15-minute chart isn't responsible for determining trends; it's only responsible for accurately identifying entry and exit opportunities based on the "4-hour direction and 1-hour area" approach. When trading, focus on two key factors: candlestick patterns and trading volume.
Look for signals: Look for clear reversal or confirmation signals, such as engulfing patterns (a yang enveloping a yin, a yin enveloping a yang), bottoming/topping divergences (a bottoming divergence occurs when the price hits a new low but the MACD doesn't; a topping divergence occurs when the price hits a new high but the MACD doesn't), and golden/death crosses (a golden cross occurs when the short-term moving average crosses over the long-term moving average, while a death cross occurs when the short-term moving average crosses over the long-term moving average). The appearance of these signals is the "trigger point" for entering or exiting the market.
Check trading volume: This is the most critical verification step. If the above signals appear but trading volume does not increase (for example, trading volume is similar to normal during a breakthrough), it is likely a "false breakout" and you should not rush into trading. Only when the signal and trading volume increase simultaneously (for example, when the entry signal appears, trading volume doubles compared to the previous K-line), does it indicate that real capital is entering the market and the operation success rate is high.
For example, if the 4-hour chart shows an upward trend and the 1-hour chart finds support, then if the 15-minute chart shows a Yang-enclosing Yin pattern and the trading volume increases, it is an excellent entry point. Conversely, if the 15-minute chart shows a top divergence and the trading volume shrinks, it is a take-profit signal.
3. 4 principles to remember: Discipline is more important than steps
The cycles are not conflicting: If the 4-hour chart is trending upwards but the 1-hour chart is trending downwards, or if the 15-minute chart is trending in the opposite direction of the 4-hour chart, don't hesitate and wait and see. The more consistent the cycles, the safer the operation.
Stop-loss orders must be set for short-term cycles: 15-minute operations are characterized by high volatility and risk. A stop-loss order must be set after entering the market (for example, 2-3 pips below the support level, or below the previous low). Once the price breaks below the support level, exit the market immediately. Don't rely on luck.
All three elements are essential: "4-hour direction, 1-hour area, and 15-minute signal" must all be met simultaneously. If any one is missing, no action will be taken. Even if you miss the opportunity, it's better than being trapped by the mistake.
Don't chase the "perfect spot": The purpose of multi-period linkage is to "increase your winning rate," not to find the perfect "lowest entry, highest exit" point. Just catching the signal in the right trend and area is enough. Being too greedy will only lead to missing out on the market.
Finally, I'd like to remind you: in the cryptocurrency market, "slow" is safer than "fast," and "steady" is more sustainable than "greedy." The three-cycle linkage isn't about increasing your trading frequency, but rather about providing an extra layer of assurance and reducing impulsiveness amidst chaotic fluctuations. The market is never short of opportunities; what's lacking is those who can survive until they present themselves. I hope this method can help you save money and earn more stable income.
