In order to help more novices who have just entered the cryptocurrency circle avoid repeating the mistakes I made, I have specially compiled a guide for novices to speculate in cryptocurrency. I hope it can help novices master some rules and principles of cryptocurrency speculation, avoid some detours and traps, and speed up the realization of stable profits.
1,000 yuan in the currency circle is about 140u!
The best solution is recommended: Contract
Use 30 U at a time to gamble on hot coins, setting stop-loss and take-profit targets. 100 to 200, 200 to 400, 400 to 800. Remember, this can only happen three times! Because the cryptocurrency world requires a bit of luck, it's easy to win nine times with this all-in bet and bust once! If you can get through three levels with 100, your principal will reach 1100 U!
It is recommended to use a triple strategy at this time
Make two types of orders a day, ultra-short orders and strategic orders, and then go for trend orders if the opportunity arises.
Ultra-short orders are used for quick attacks and quick attacks. Advantages of 15-minute orders: high returns Disadvantages: high risks
Only do big pancakes at the level of the concubine
The second type of order is the strategic order, which is to use a small position, such as 10 times 15u, to trade at the four-hour level. The profit is saved and then invested in the big pie every week.
The third type is trend trading. For medium and long-term trading, go directly to the market when you see the trend. Advantages: more profit
Find the right point and set a relatively cost-effective profit and loss ratio
1. When entering the market, you cannot just look at the "K-line" trend of the cryptocurrency. Especially for short-term trading, you also need to look at the 30-minute K-line. At the same time, the market must stabilize and resonate at this moment before you can start. For example, sometimes you see a K-line with a long upper shadow and feel that there is no chance, but the next day it pulls out a big positive or even a limit up. In fact, if you look at the 30-minute K-line, you will see the mystery.
2. If the trend and order are wrong, it is a mistake to look at it for a second. You must follow the trend and do not disrupt the rising order.
3. If the short-term investment is not in a hot spot or potential hot spot, it is better not to do it.
4. Give up all impulsive entry. Trade your plan, plan your trade.
5. Anyone's views or opinions are for reference only. You should think carefully and analyze them carefully on your own.
6. First lock in the direction and then select a coin. If the direction is right, you will get twice the result with half the effort; if the direction is wrong, you will get half the result with twice the effort.
7. Invest in rising coins. It's a taboo to try to guess the bottom, feeling like a rebound is imminent, followed by a final market shakeout. Stock prices always move toward "minor resistance levels." Investing in rising coins means choosing the direction with the least resistance.
8. After a big win or loss, close your position and re-evaluate the market and yourself. It's never too late to make a move once you've thoroughly understood the reasons for the big gain or loss. Over the years of cryptocurrency trading, I've found that closing your position after a big win or loss is over 90% correct.
Don't panic or be impatient when trading
1. Patience is gold. Don't panic when the market is sideways. When the price seems to be stuck in one place, don't rush in. At this time, patience is your treasure. Because the best is yet to come, and it's worth waiting!
2. Buy it if both volume and price are rising! If you see a coin’s volume and price break through previous levels and then hold steady, it’s like seeing a green light – buy it!
3. Has the leading coin dropped? Here's your chance! Has the leading coin everyone's vying for dropped? Don't be afraid, this is your chance! Seize it, and you might be the next to double your money!
4. Gaps are a sign of strength. If a coin's price suddenly jumps upward, leaving a gap, it's a sign of strength. If the price then pulls back but doesn't break below the gap, watch it continue to soar!
5. Explosive price hikes? Don't be jealous. If you see someone else's coin hitting its daily limit, don't be envious. It could be a game of the major players, so don't be fooled!
6. Hold on to your coins in a bull market, don’t let go. When a bull market comes, hold on to your coins like a life-saving straw! Don’t let go easily, otherwise you may miss a big wave of market trends!
7. The top isn't sharp, it's at least a double top. Don't rush to sell just because the price is rising. The true top won't be that sharp, it'll at least have a double top. Remember this, and you won't sell too early!
8. MACD dips below the 0 axis, signaling a buy point. The MACD indicator is truly remarkable. When its DIF line dips below the 0 axis but doesn't break through, that's the buy point! Remember this mantra for easier trading!
9. 120-day line "Up, buy on dips" If you see a coin's 120-day line showing a bullish pattern and an upward trend, don't hesitate, buy on dips! This has a very high accuracy rate!
10. Consecutive small bullish candlesticks indicate the main force is taking action. If a coin shows a series of small bullish candlesticks, it's like seeing a signal from the main force. They are quietly collecting chips! At this time, you must pay close attention!
Below is a trading strategy with a win rate of over 80%. I spent 2 years, hundreds of days and nights, drawing thousands of charts, and researching and summarizing these top trend continuation chart patterns!
Price action trading, also known as "naked key" trading, is extremely popular among traders. For price action traders, price movements themselves are the primary signals for entering and exiting the market. Price momentum, trends, and volatility influence their trading decisions.
Price action trading is a process of using constantly changing price action data to make buy and sell decisions on a trading chart. Price action trading attempts to use high-probability entry and exit signals to create a favorable risk/reward ratio, resulting in profitable trades where the sum of gains exceeds the sum of losses over time.
Price action trading is the opposite of using opinions, predictions, and emotions to make trading decisions. It's the process of using what's happening in the market to determine whether to buy, sell, or hold a position. Pure price action reveals the current behavior of buyers and sellers on any timeframe. Listening to what's being visually conveyed (signals) on the charts is the art and science of technical analysis.
There are four main dynamics in price action trading:
1. Entry signals based on breakouts, declines, trading ranges, or chart patterns.
2. If you want to enter a trade, your stop loss should be set at a level that the price will find difficult to reach.
3. Trailing stops can help you lock in profits if a profitable trade reverses.
4. When the price reaches the set level, the profit target for maximum return will be locked in.
Price action trading rules create a framework and context for traders to follow, ensuring they pursue profits while avoiding losses or blow-ups.
Here are the five most important price action trading rules every trader should know:
1. Trend line rules
Trendlines are identifiers and connectors of resistance and support in chart patterns.
Trendlines are identifiers of trends within a trading timeframe.
A vertical trend line must be drawn from left to right to identify one of the following trends:
1. The highs are getting higher, indicating an uptrend.
2. Higher lows indicate support in an uptrend.
3. The lows are getting lower and lower, indicating a downtrend.
4. Lower highs indicate resistance in a downtrend.
◐ Trend lines show the path of least resistance.
◐ After the trend line is broken, new extreme situations will be generated.
◐ A trend line breakout may signal a reversal of the current trend direction deviation.
A trendline breakout can also signal a correction in the current trend or the start of a new trend.
2. Trading range rules
A range-bound chart has a clear support level where bulls enter the market, so prices generally don't fall below it. A range-bound chart also has a clear resistance level where buyers don't enter the market, so prices generally don't break through it. A range-bound chart begins to trend when prices break through resistance or support and begin to move away from the established price range. Buying at support or selling at resistance on a range-bound chart can be profitable.
◐ Price action ranges show “crowding” between buyers and sellers.
◐ Most breakouts fail the first few times.
◐ Most breakouts retrace to the previous range before continuing in the breakout direction.
◐ Buy low, sell high.
3. High Probability Setting Rules
In price action trading, "high-probability setups" adhere to key principles and strategies to increase the probability of successful trades. These setups typically rely on observation of market behavior and technical analysis. High-probability entry points are based on the quality of the current signal, meaning they are entered when the probability of one scenario occurring is higher than another.
For example, buying a pullback in an uptrend or a rebound in a downtrend. Entering into a range after a failed breakout, which signals a pullback to previous resistance or support levels. Entering into an extremely oversold or overbought level, moving towards the extremes of the 20-day moving average. Finally, a breakout of the range, signaling a new trend by creating new highs or lows within a specific timeframe.
◐ Second entry point in the direction of the main trend.
◐ Trend breakout failed.
◐ Extreme movement failures of peaks and troughs.
◐ Confirmation of higher highs or lower lows indicates that a trend has begun.
1. Trend identification and following:
Buy on pullbacks: In an uptrend, wait for the price to pull back to a support level and then look for a buy signal.
Sell the bounce: In a downtrend, wait for the price to bounce back to the resistance level and then look for a sell signal.
Confirm the trend: Use moving averages (such as 20-day, 50-day, and 200-day moving averages) to confirm the trend direction.
2. Failed breakout signal:
A failed breakout can be traded when the price breaks through a key support or resistance level but is unable to sustain and returns to the range. This situation indicates that the market has failed to maintain its new direction and is likely to revert to its original trend.
3. Overbought and Oversold Levels:
Use the relative strength index (RSI) or stochastic indicators to identify overbought and oversold conditions. Reversal signals may occur when the market reaches extreme levels. For example, an RSI reading above 70 indicates overbought conditions, while a reading below 30 indicates oversold conditions.
Look for selling opportunities during overbought conditions and buying opportunities during oversold conditions.
4. Key support and resistance levels:
Identify key support and resistance levels on your chart. When price approaches these levels, watch the price action for entry signals.
Use price action like reversal candlestick patterns (e.g., hammer, inverted hammer, bullish engulfing, bearish engulfing) to confirm entries.
5. Range breakout and trend start:
The start of a new trend can be identified when prices break out of a long-term range and form new highs or lows.
Confirm a breakout and then pull back. If the price breaks through a key level and then pulls back and finds support or resistance, this can be a high-probability entry point.
6. Second entry point:
Sometimes the market will give you a second chance to enter the market, such as a pullback or a rebound in the direction of the primary trend. Take advantage of such an opportunity to enter the trade.
When the price revisits a significant support or resistance level, watch the price action for confirmation.
7. Morphological analysis:
Use technical patterns such as head and shoulders, double tops, double bottoms, flags, and wedges to identify high-probability entry points.
These patterns are usually accompanied by specific price behavior and can serve as entry signals.
#4. Don’t go against the trend
The most dangerous rule any trader can break is trading against the trend. When traders find themselves in a position on the wrong side of a trend and don't use stop-loss orders, they can incur large losses, turning small losses into massive ones. Profitable traders ride the trend, and if they trade against the trend after extreme oversold or overbought levels, their position sizes are small enough and their stops are tight enough to exit with manageable losses if they're wrong.
◐ The market does not have to reverse, it can continue to trend.
◐ Picking the bottom and touching the top is a high-risk, low-probability trading strategy.
◐ Regardless of your opinion or forecast, trend lines show the current trend.
◐ Consider going long in a bull market and short in a bear market.
Utilize trend-following strategies, such as looking for buy opportunities during an uptrend when prices pull back to support levels or moving averages, and sell opportunities during a downtrend when prices rebound to resistance levels. Additionally, buy during an uptrend when prices break through key resistance levels, and sell during a downtrend when prices break below key support levels.
You can also use trend-following indicators, such as the Average Directional Index (ADX). An ADX above 20 generally indicates a clear market trend, with higher values indicating a stronger trend. The ADX doesn't distinguish between different trends, but it can be combined with other indicators, such as the MACD (Moving Average Convergence Divergence) and the RSI (Relative Strength Index). A MACD line above the signal line indicates an uptrend, while a MACD line above the signal line indicates a downtrend.
#5. Signal Candlestick Rules
Candlestick patterns that resonate with other technical indicator signals and setups increase the probability of a successful entry. A bullish candlestick crossover with a bullish moving average can confirm a signal. A bearish candlestick pattern with an overbought reversal signal in the RSI can confirm the possibility of a downside move. Candlestick patterns can confirm other technical setups.
◐ Signal candlesticks confirm the momentum setup.
◐ A bullish candlestick can confirm a long signal.
◐ A bearish candlestick can confirm a short signal.
◐ Most strong moves begin with a large candlestick that signals the direction.
In trading, using candlestick patterns like the hammer, engulfing candlestick, morning star, evening star, and shooting star for confirmation is an essential part of technical analysis. These patterns can provide buy or sell signals, helping to improve the accuracy of your trading decisions.
Imagine that during an uptrend, the price forms a hammer candlestick at a key support level, while the RSI indicator is oversold. A buy order could be placed above the high of the hammer candlestick, with a stop-loss placed below the low of the hammer candlestick. Subsequently, if the price breaks above the high of the hammer candlestick, this would confirm a bullish reversal signal and be traded.
Through the above methods and techniques, traders can effectively use candlestick patterns to confirm trading signals and improve the accuracy and success rate of trading decisions.
Technical Summary
If used consistently over the long term and in the right trading context, the five price action trading rules outlined above can significantly improve your trading and become an advantage.
Profitability comes from holding onto trend-following trades that others have abandoned, seizing opportunities that others refuse, and doing what others dare not do. There's no such thing as complete failure in investing, only giving up due to a lack of persistence. The same is true for trading. You might initially favor a direction, but as the market fluctuates, you change your mind. You might initially be bearish, but exit the market due to a slight rise, and instead go long. Ultimately, you miss the downtrend and end up losing money against the trend. Such examples are countless in trading; any success requires persistence.
Becoming a defensive trader is a crucial shift in a novice trader's journey. Many beginners may be tempted by a desire for quick profits, hoping to earn them quickly, even trading with a "get-rich-quick" mentality. However, a more practical and realistic mindset is to maximize the protection of your capital. These two mindsets are incompatible. If you focus solely on quick profits, you're likely to lose your capital even faster.
A rule from the sports arena also applies to trading: The best defense is a good offense. In this context, it means only trading when conditions are favorable and protecting your capital by staying out of the market at other times. A novice trader might get lucky with their first few trades, but these successes won't last, and you should be wary of the "beginner's effect" trap.
Imagine holding a gun. You wouldn't waste a bullet unless you were absolutely certain you'd hit your prey. The same principle applies to trading: conserve your capital and only deliver the killing blow when a truly favorable opportunity presents itself. Maximizing capital preservation is key to success in trading. As long as you manage risk effectively, even if a strong entry signal ultimately leads to a loss, the impact on your capital will be contained within a reasonable range.
Frequently checking charts and constantly monitoring trades can often be detrimental to your trading. As in life, excessive intervention rarely leads to good results. If you constantly try to over-control your trades, it can backfire and cause you more trouble.
Have you ever unconsciously added to your position or exited a trade early because you were too focused on the chart? Looking back, did you feel that you were too impulsive at the time? This unplanned behavior is often one of the reasons why many people lose money.
The easiest way is to set a trading plan and forget about it. This is a principle I often emphasize to new traders, and it's one of the most valuable lessons I've learned myself: the less you interfere with your trading, the better. Simply following your trading plan and letting the trades go as planned is the true wisdom of trading.
The result of the previous transaction should not affect the next transaction. This is an extremely important principle, but many people tend to forget it. They are easily influenced by the results of the previous transaction. However, it is important to understand that each transaction is unique and the transaction is not the same.
Trading results are randomly distributed. Suppose you make 100 trades, and your gains and losses might be similar. However, their distribution is unlikely to be so even. Perhaps five or ten trades in a row are losses. If these losses affect your mindset, then any subsequent profitable opportunities may also be hindered by your emotional state.
It's also important to note that after a profitable trade, overconfidence can have a negative impact on trading, just as fear after a losing trade can. Overconfidence can lead to a greater willingness to take excessive risks, which can have dire long-term consequences. Therefore, maintaining composure during trading and not being swayed by short-term trading results is key to maintaining a stable mindset and achieving long-term success.
Simplify your trading and you will gain more
In trading, moderation is key. Many traders make the mistake of overdoing things. They overanalyze the market, overinterpret market trends, overthink, and overcommit, generally doing more than necessary. As a trader, it's equally important to cultivate a healthy dose of laziness.
First, it's important to understand that favorable market signals over a given period are limited, if not rare. Most of what you see and hear is likely just "market interference," noise that's of no use to you. Learning to filter these signals and then identify the "high-quality signals" that are truly beneficial to you is a common step in identifying opportunities.
Secondly, I suggest you learn to trade like a hedge fund trader. They manage millions, even hundreds of millions, of dollars, yet they are incredibly principled, selecting only the highest-return opportunities, like picking diamonds from sand. It's best to avoid specious signals like "maybe" or "seem." In my more than 20 years of trading experience, the best trades are always the most obvious and intuitive.
Have a clear exit plan before entering the market
In trading, no one tells you what to do. You have to make your own rules, which means you are responsible for your own actions. Many people lack this self-control and often lose their trading direction.
One of the most important tasks before trading is establishing an exit plan. It took me several years to realize that exiting a trade is even more important than entering one. I've observed that many people exit a trade impulsively, resulting in either small profits or large losses. Establishing a strict stop-loss and take-profit plan is the best approach. This plan provides clear guidance, allowing you to remain calm and execute your plan regardless of whether you're making a profit or a loss. This disciplined exit plan helps ensure a clear mindset during trading, reducing the influence of impulsiveness and emotion on your decision-making.
Avoid worthless transactions
In the world of trading, worthless trades are those where the risk and reward are disproportionate. These often occur when traders blindly and frequently trade. These types of trades often result in losses that outweigh gains, affecting traders' mentality and even trapping them in a vicious cycle of losses.
Specifically, traders, faced with volatile markets, rush into the market eagerly upon seeing so-called "opportunities," without considering the potential profits and risks. Such blind traders often rely on a lucky break, believing even a small profit is a win. They ignore the significant risks associated with small profits and even view any market as an opportunity not to be missed, subjectively magnifying even small opportunities and impulsively trading. This attitude not only demonstrates contempt and disrespect for the market but also makes it difficult to achieve successful results.
Professional traders typically plan their trades and set stop-loss orders to ensure that even losses are minimal. However, losses from worthless trades are different because these traders have a shallow understanding of the market and make haphazard, unforeseen trading decisions. These avoidable losses can be more detrimental to a trader's growth than helpful.
Highly disciplined
High levels of discipline play a crucial role in financial market trading. It refers to traders adhering to a set of clear rules and principles when conducting trades to ensure effective risk management, achieve investment goals, and avoid the adverse consequences of emotional and arbitrary decision-making. Discipline is directly related to trading success and is considered one of the key factors in successful trading.
I insist on not letting emotions interfere with my trading decisions. I only spend half an hour looking at the charts every day, deliberately avoiding indulging in excessive observation.
The market fluctuates. I recommend that traders stick to their trading plans.
Avoid over-analyzing the market, as disciplined execution is the cornerstone of stable profitability. By following a predetermined plan, I am able to remain calm and avoid emotional decision-making, thereby improving the efficiency and stability of my trading.
Most of the time, you should be away from the trading table. A wise strategy is to keep your distance from the market. Overtrading is often a shortcut to losing money. It is important to remember this!
I only do real trading. The team still has positions to fill. $BTC $ETH
