Today I speak with sincerity, every word is true! I have been trading coins for 10 years, and in the first 3 years, I continuously lost money, with a capital of 300 left to 300,000! It was really painful! My wife and family did not support or understand me! Later, I resigned and put all my thoughts into it! Every day I was busy exploring and summarizing! Now I can finally stabilize my compound interest, and my account has made over 40 million!
I am Xiao Xun
In addition to solid technical skills, I want to share with you the 9 super trading rules I have summarized, hoping to inspire newcomers to the crypto space and help them avoid detours! Grow by standing on the shoulders of giants! If you learn this, you can also achieve a doubling of your investment!
1. Avoid revenge trading
When a trade closes, whether in profit or loss, it is essential to resolutely adhere to the rules. After executing a stop loss, try not to look at it again for 24 hours. This can effectively avoid revenge trading; opening a position with a revengeful mindset can likely exacerbate losses. Some believe that one should get back up from where they fell, but it is more important to remain calm and observe until new entry conditions are triggered. Since traders often look at charts for several hours each day, it is difficult to resist the temptation to open a new position after a stop loss. This is particularly crucial when using leverage for swing trading.
2. Try to avoid trading on weekends
Every weekend, the volatility of cryptocurrency prices increases, and trading volume is low. This makes it difficult to predict short-term price trends. The reason is simple: weekend buy and sell orders are usually smaller, leading to lower market liquidity, which makes it easier for whales to manipulate short-term prices, intensifying the disadvantages of retail traders. Additionally, since the cryptocurrency market operates 24/7, the trading intensity is much higher than that of the stock market, and weekends are a good time to decompress and rest; after all, life is more important than trading.
3. Maintain trading at specific times
As mentioned earlier, the cryptocurrency market operates continuously 24/7, and even full-time traders cannot keep their eyes glued to the screen all the time. To maintain a clear mind, set fixed trading times for yourself. After opening a position during trading hours, set your take-profit and stop-loss, and then you can go do other things. This eliminates the impulse to constantly check your phone or study the K-line, allowing you to trade without affecting your normal life.
4. Do not become emotionally attached to a particular asset.
If you fall in love with the asset you are trading, it can easily lead to poor decision-making. Excellent traders make money through efficiency and rules, giving themselves an advantage, as most people's trading behavior in the market is driven by emotions. 'Be an emotionless trading machine' can ensure decisiveness and principle in trading. Many traders suffer heavy losses because they easily become emotionally attached to certain altcoins, teams, or projects. This is acceptable for medium to long-term investors but can be a potential disaster for short-term traders.
5. Maintain simple trading rules
Traders usually combine various indicators, news, and K-line patterns to try to find suitable convergence points for trading. This itself is not an issue, but it is important to avoid over-analysis, which complicates issues. In fact, when a K-line pattern that fits one's own system appears on the chart, trading can begin. At the same time, it is crucial to set stop-loss limits and control position size; this is particularly important.
6. Trade only with the right mindset
When you feel angry, tired, or stressed about something, do not trade; your mindset will affect your judgment. The key to maintaining a good mindset is to have other daily activities outside of trading. For example, fitness, reading, and spending time with family and friends all help cultivate the right trading philosophy.
7. Keep a trading journal
Keeping a trading journal can be tedious, but it is actually very meaningful, as it helps you avoid making the same mistakes. There are specific reasons behind both profitable and losing trades, and recording trading details is a way to learn and can help you grow quickly.
8. Do not attempt to catch falling knives barehanded
'Catching falling knives barehanded' refers to traders trying to bottom fish in assets that have plummeted. The motivation to bottom fish is usually to lower the cost price and compensate for losses incurred due to a significant drop. Attempting to accurately bottom fish during a sharp decline is unwise. Waiting for stabilization and a rebound, with resistance levels turning into support levels before entering, is a more prudent approach.
9. Do not ignore extreme market conditions
While referencing technical analysis indicators, do not overlook black swan events or other extreme market conditions. Ultimately, the market is driven by supply and demand, and sometimes the market is extremely unbalanced.
Trading is a long-term practice; if you want to make a living from trading, you must adhere to the rules and build your trading system!
So how can you excel at trading coins? Once a person enters the financial market, it is hard to turn back. If you are currently at a loss and still feel confused, but plan to treat trading coins as a second career, you must know the 'simplest MACD strategy.' Understanding and comprehending it can help you avoid many detours; these are all personal experiences and feelings, so I suggest you save it and ponder it repeatedly!
The MACD indicator is the most classic technical indicator among all technical indicators. By correctly using this indicator in conjunction with K-lines (daily K-lines, weekly K-lines), individual stock trends, volume, market trends, and positive or negative news, you can generally achieve better buy and sell results. Below, I will share the most comprehensive uses of the MACD indicator; only those who truly understand can be considered experts. This is just a sharing!
The general assessment criteria for the MACD indicator mainly revolve around the conditions and forms of the fast and slow moving averages (DIF and DEA lines) and the red and green bars (MACD bars). General analysis methods primarily include the positions of DIF and DEA, the cross situations of DIF and DEA, the contraction of red bars, and the form of the MACD chart, focusing on these four major aspects.
I. MACD is the most commonly used indicator by experts.
The MACD indicator plays a very special role in technical analysis and can be said to be an essential part of learning technical analysis. Its importance can be summarized at least in the following points:
The MACD indicator is the most effective technical indicator tested by historical trends and is also the most widely used indicator.
The MACD indicator is derived from the EMA moving average indicator and has a good application effect in grasping trending markets. Trend investors typically refer to this indicator in practice.
The top and bottom divergence of the MACD indicator is recognized as the best method for 'buying low and selling high.' This method is an important tool that concretizes trend theory and wave theory.
Many veterans have had this experience: when first entering the field, they start learning the MACD indicator, then gradually discard it, and after a long period of studying and comparing, especially after practical testing, they ultimately return to the MACD indicator. This reveals the uniqueness of this indicator.
The application of the MACD indicator in quantitative trading is also extremely widespread.
It is precisely because of these advantages that the MACD indicator has become the most commonly used technical indicator among professional traders.
II. The concept and algorithm of the MACD indicator
The MACD indicator, or the Exponential Moving Average Convergence Divergence indicator, was created by Gerald Appel and is used to track price trends and analyze K-line buying and selling timing as a technical analysis tool. This indicator is commonly used in trading software and is known as the 'king of indicators'. As shown in [Figure 1].
The MACD indicator consists of the DIF fast line, DEA slow line, MACD bars, and the zero axis, known as the 'three lines and one axis.' Investors use the intersections, divergences, breakthroughs, support and resistance of these 'three lines and one axis' to analyze prices. The MACD indicator has become
One of the most preferred indicators in many trading software, highlighting its wide application, which indirectly indicates that this indicator is one of the most effective and practical ones tested by history.
Three, the golden cross and death cross of the MACD
The 'golden cross' and 'death cross' patterns are extremely important shapes in technical indicator analysis.
The golden cross pattern, also known as the golden crossover, refers to the shorter-period indicator line crossing upward and through the longer-period indicator line (of the same type), often indicating the emergence of a short-term buying opportunity. If the golden cross pattern appears at
①. After a short-term sharp decline during the downtrend;
②. After a pullback during the upward trend;
③. After a consolidation during the upward trend,
That is, when the golden cross pattern appears at a phase low point, it becomes a more reliable buy signal.
The death cross pattern, also known as the death crossover, refers to the shorter-period indicator line crossing downward through the longer-period indicator line (of the same type), often indicating the emergence of a short-term selling opportunity. If the death cross pattern appears at
①. After a consolidation during the downward trend;
②. After a rebound during an upward trend;
③. After a short-term sharp rise during the upward trend,
That is, when the death cross pattern appears at a phase high point, it becomes a more reliable sell signal.
After understanding the golden cross and death cross patterns, we can specifically look at the golden cross and death cross patterns of the MACD indicator. The appearance of the golden and death crosses in different positions reflects different market meanings.
Situation one: Buy point at a low-level golden cross. If the golden cross of the DIFF line and DEA line appears below the zero axis and far from the zero axis, this golden cross is called a low-level golden cross. At this time, investors can view this golden cross only as a short-term rebound of the price. Whether the K-line can form a true reversal still requires observation and confirmation with other indicators.
As shown in the figure above: On August 27, 2019, the 10-minute K-line chart of BTC showed a low-level golden cross as the price retraced, followed by a rebound of $200. Short-term investors can seize the opportunity to enter.
Situation two: A buy point at a golden cross near the zero axis
If an upward trend has formed, and the golden cross of the DIFF line and DEA line occurs near the zero axis, then this is often an excellent buying opportunity for investors.
This is because after the upward trend is formed, a golden cross near the zero axis indicates that the adjustment has completely ended and a new round of bullish trend has begun. If this is accompanied by a golden cross of the volume line, it indicates that the price rise is supported by trading volume, making the buy signal even more reliable. When this buy point appears, investors should not miss it; otherwise, they will miss a significant bullish trend.
As shown in the figure above: On August 19, 2019, at 09:30, the BTC 5-minute K-line chart shows that Bitcoin broke above the 30-day moving average, indicating that the upward trend has initially formed. For a while after that, the price remained above the 30-day moving average. At 14:00 on August 19, 2019, the MACD indicator formed a golden cross near the zero axis, indicating that the market is about to see a significant upward trend. Investors can decisively buy.
Situation three: Buy point at a high-level golden cross
If the golden cross of the DIFF line and DEA line occurs above the zero axis and is far from the zero axis, then this golden cross is called a high-level golden cross. High-level golden crosses usually appear in
In the consolidation phase during the K-line's upward process, it indicates that the consolidation has ended, and the K-line is about to resume its previous upward trend. Therefore, once a high-level golden cross appears, it is a good signal to increase positions. In practice, when an upward trend is formed, and the K-line rises slowly and continues for a long time, once the MACD indicator forms a high-level golden cross, it often indicates that the K-line is about to accelerate upward. For this reason, high-level golden crosses can also be used for swing trading. Investors can use the MACD indicator to continually hunt for upward wave segments during upward trends.
As shown in the figure above: On June 25, 2019, the BTC 3-hour K-line chart shows that Bitcoin's price is in an upward trend, and after consolidating, it rises again while the MACD indicator shows a high-level golden cross. This indicates that the correction has ended, and the price will continue the previous upward trend. Investors should pay attention to seizing this opportunity to increase their positions.
Situation four: Sell point at a low-level death cross
A low-level death cross refers to a death cross that occurs far below the zero axis. This type of low-level death cross often appears at the end of an upward rebound during a downward trend. Therefore, it serves as a selling signal indicating the end of the rebound. At this point, investors who have been deeply stuck should be cautious and observe. Those who still hold positions that are deeply trapped can sell first and buy back later to reduce costs.
As shown in the figure above: On July 14, 2019, the 3-hour K-line chart of LTC indicated that the MACD indicator showed a low-level golden cross, and the price saw a slight rebound before quickly declining. Shortly after, the MACD indicator formed a death cross below the zero axis, leading to a new round of downward trend in the K-line. Spot investors can sell their positions at the death cross and then buy back to reduce their holding costs.
Situation five: A sell point at a death cross near the zero axis. If the previous market direction has been a downward trend, the cross formed when the DIFF line breaks below the DEA line near the zero axis is called a death cross near the zero axis, indicating that the market has accumulated a lot of downward momentum near the zero axis. The appearance of a death cross signals the release of downward momentum in the market, and the K-line will continue its original downward trend, serving as a sell signal.
As shown in the figure above: On August 12, 2019, the BTC 1-hour K-line chart indicates that the DIFF line of Bitcoin broke below the DEA line near the zero axis, forming a death cross. This indicates that the market's downward momentum is beginning to release, serving as a sell signal. Investors should sell their positions decisively; otherwise, they will be deeply trapped.
Situation six: Sell point at a high-level death cross
The DIFF line breaking below the DEA line at a distance far above the zero axis is called a high-level death cross. This type of death cross pattern is often accompanied by a MACD top divergence. It manifests as the price trend continuously setting new highs during a sustained upward attack, but the MACD indicator's DIF line and DEA line no longer continue to rise or attack, but instead diverge from the price trend, gradually moving downward.
Above the zero axis, when the DIF line crosses down through the DEA line, it forms a downward cross pattern known as a death cross, which is a relatively reliable sell signal.
As shown in the figure above: On August 23, 2019, the TRX 1-hour K-line chart shows that after a wave of increase in the TRON coin, the price continued to set new highs, but the DIF line and DEA line no longer continued to rise, eventually forming a death cross, serving as a sell signal.
Four, the divergence between MACD and K-line
Divergence is a term that describes momentum in physics. In technical analysis, it is a widely used analysis method with a high success rate. In a downward trend, when the price sets a new low, but the indicator line does not reach a new low, it is called bottom divergence, indicating that bullish momentum is accumulating.
This is a buy signal. In an upward trend, when the price sets a new high, but the indicator line does not reach a new high, this is called a top divergence, indicating that downward momentum is accumulating, which is a sell signal;
I. Bottom divergence
Bottom divergence of the MACD bars and DIFF line
The bottom divergence between the DIFF line and the price indicates that during a downward trend, when the price sets a new low, the DIFF line does not create a new low. It shows that the decline of the DIFF line is less than that of the price, indicating that bullish momentum is constantly accumulating, and the price is likely to stop falling, with a high probability of rising in the near future.
The MACD bars are hidden behind the DIFF line, divided into red and green. The divergence between it and the price is an important use of the MACD indicator, widely applied in practice. The bottom divergence between the MACD bars and the price refers to when the price sets new lows repeatedly, but the MACD bars do not follow suit to create new lows. Bullish momentum is accumulating, and the price is about to stop falling, with a greater chance of rising in the near future.
When a bottom divergence occurs, investors can grasp specific buy points in two ways.
Specific buy timing
The bottom divergence of the DIFF line, MACD bars, and price is not a specific point in time but a pattern that appears over a period. However, the specific buying point for investors is a specific moment, indicating that the price is about to stop falling. Therefore, to grasp the specific buying timing, when the DIFF line, MACD bars, and K-line show bottom divergence, investors must combine this bottom divergence with other technical analysis tools to specify the buying point.
First: Color change of the bars or the golden cross of the MACD
When the bars change color, it indicates that bullish momentum has begun to dominate. This generally appears after 'bar shortening'; although it may be delayed, it is more reliable. When a bottom divergence occurs, if the bars change color smoothly or form a golden cross, investors can buy.
As shown in the figure above: On August 26, 2019, the 15-minute K-line chart of Ethereum (ETH) indicates that the price of Ethereum reached a new low during the decline, but the MACD bars did not reach a new low, forming a bottom divergence between the bars and the price. This suggests that bullish momentum is beginning to accumulate in the market, and there is a high probability of a bullish trend in the price afterwards. Shortly after, the bars changed color, and these two sequential buy signals further increased the reliability of the bullish significance, allowing investors to enter during the color change of the bars.
Second: Combine with other technical analysis tools and K-line reversal patterns. For example, combining 'single needle probing bottom' and 'bottom red three soldiers' is a specific application of the principle of 'multi-indicator combination'.
As shown in the figure above: On August 26, 2016, the BTC 30-minute K-line chart shows that the price of Bitcoin set a new low, but the MACD bars did not create a new low, forming a bottom divergence pattern between the bars and the price, indicating that the bullish momentum of the market is continuously strengthening. Accompanied by the price's decline stopping, it formed a buy signal of 'MACD bars and price bottom divergence + K-line single needle probing bottom.' After that, the price experienced a bullish trend.
II. Top divergence
Top divergence of the MACD bars and DIFF line
The top divergence between the MACD bars and the K-line occurs when the price sets a new high during an upward trend while the MACD bars do not reach a new high. This indicates that downward momentum is accumulating in the market, and the price may drop at any time.
The top divergence between the DIFF line and the K-line indicates that during an upward trend, when the price sets a new high, the DIFF line does not reach a new high. This shows that downward momentum is constantly accumulating in the market, and the price is likely to experience a downturn soon. The specific sell timing is similar to the bottom divergence; in practice, based on the principle of multi-indicator combination, investors can use the following methods to make the sell signal more concrete.
First: Color change of the bars or the MACD death cross
After the top divergence between the MACD bars and the K-line forms, if the bars suddenly shorten significantly, it indicates that the market's downward momentum is beginning to release. Investors should pay attention to selling in a timely manner. The color change of the MACD bars indicates that the market's downward momentum has already taken control; this generally appears after the bars continue to shorten. If a top divergence occurs between the bars and the K-line, followed by a color change of the bars or a MACD death cross, investors should pay attention to exit in a timely manner.
As shown in the figure above: On August 9, 2019, the 1-hour K-line chart of HT shows that the price of Huobi reached a new high, but the MACD bars did not create a new high, forming a top divergence pattern between the bars and the price. This indicates that bearish momentum is beginning to accumulate, and the price may experience a downturn at any time. Subsequently, the MACD bars changed from red to green, issuing a 'bars and price top divergence + bars color change' sell signal. Investors should pay attention to exit in a timely manner.
Second: Combine with other technical analysis tools and K-line reversal patterns. After the MACD bars and price top divergence appears, if other technical analysis tools also simultaneously show sell signals, the reliability of the market sell signal will greatly increase; at this time, investors should pay attention to exiting decisively. Common sell signals in this category include 'bars and price top divergence + K-line reversal pattern', etc.
As shown in the figure above: On July 20, 2019, the ETH 3-hour K-line chart shows that Ethereum's price set a new high, but the MACD bars did not create a new high, forming a top divergence pattern between the bars and the price. This indicates that bearish momentum is continuously strengthening, and the price may soon experience a downturn. Subsequently, the MACD bars gradually shortened, while the K-line formed an evening star bearish pattern. Investors should pay attention to timely exit, after which the K-line experienced a significant downward trend.
Five, modifying MACD parameters
The lagging reaction to price changes can sometimes result in less than ideal buy and sell prices, which is a flaw of the MACD indicator. One way to change this situation is to adjust the indicator parameters to make the MACD indicator respond more sensitively to trends, allowing for more ideal buy and sell points. In commonly used trading software, the default parameters for the MACD indicator are 12/26/9. Under such parameter settings, the MACD indicator often shows a significant lag in response to price changes. The lag of the MACD indicator can be resolved by adjusting its parameters. Common parameter combinations include 5/34/5, 5/10/30, etc. Investors can try and explore more in practice.
Evening star: During the upward process of the K-line, a long bullish line appears first, followed by a shorter real body K-line (either bullish or bearish) the next day; people liken it to a star, which is the main part of the K-line combination. The third K-line is a long bearish line that has penetrated deeply into the body of the first K-line. The evening star is a signal that the price has peaked and is about to decline, with some predicting an accuracy rate of over 80%.
In the end, those who have been through the rain always want to hold an umbrella for others. Having experienced days of isolation and helplessness, they empathize with others' losses and want to lend a helping hand, wishing to make up for the regret of once longing to be pulled up, like giving an umbrella to their past selves who were once soaked in the rain.
In the crypto space, achieving financial freedom and class transition requires summarizing ten trading tips. Understanding one can lead to stable profits, which is worth it.
Repetitive learning:
1. Two-way trading: suitable for bull and bear markets. Two-way trading is currently the most common trading method used by Giant Stone Wealth GGtrade, which can adjust dynamically based on the current price.
In the cryptocurrency market, you can invest based on market trends, buying both up and down, and as the year-end approaches, Giant Stone Wealth GGtrade platform has also launched programs.
A series of preferential benefits, such as a 20% increase in investment yield, is undoubtedly a great boon for investors.
2. Coin holding method: Suitable for bull markets and bear markets. The coin holding method is the simplest yet the most challenging approach. It is simplest because it involves buying a certain coin.
Or hold a few coins for six months or more without operating. Basically, the minimum yield is tenfold. However, beginners can easily lose sight of this.
To achieve high returns, or when the coin price is halved, consider switching vehicles or getting out. Many people find it difficult to hold off from trading for a month; if that’s the case, then don’t even try.
It's been a year. So this is actually the most difficult.
3. Bull market chasing the dip method: only suitable for a bull market. Use a portion of idle funds, preferably not exceeding one-fifth of your capital. This method is suitable for coins with market values in
Coins priced between $20 and $100 are preferable, as they won't be trapped for too long. For example, if you buy your first altcoin and it rises by 50% or more, then.
It can be switched to the next coin that experiences a sharp decline, and so on. If you are stuck with your first altcoin, just wait; the bull market will definitely resolve it.
Under the premise that the cryptocurrency must not be too risky, this method is not easy to control, and newcomers need to be cautious.
4. Hourglass exchange method: suitable for bull markets. In a bull market, you can buy almost any coin and it will rise; funds are like a giant hourglass, slowly seeping into each one.
In the crypto market, start with the major coins. There is a clear pattern in price rises: leading coins rise first, such as BTC, ETH, DASH, ETC.
Wait for the rise, then the mainstream coins start to rise, such as LTC, XMR, EOS, NEO, QTUM, etc. Then there are coins that have not yet risen.
Then the price will rise, for example, RDN, XRP, ZEC, etc., and then various small coins will take turns rising. But if Bitcoin rises, then choose the next.
At the level where coins have not yet risen, begin building positions.
5. Pyramid bottom fishing method: suitable for predicting a major crash. Bottom fishing method: place orders to buy 10% of your total position at 80% of the coin price.
Position, placing an order to buy 20% of the coin price at 70%, and 30% of the coin price at 60%.
Buy 40% of the position at 50% of the price.
6. Moving average method: Understand some K-line basics. Set indicator parameters to MA5, MA10, MA20, MA30, MA60, and select the daily line level.
If the current price is above the MA5 and MA10, hold steady. If the MA5 breaks below the MA10, sell the coin; if the MA5 rises above the MA10,
Buy and build positions
7. Aggressive coin holding method: Focus on the coins you are familiar with; it is only suitable for long-term high-quality coins. If you have liquid funds and a certain coin is priced at $8, then place an order.
Place an order to buy at $7, and when the order is successfully executed, place an order to sell at $8.8. Profit will come from holding coins. Take out liquid funds and continue waiting for the next opportunity.
Opportunities. Adjust dynamically according to the current price. If there are three such opportunities in a month, you can accumulate quite a few coins. The formula is based on the cost price.
The buy price equals the current price multiplied by 90%, and the sell price equals the current price multiplied by 110%!
8. ICO aggressive compound interest method: Continuously participate in ICOs, and when the new coin rises by 3-5 times, withdraw the principal and invest in the next ICO.
If profits continue, hold and repeat the process.
9. Cyclical wave method: Look for coins like ETC that are undervalued. When the coin price keeps falling, increase the position, and when it falls again, continue to increase the position, then wait.
If profits continue, sell and repeat the process.
10. Small coin violent play: If you have 10,000 yuan, split it into ten parts and buy ten different types of small coins priced at 3 yuan each.
It's best to buy and hold, not to worry after buying. If it doesn't multiply 3-5 times, don't sell; if it gets stuck, don't sell; just hold on as a long position. If a certain coin multiplies
After three times, withdraw the principal of 1000 yuan and invest in the next small coin. The compounding profits can be impressive!
Looking out at the darkening sky, I turned off the computer. Ten years in the crypto space has taught me not only how to make money but, more importantly, how to navigate the madness.
Maintain rationality in the market. There will always be opportunities in this market; what is lacking is the ability to live to the next bull market.
The ultimate realization of an experienced trader
I. About trading psychology
Human enlightenment requires meticulous thinking, strict constraints, a strong inner self, the cost of making mistakes, and experiencing hardship. Youth must pay a price; fortunately, youth is the greatest capital, allowing one to exchange time for space and tuition for experience. However, high tuition fees make it difficult for many top students to bear, so it is essential to cherish every trading opportunity, as this is the foundation for increasing one's cultivation and enhancing one's realm.
Confidence and patience are essential psychological qualities that successful traders must possess. However, if the initial position is too heavy, one or two mistakes can result in massive losses that severely undermine the trader's confidence. Impatience to recover losses leads to reckless trading, ultimately resulting in elimination from the market. Do not always expect to make a lot of money with a single move; traders must allow themselves to make mistakes and give themselves opportunities and time to correct them. 90% of the time should involve light positions to participate in the market, aiming to improve one's ability to analyze trends through continuous learning and practice.
Continuously practice small volumes of orders to hone your mentality in real gains and losses, enhancing your technical perception of the market's pulse. Only in this way can one continuously improve. Psychological experiments have shown that when profitable, the public tends to become risk-averse, while in loss, they tend to become risk-seeking. This is reflected in market trends: in rising markets, profitable investors continuously trade, while in falling markets, losing investors rarely admit defeat. Thus, to drive away the investing public, the market tends to show slow rises and sudden drops during bull markets, and slow declines and sudden rises during bear markets.
Finally, trading boils down to firmly believing in your own philosophy and repeatedly implementing the patterns you are familiar with, day after day, year after year. The appreciation in your account may not even excite you, but rather provide a simple sense of satisfaction, fulfilling your judgment and allowing you to find the right path after going through many twists and turns. On this journey, you need not have companions, just move forward relentlessly. The super winners in the market often appear to be dull; they exchange the most foolish persistence for the greatest success—this is the power of focus. Those new to the field often feel restless, but with age and experience accumulation, along with self-improvement, the restless mindset can be overcome, otherwise, the market will invite you to seek fortune elsewhere.
I desire high profits, but the lover of high profits is high losses, so one must practice restraint. Not seeking high profits but aiming for a smooth upward capital curve can allow for frequent enjoyment of compound interest. The ultimate goal of trading is, of course, profit, but the process is also crucial. A large fluctuation in the capital curve indicates that the capital will bear significant risks in the future and also makes it difficult to board the compound interest express.
The market's eyes are sharp, and it will ultimately reward those who are patient. The market will take money from those who make reckless trades and give it to those who are good at waiting with a clear mind.
II. About trading methods
The truly useful aspect of trading is the rules, and the rules are established based on one's operational experience and winning habits. It is the trading philosophy that has been developed through countless winning and losing operations, avoiding mistakes while retaining correct actions. According to game theory, trading is a real game, and the characteristics of real games are that as long as one makes fewer mistakes than others, and when mistakes are made, the resulting losses are controllable, one will eventually become a successful trader.
From a causal perspective, every profit and loss in the trading process has a reason, even if the reason for profit or loss is due to misjudgment, randomness, or luck; it is still a reason. Profits or losses after a period of trading also have reasons; for profitable results, one should understand the reasons and reinforce them; for losses, one should investigate the reasons and find ways to mitigate, isolate, or cleverly compromise with them. Traders often cannot contain their curiosity and excitement, leading to impulsive actions, especially newcomers with limited capital. It is advisable not to act lightly; the more one acts, the more mistakes one makes.
Be like a crocodile, rarely striking but when you do, ensure a reward. A crocodile's ability to catch prey is closely related to its prior lurking. Thus, traders must be well-prepared before taking action to minimize unnecessary losses from operational errors. One characteristic of trading is that once you engage a position, all your previous analyses and judgments become irrelevant. The trend is dictated by the market, not by you. The only thing you can control is when to exit. Of course, if you are a super large capital with the power to influence the market, that is another story. In terms of techniques, I place greater emphasis on capital management and trend patterns.
Understanding that losses are a part of trading will free you from the fear of loss. Manage your losses bravely; only when losses exceed pre-set limits will you feel real pressure. Keeping losses within a reasonable range is a symbol of trading ability; over time, this will strengthen the trader's confidence. Those who maintain self-discipline and actively control risk will ultimately be rewarded many times over by the market.
Diligently execute your trading system to achieve operational consistency. This is a fundamental guideline for coping with the chaotic changes in the market. With this guideline, you can remain calm during significant events, allowing for informed decisions on entry and exit. By adhering to this approach over the long term, you may gradually transform into an excellent trader without realizing it. Among those who achieve long-term profitability in the market, many are skilled experts and professionals. A thought-provoking issue is that there is a widely recognized phenomenon in futures and stocks: the accuracy of ordinary traders' market assessments is not inferior to that of experts and professionals, creating a paradox in trading. This illustrates that the real effort is often outside the obvious.
The core determinant of trading profits and losses is not necessarily technical analysis; at least the core determining factor is not technical analysis. Full position trading is equivalent to a do-or-die situation; even if it is in line with the trend, it is equivalent to going against the trend because they cannot withstand the slightest turbulence. Any fluctuation in the market can generate disaster for them.
Hello everyone, I am Xiao Xun $BTC $ETH