In eight years of trading cryptocurrencies, I lost more than 100 in the early years, but in the following years, I regained several hundred with interest — I have stepped into pits and suffered losses more than most have seen in K-lines. I eventually realized that this market is forever repeating a secret:
90% of traders focus on news, chasing highs and cutting losses; 9% of smart people are busy engaging with manipulators, while the 1% who can earn steadily have already treated the daily moving averages as a 'scalpel' for dissecting the market.
Step One: First verify the identities of the three daily moving averages.
Don't treat daily moving averages as cold, emotionless lines; you must see them as three distinct 'Traditional Chinese Medicine Doctors', each managing different 'ailments' of the market:
5-day line = Emergency Department Director: the most impatient, reacts the fastest, focusing on short-term market 'emergencies' — it will rise first when the price goes up, and turn first when the price goes down, serving as the market's 'first warning signal';
30-day line = Internal Medicine Expert: stable and far-sighted, managing the 'health' of medium-term trends — if the 30-day line continues upward, it indicates that the medium-term market is not deteriorating; once it turns downward, the trend is likely to change;
60-day line = Expert Consultant Traditional Chinese Medicine Doctor: sitting in the 'Tai Shi chair', the calmest, looking at the 'foundation' of long-term trends — when the 60-day line goes up, the long-term market has support; when the 60-day line is breached, it often marks the beginning of a major adjustment.
The actions of these three 'Traditional Chinese Medicine Doctors' hide the life-and-death signals of the market:
When the 'Emergency Department Director' (5-day line) suddenly exerts force, breaking upward through the 'Internal Medicine Expert' (30-day line) and 'Specialist' (60-day line) — this is called a 'Golden Cross', a signal for the market to shift from weak to strong, equivalent to 'a patient moving from ICU to a general ward', allowing preparations to enter the market;
Conversely, if the 'Emergency Department Director' (5-day line) falters, breaking downward through the 30-day line and 60-day line — this is called a 'Death Cross', a warning for the market to shift from strong to weak. Don't hesitate; immediately reduce your position or even liquidate it. Waiting too long may leave you trapped at a high point.
Step Two: Build a trading system using moving averages; don’t let your mind run hot during the market.
Many people lose money trading cryptocurrencies because 'when the market rises, they get overly excited; when it falls, they panic', lacking a fixed method. Building a system with daily moving averages is like putting 'brakes' on operations, avoiding emotional chaos:
The core principle is just one — 'When moving averages clash, ordinary people should retreat'.
If the 5-day line and 30-day line are intertwining and crossing repeatedly, sometimes forming a Golden Cross, sometimes a Death Cross, it indicates that the market is in a 'chaotic period', with no clear winner in the long/short battle. Jumping into the market at this time is no different from blindly rolling dice to guess odd or even; chances are high that you will incur losses.
The real opportunity arises when 'the three moving averages march in formation': whether the 5-day, 30-day, and 60-day lines all move upward together ('bullish arrangement') or downward together ('bearish arrangement'), as long as the direction is consistent, it indicates that the trend has become clear.
For example, in a bullish arrangement, the 5-day line serves as an 'offensive signal' — a price pullback to the 5-day line is a buying opportunity; in a bearish arrangement, the 60-day line serves as a 'retreat signal' — a price rebound to the 60-day line is a time to reduce positions.
Don't think this method is too simple; in the cryptocurrency market, 'volatile fluctuations are the norm; simplicity and effectiveness can be fatal'. Just like martial arts experts duel, they never use flashy moves; breaking through the 5-day line is 'drawing the sword', and the 60-day line turning is 'sheathing the sword'; the more direct, the more effective.
Step Three: Embed discipline into operations, don’t let the plan become 'napkin paper'.
I've seen too many people write trading plans thicker than books, only to tear them up in a panic during a midnight spike and operate chaotically driven by emotions — only to realize later that it wasn't the method that failed, but their inability to maintain discipline.
The most 'cruel' yet 'merciful' aspect of the daily moving average trading method is that it can force you to become an 'emotionless signal execution machine':
When the Golden Cross signal appears, no matter how afraid you are of 'chasing highs', enter the market according to plan;
When the Death Cross signal appears, no matter how reluctant you are to 'cut losses', exit the market according to rules;
Even if the market occasionally 'deceives the lines' (for example, after a false Golden Cross, it drops again), don’t arbitrarily change the rules — being deceived once is okay; following the signals in the long run will surely yield more profits than losses.
A few years ago, I lost more than 100 because 'discipline is thinner than paper'. Clearly seeing the Death Cross but stubbornly holding on, clearly not reaching the signal yet entering the market chaotically; later I managed to recover several hundred, relying on embedding 'trading according to moving average signals' into my bones, so that even if I wake up in the middle of the night to check the market, I only recognize the lines, not the emotions.
Finally, I want to say: The cryptocurrency market is not a 'news market', nor a 'manipulator market', but a 'trend market'. Daily moving averages may seem simple, but they hide the most essential logic of the market — they will not deceive you, nor lead you to greedy excess; they will only tell you in the most straightforward way: when to enter and when to exit.
The money made from trading cryptocurrencies is not 'luck money', but 'discipline money'. By thoroughly understanding the moving averages and maintaining discipline, you can transform from 'the harvested chives' into 'the hunter who earns steadily'.
