When I first entered the crypto world, I was like most people - chasing highs and selling lows, experiencing FOMO, and doubting life after being cut.
It was only after stepping on all the pits that I realized: the ones who make money in the crypto world are always the ones who go against the emotions.
So, I feel that if I really want to continue on the path of trading, I still need to immerse myself in learning. In addition to understanding the basic knowledge, analyzing information, I should also study technical indicators.
This year, 2025, marks my 10th year of trading cryptocurrencies full-time. Last year, I spent a full 11 months doing contracts, growing from 2000u to over 2 million U, achieving a profit of 1000 times!
In the crypto circle, if you want to truly achieve financial freedom and realize compound interest, the methods, techniques, and formation of your own profit system are crucial! Once you learn to master them, the crypto market will be like your 'ATM,' and making money will be as easy as breathing!
After more than 10 years of trading coins, my wealth journey is summarized as follows:
The first ten million took the longest and was the most painful, with the trading system continuously reshaped and polished over a year and a half.
The second ten million took three months.
The third ten million only took 40 days.
The fourth ten million only took 5 days.
75% of the funds were earned in half a year.
Summarized seven iron rules for practical combat (especially the fourth rule, which no one dares to publicly discuss); those who understand will at least avoid five years of detours.
1. A sharp drop does not equal doomsday; a sharp rise does not equal opportunity.
1. 9-Day Crash Rule: If a coin drops for 9 consecutive days, close your eyes and buy the dip on the 10th day. Logic: The extreme of a market maker's washout is 9 days; any further drop is just giving money to those buying the dip.
2. Two days of skyrocketing must reduce positions; money in the coin circle is made by selling, not holding. - If there’s a consecutive rise for 2 days, at least sell half. - If there’s a consecutive rise for 3 days, liquidate and wait for a pullback.
3. 7% mystical single-day surge over 7%, 80% chance of a spike in the next morning. Operation: Run away before noon! Otherwise, you will most likely get stuck.
2. Details that only experts know.
4. “Silent Bomb” (no one dares to speak about this) A coin that has been stagnant for 6 days suddenly surges on the 7th day; follow up immediately.
Logic: This is a signal before the main force starts, the longer it consolidates, the more explosive the breakout.
5. Life-saving principle: If the coin you bought doesn’t earn back the transaction fee the next day, cut it immediately!
Reason: Time cost is the hidden killer; the longer you drag it out, the worse the losses become. #CryptoMarketRebound #USTariffsIncreased.
3. The most profitable secrets.
6. “Three-Five-Seven Law” - The coin ranked third on the rise list has a high probability of breaking into the top five - The fifth coin must break into the top seven. However, 99% of people die waiting to break even, missing the best selling point.
7. “Fifth Day Curse” A coin that has risen for 4 consecutive days must crash at 3 PM on the fifth day!
Logic: This is a fixed routine of quantitative machines, specifically designed to harvest greedy individuals.
4. A final piece of advice: There is no 'sure win' in the crypto circle, only 'probability.'
What you can do is maintain 3% more discipline than others.
(For example, these days, leading followers with AI signal strategies + professional analysis to accurately profit.)
If the above still can't help you, airdrops, hedging, arbitrage, contracts, and holding coins; one of these five models will surely suit you! Allowing you to go from 'lying flat' to 'lying profitably!'
1. Hedge players: Hedging arbitrage – 'Crypto Circle ATM.'
Core Idea: Use the 'fee loopholes' of exchanges to gain profit; essentially, become a 'contract actuary.'
Operation Guide:
1. Choose the right target: Prioritize coins with good liquidity and stable but low fee fluctuations.
2. Cross-exchange hedging: Open a short position on exchanges with a positive funding rate premium while opening a long position on exchanges with a negative premium or low rates to earn the rate difference.
3. Rate harvesting: Collect funding rates at 0:00, 8:00, and 16:00 UTC daily. It is recommended to check 5 minutes in advance to avoid the backlash of rate fluctuations.
2. Airdrop hunters: The art of harvesting wool – from 'freeloaders' to 'airdrop millionaires.'
Core Idea: Exchange time for airdrops, use patience to wait for wealth.
Classic Cases:
• “UNI Airdrop Myth” In 2020, Uniswap airdropped 400 UNI to early users, which at one point was worth over $10,000. Some used 10 wallets to harvest 4000 UNI, achieving 'lying profit.'
• “APT Airdrop Carnival” In 2022, Aptos airdropped APT tokens to testnet users. Some people made tens of thousands of dollars by “squeezing testnet transactions,” earning the title of “the chosen one in the airdrop world.”
Operation Guide:
1. Follow project updates: Join the project's Discord and Telegram groups to get airdrop information as soon as possible. Remember, true airdrops never rely on 'scan the code to enter the group and receive millions,' but depend on 'early participation in the testnet.'
2. Multi-wallet operation: Use 10+ wallet addresses to participate in interactions, such as transferring on the testnet and adding liquidity, etc. But be careful not to be identified by the project as a 'Sybill Attack,' or you may get blacklisted.
3. Record interaction data: Use Excel to keep track of each wallet’s interaction records for easy verification of airdrop qualifications later. After all, the highest realm of airdroping is to 'harvest clearly.'
4. Patience is key: Airdrop distribution may take months or even years. For example, the ENS airdrop took 3 years from testnet to mainnet launch. Therefore, the core skill of airdroping is – to wait.
️ Ultimate Supplement: Airdrop “Pitfall Prevention Guide.”
1. Don't trust 'paid airdrops': True airdrops never charge fees, and anything that requires you to pay to receive an airdrop is 99% a scam.
2. Beware of 'authorization traps': When interacting, do not authorize wallet permissions casually, or you may be hacked and lose your assets.
3. Diversify risk: Don’t put all your hopes in one project; grab a few more airdrops, and one of them will surely break even.
3. High-risk players: New shares and contracts – either get rich or die trying.
Core Idea: Fortune favors the bold; I excel at taking risks.
Thriller Theater:
• “APT New Share Party” Lurks low on new coins on Binance, cashing out after the market makers push the price up, easily earning 2 times. However, if the project team runs away (like the 'Animal Coin' from a certain Turkish exchange), it may go to zero.
• “Contract God” Uses 10x leverage to go long on Bitcoin, earning 100% on a 10% rise, losing all principal on an 8% drop. Yes, he won't wait for it to drop 10% to close your position; this is something to be aware of.
Operation Guide:
• New share strategy: Only participate in IEO projects from major exchanges like Binance and OKX, sell as soon as the market opens, don't linger (this is how the big players operate).
• Contract secrets: Set stop-loss lines (for example, if it drops 5%, force liquidation), but human nature often weakens to 'just wait a bit, it will rebound soon' – and then there’s no 'soon.'
4. Buddhist faction: Hoarding coins and regular investment – as long as I lie flat enough, the market makers can't cut me off.
Core Idea: Buy the coins, uninstall the app, see you in three years.
Classic Cases:
• “480,000 Brother” Bet everything on Bitcoin with the money for buying a house, ended up losing to the mother-in-law, and finally left in tears before the price rebounded, perfectly missing out on a hundredfold increase.
• “Running Wild at 40° North” Saved up over 300 Bitcoins with pocket money by quitting smoking and cutting expenses, ultimately achieving financial freedom at the peak of the bull market.
Operation Guide:
• Regular investment strategy: Regularly buy BTC and ETH at fixed points every week, ignoring fluctuations, and persist for three years. The principle is similar to the 'smile curve' – the harder it drops, the flatter it becomes; the crazier it rises (provided that you can survive until the bull market).
• Currency Selection Criteria: Only hold mainstream coins (BTC accounts for 50%, ETH accounts for 30%), avoid Meme coins like “Dogecoin 2nd Generation” and “Trump Coin,” or you might upgrade from being “Buddhist” to “Supernatural.”
5. Hardcore players: Mining and arbitrage – Can't pay the electricity bill? Then become a 'human VPN'.
Core Idea: Exchange physical effort for returns, and take advantage of price differences.
Wealthy Cases:
• “Ant Miner Boss” Zhao Changpeng started with mining and eventually founded Binance, achieving a class leap from “miner” to “mining boss.”
• “Brick Moving Party” Uses arbitrage from price differences between exchanges, for example, buy APT low on Binance and sell high on Huobi, making a 5% profit in a single day (provided there are no withdrawal delays or platform collapses).
Operation Guide:
• Mining: Either build your own mine (preferably in areas with electricity costs below 0.3 yuan/kWh) or join a mining pool (recommended F2Pool or Binance Mining Pool). Remember: noise from mining rigs is comparable to that of tractors, so prepare noise-canceling headphones before neighbors complain.
• Arbitrage: Requires monitoring 10+ exchanges simultaneously, with hand speed comparable to that of an esports player. An advanced version can use “soft arbitrage” software for automation, but be careful to avoid being flagged as a “bot” and getting banned.
There is a simplest method for trading coins that allows you to maintain 'everlasting profits,' aiming for 30 million! This method achieves an 80% win rate! Indicators that must be known for trading coins 【Moving Average + Narrow Volatility Resonance Strategy】 win rate skyrockets 300%!
Many price action traders are familiar with various candlestick patterns. However, few understand the application of narrow volatility candlesticks. Narrow volatility candlesticks can provide insights into future price action developments, making them important price action signals to study alongside candlestick patterns.
We will study three types of narrow volatility (NR) candlestick patterns. These include NR4 candlesticks, NR7 candlesticks, and NR4/ID candlesticks. All three patterns can provide reliable trading opportunities as they help us capture the next most likely price volatility after a consolidation period.
Introduction to narrow volatility candlesticks.
Essentially, the idea behind narrow volatility candlesticks is that a trend day or multi-day trend typically occurs after a contraction period, which can be easily seen and quantified on the price chart.
Although the original concept of narrow volatility candlesticks is applied to intraday trading strategies, I find their application in swing trading equally useful.
The narrow volatility candlestick strategy is a simple breakout strategy that enters long positions at predefined high points and short positions at predefined low points. These predefined levels are typically the high and low of the narrow volatility candlestick pattern.
The greatest benefit of this strategy lies in its simplicity. Although executing narrow volatility candlestick breakouts is straightforward, they remain highly effective patterns when traded correctly.
The three main variants of the narrow volatility candlestick breakout strategy are NR4 breakout, which involves breaking out from the narrowest candlestick of the most recent four days. The second variant is the NR4/ID setup, which involves breaking out from the narrowest range candlestick of the last four days, which is also the inside bar candlestick.
The last variant of the strategy is the NR7 breakout, which is essentially the same as the NR4 breakout, but in the case of NR7, we will look for a breakout from the narrowest range candlesticks in the past seven days.
In addition to the various narrow volatility patterns, traders can also filter setups in multiple ways to achieve the best results. One filter often used in conjunction with narrow volatility candlestick setups is the trend filter.
Trend filters only allow trades in which the long-term trend is aligned with the direction of the narrow breakout. One of the more effective trend filters that can be used in conjunction with this strategy is the moving average.
We will take a closer look at three different variants on the price chart and discuss a method for filtering and trading these narrow volatility candlestick setups.
Trading NR4 candlesticks.
Narrow volatility 4 (NR4 candlestick) is the narrowest volatility candlestick within the past four trading days. Therefore, the NR4 pattern consists of a total of four candlesticks. The fourth candlestick or the last candlestick in the sequence will have a range smaller than that of each of the previous three candlesticks. Let’s take a look at how the NR4 pattern performs on the price chart.
In the chart above, you can see the price action of the last four candlesticks marked on the chart. If you look closely, you can see that the last candlestick, which is the fourth candlestick, has a range smaller than the first three (candlesticks 1 to 3). Therefore, the fourth candlestick forms the NR4 candlestick and verifies this pattern.
The process of looking for NR4 setups is quite simple. First, you need to check the high and low data of each of the last four candlesticks. This will allow you to calculate the high-low range of each candlestick.
You will then compare today’s range with the range of each of the three previous candlesticks. If you find that today’s range is smaller than that of each of the previous three candlesticks, then this pattern can be marked as an NR4 structure.
With today's computing technology, writing scripts and automating this process is quite easy. Alternatively, you can visit some free pre-programmed narrow volatility indicators to perform this task.
In any case, once you identify the NR4 pattern on the price chart, you can take the next step to further assess and consider trading that setup. At the most basic level, when the price breaks above the high of the NR4 candlestick, a signal to enter a long trade appears. Conversely, when the price drops below the low of the NR4 candlestick, a signal to enter a short trade appears.
NR4 candlestick trading example.
We will create a simple strategy to trade NR4 setups. The rules are as follows:
NR4 candlestick setup rules – (using the daily chart time frame)
Long NR4 trading setup rules.
● The candlestick following the NR4 candlestick must break above the high of the NR4 candlestick.
● The price must be above the 89-period simple moving average at the time of the breakout.
● The buying price is 1 point above the high of the NR4 candlestick.
● Stop-loss is set 1 point below the low of the NR4 candlestick.
● Exit the trade at the close of the third candlestick after the breakout candlestick.
Short NR4 trading setup rules.
● The candlestick following the NR4 candlestick must break below the low of the NR4 candlestick.
● The price must be below the 89-period simple moving average at the time of the breakout.
● Sell 1 point below the low of the NR4 candlestick.
● Stop-loss is set 1 point above the high point of the NR4 candlestick.
● Exit the trade at the close of the third candlestick after the breakout candlestick.
Now that we have the rules for trading NR4 setups, let’s look at a price chart and apply this strategy. The diagram below is the daily chart of the GBP/USD currency pair. You can see five arrows pointing to specific blue candlesticks. These blue candlesticks represent NR4 candlesticks. The light blue line noted on the chart is the 89-period simple moving average.
Now let’s analyze the five NR4 trading signals that occurred on this price chart. Starting from the far left, the first signal occurs when it breaks below the NR4 candlestick. We will exit the position on the third candlestick after the breakout candlestick, resulting in a profitable trade.
The second signal occurs shortly after the price breaks above the 89-period simple moving average. Here, we will wait for the breakout above the high of the NR4 candlestick. We can see that this happens on the following candlestick, which is our signal to go long. We will exit the position on the third candlestick after the breakout candlestick. This will occur when the shooting star pattern forms at the swing high.
The third NR4 trading signal occurs after a brief pullback. Note that the candlestick following this NR4 candlestick breaks above the high and closes near the top of its range. The stop-loss will be set at the low point of the NR4 candlestick and has never been threatened. The exit will be triggered on the third day after the breakout candlestick, which occurs on the day when this candlestick itself is an NR4 candle. This is indicated by the fourth arrow on the chart.
The last NR4 trading setup occurred when the price was far above the 89-period simple moving average. You can see the price breaking above the high of this NR4 candlestick and continuing to rise in the following days. The closing price of the last candlestick on the chart represents the exit point.
Trading NR4/ID candlesticks.
The structure of NR4/ID candlesticks is similar to that of NR4 candlesticks, but it adds a condition that the last candlestick (the fourth candlestick) must also be an inside bar. An inside bar means its high-low range is contained within the range of the previous candlestick. Therefore, when the fourth candlestick in the NR4 candlestick has its high-low range contained within the range of the third candlestick in the structure, this narrow inside bar setup occurs.
Here are examples of the NR4/ID candlestick pattern:
As shown in the figure, the range of the fourth candlestick is smaller than that of each of the first three candlesticks (candlesticks 1-3). Therefore, the fourth candlestick is considered an NR4 candlestick. Additionally, the fourth candlestick is also contained within the range of the third candlestick. Specifically, the high point of the fourth candlestick is lower than that of the third candlestick, and the low point of the fourth candlestick is higher than that of the third candlestick. Thus, we can say that the fourth candlestick is an inside bar pattern. Consequently, this structure is both an NR4 candlestick and an inside bar, making it an NR4/ID candlestick structure.
The process of finding NR4/ID candlestick structures is similar to that of finding NR4 candlestick structures, but it adds one significant condition. This condition is that the fourth candlestick must also be an inside bar.
The basic signal for entering a long trade on the NR4/ID setup is when the price breaks above the high of the NR4/ID candlestick. Conversely, the signal for entering a short trade is when the price breaks below the low of the NR4/ID candlestick.
NR4/ID candlestick trading example.
Here are the simple rules for trading NR4/ID candlestick setups:
NR4/ID candlestick setup rules – (using daily chart time frame)
Long NR4/ID trading setup rules.
● The candlestick following the NR4/ID candlestick must break above the high of the NR4/ID candlestick.
● The price must be above the 89-period simple moving average at the time of the breakout.
● Buy 1 point above the high of the NR4/ID candlestick.
● Stop-loss is set 1 point below the low of the outside bar (this is the candlestick immediately preceding the NR4/ID candlestick).
● Exit the trade at the close of the sixth candlestick after the breakout candlestick.
Short NR4/ID trading setup rules.
● The candlestick following the NR4/ID candlestick must break below the low of the NR4/ID candlestick.
● The price must be below the 89-period simple moving average at the time of the breakout.
● Sell 1 point below the low of the NR4/ID candlestick.
● Stop-loss is set 1 point above the high of the outside bar (this is the candlestick immediately preceding the NR4/ID candlestick).
● Exit the trade at the close of the sixth candlestick after the breakout candlestick.
Now let’s turn our attention to the diagram below, which illustrates how to trade this intraday strategy based on the above rules. This chart is a daily chart of the USD/CHF currency pair. Each of the six blue arrows points to an NR4/ID candlestick. You will notice that on this chart, NR4/ID candlesticks are filled as black candles. The light blue line representing the price action slopes downwards indicates the 89-period simple moving average.
Trading NR7 candlesticks.
The narrow volatility 7 candlestick (NR7 candlestick) is the narrowest volatility candlestick within the past seven trading days. Therefore, the NR7 pattern consists of a total of seven candlesticks. The range of the seventh candlestick, or the last candlestick in the sequence, will be smaller than the range of each of the previous seven candlesticks. Let's take a look at how the NR7 candlestick pattern performs on a price chart.
In this chart example, you will notice that the price action of the last seven candlesticks is circled. Note that the range of the last candlestick (the seventh candlestick) is narrower than that of the previous six. In simple terms, the high-low range of the seventh candlestick is smaller than that of each of candlesticks numbered 1 to 6. Therefore, the seventh candlestick can be marked as an NR7 candlestick, confirming this pattern.
Similar to the process of finding the NR4 pattern, we will also follow the same steps to find the NR7 pattern, with one exception. When evaluating the NR7 pattern, we will look back at the high and low data points of a total of seven candlesticks, rather than only confirming the last four.
As for the entry signal, the NR7 trading setup works the same way as the NR4 setup. That is, when the price breaks above the high of the NR7 candlestick, a long signal appears. When the price breaks below the low of the NR7 candlestick, a short signal appears.
At this point, you may wonder what the actual difference is between trading NR7 and NR4 setups, and why we might choose one over the other. Obviously, because the requirements for NR4 candlesticks are looser than those for NR7 candlesticks, you will see more NR4 setups rather than NR7 setups.
The NR7 candlestick requires a higher degree of price action compression than the NR4 candlestick. Thus, we typically see that the breakouts following NR7 candlesticks are more significant than those following NR4 candlesticks. While this is not always the case, it holds true in most instances.
NR7 candlestick trading example.
Here are the rules for trading NR7 candlestick setups:
NR7 candlestick setup rules – (using daily chart time frame)
Long NR7 trading setup rules.
● The candlestick following the NR7 candlestick must break above the high of the NR7 candlestick.
● The price must be above the 89-period simple moving average at the time of the breakout.
● Buy when the price is 1 point above the high of the NR7 candlestick.
● Stop-loss is set 1 point below the low of the NR7 candlestick.
● Exit the trade at the close of the sixth candlestick after the breakout candlestick.
Short NR7 trading setup rules.
● The candlestick following the NR7 candlestick must break below the low of the NR7 candlestick.
● The price must be below the 89-period simple moving average at the time of the breakout.
● Sell 1 point below the low of the NR7 candlestick.
● Stop-loss is set 1 point above the high of the NR7 candlestick.
● Exit the trade at the close of the sixth candlestick after the breakout candlestick.
Now that we understand the rules for trading NR7 candlestick setups, let’s look at some real examples. The diagram below shows the daily chart of the USD/CAD currency pair. There are a total of six signals on this chart, with the yellow candlestick representing the actual NR7 candlestick. The light blue line at the bottom of the chart represents the 89-period simple moving average, which serves as our trend filter.
Starting from the far left, we can see that the first NR7 candlestick setup will issue a long entry signal on the subsequent candlestick. This will lead to a stop-loss position as the low of the NR7 candlestick is triggered shortly after entry.
Next is the second NR7 candlestick setup, where we will look for a short entry signal after the NR7 candlestick. The subsequent candlestick breaks through, allowing us to enter a short position here. Similarly, this trade resulted in a loss because the price eventually broke through the NR7 candle, triggering our stop-loss. This happened when the price moved from below the 89-period simple moving average to above it.
We can see that the third NR7 setup occurs shortly after the price breaks above the 89-period simple moving average. A long entry signal is triggered when the price subsequently breaks above the high of the NR7 candlestick. We will set the stop-loss below the low of the NR7 candlestick. The exit will trigger at the close of the sixth candlestick after the breakout candlestick. This can be seen in the shooting star candlestick pattern formed before the strong green candlestick.
The fourth NR7 candlestick setup appears on the day after the strong green candlestick mentioned above. Interestingly, the candlestick that breaks above the high of this NR7 candlestick also eventually forms an NR7 candlestick itself. However, at this point, we are already in a long trade and will continue to hold the position until an exit signal occurs, ultimately yielding a profit from this trade.
The last NR7 candlestick pattern is far above the 89-period simple moving average. We can see that the price breaks upwards the next day, triggering our buy entry order. The exit will trigger at the close of the sixth candlestick (i.e., the sixth day) after the breakout candlestick. This is indicated by the last green candlestick on this price chart.
Summary
You should now have a good understanding of volatility contraction and expansion in the market. We have shown you three different candlestick patterns that can help you look for consolidation periods in the market, which may lead to short-term price trends.
You can incorporate narrow volatility candlesticks into your trading in many different ways. We have outlined some simple concepts for trading narrow volatility candlesticks in this article, which should serve as a good starting point for you to expand these ideas and integrate them into your overall trading plan.
I am Ah Peng, having experienced multiple rounds of bull and bear markets, with rich market experience in various financial fields. Here, I will penetrate the fog of information to discover the real market. Grasp more wealth opportunities and discover opportunities that are truly valuable; don't miss out and regret it!
Ah Peng only does real trading; if there are spots in the squad, come and join #加密圆桌讨论 $BTC$ETH.
