In the crypto world, navigating through trials and tribulations, your trading strategy is your 'secret weapon'. The following phrases are the crystallization of practical experience, be sure to save them!
Entry Stage: Testing the waters in the crypto world, preparing to proceed; steadily entering the market, refusing to rush in.
Consolidation Stage: Low-level consolidation creates new lows, it's the right time to buy heavily; high-level consolidation peaks, decisively sell without hesitation.
Volatility Stage: Sell at peaks, rush in during dips; observe during consolidation, reduce trading. Consolidation means sideways movement instead of decline, hold tight to your assets, and a surge might happen in the next second; during rapid surges, beware of sudden drops, always be ready to secure profits; slow declines are a great opportunity to gradually replenish your positions.
Timing for buying and selling: Do not chase highs, do not buy during plunges; do not trade during consolidation. Buy on bearish candles, sell on bullish candles; only reverse operations can stand out. Buy during a significant morning drop and sell during a significant morning rise; do not chase highs during an afternoon surge, and buy the next day during an afternoon drop; do not cut losses during a morning drop; if the price neither rises nor falls, rest; average down to seek breakeven; excessive greed is not advisable.
Risk Awareness Section: Calm lakes may rise high waves; there may be great tides afterward; after significant rises, there must be corrections, with K-lines showing triangles for several days. In an upward trend, look for support; in a downward trend, look for resistance. Full-position trading is a big taboo; stubbornness is not feasible. Be aware of the impermanence and know when to stop, seizing opportunities to enter and exit.
Trading cryptocurrencies is essentially trading mindset; greed and fear are major enemies. Be cautious when chasing highs and cutting losses; a calm mind leads to freedom.
In addition to the mnemonic, I have also organized several practical trading methods, benefiting both beginners and seasoned players.
Oscillation trading method: Most market conditions are in oscillation patterns, utilizing high selling and low buying between ranges is the foundation for stable profits. Utilize the BOLL indicator.
And box theory, combining technical indicators and charts to identify resistance and support. Follow short-term trading principles, and avoid greed.
Breakout trading method*: After prolonged consolidation, the market will choose a direction. Following the breakout can yield quick profits. However, precise breakout timing is required.
Unidirectional trend trading method*: After the market breaks out of the range, it will form a unidirectional trend; trading in the direction of the trend is key to profit. Enter trades during retracements or rebounds, referring to K-lines, moving averages, BOLL, trend lines, etc. Proficient use will allow you to navigate smoothly.
Resistance and support trading method*: When the market encounters key resistance and support levels, it often faces obstacles or gains support. Entering trades at this time is a common strategy.
Utilize trend lines, moving averages, Bollinger Bands, parabolic indicators, etc., to accurately determine resistance and support levels.
Retracement rebound trading method: After significant rises or falls, there will be a brief retracement or rebound. Seize the opportunity to profit easily. The main basis for judgment is the K-line pattern, and good market feel can help you accurately grasp highs and lows.
Time period trading method: Morning and afternoon trading has small fluctuations, suitable for conservative investors. Although the time to profit from trades is long, it excels in market ease of grasp. Evening and early morning trading has large fluctuations, suitable for aggressive investors. Quick profits are possible but with high difficulty and strict requirements for technical and judgment abilities.
Trend follower secret technique: Lock in tenfold opportunities over ten years.
Focus on long-term trends' wealth password:
Halving cycle layout: 180 days before Bitcoin's halving, preemptively allocate BTC, BCH, and other halving coins, holding until 30 days after the halving.
Leading supplementary increase law: When the market leader coin rises by 200%, prioritize selecting second-tier coins in the same sector that have not risen by 50%.
Technical triple verification: Weekly MACD golden cross + daily breakout from the box + hourly large volume bullish engulfing, forming a golden buying point.
Institutional Position Analysis: Glassnode data shows that when large addresses continue to increase their holdings, combined with a surge in on-chain trading volume, it serves as a signal to start.
Bear Market Investment Strategy: Invest a fixed 10% of the principal monthly, choosing blue-chip coins like BTC and ETH. After 12 months of continuous investment, the return exceeds 300%.
Risk Warning: The above strategies need to be adjusted according to real-time market conditions. It is recommended that beginners first verify with a simulation account, with a single trade loss not exceeding 2% of the total funds. The market has risks, and investment requires caution.
1. Introduction
At this stage, you may have already mastered knowledge of numerous chart patterns, such as double bottom formations, ascending triangle structures, and inverse head and shoulders patterns, as shown in the figure below.
However, as you understand, not all chart patterns will consistently perform effectively. In this case, what measures should you take when these chart patterns fail to deliver the expected results? As shown in the figure below.
When the scope of involvement expands further, how will you take action? As shown in the figure below.
At that time, what kind of trading activities do you plan to engage in on the market? As shown in the figure below.
It is precisely at this moment that the triple bottom formation reveals its unique application value, as shown in the figure below.
The triple bottom pattern is one of the relatively rare chart formations in today's market; however, it remains an indispensable tool in the trader's toolbox amid market volatility.
In this guide, you will learn the following:
(1) A detailed guide to the operational mechanism of the triple bottom pattern.
(2) How to avoid misjudging the triple bottom formation (and the appropriate measures to take in such circumstances).
(3) Correct methods for trading and analyzing the triple bottom formation.
(4) A step-by-step procedure on how to accurately define and execute triple bottom trades.
2. What is a triple bottom and the truth about how it works.
The triple bottom pattern is like a talented superstar, taking the market stage with its unique talent. It begins at the neck line, which is the support of the entire structure, as shown in the figure below.
Subsequently, amidst the dazzling and complex performances presented by the market, three bottoms emerge sequentially, each playing an indispensable role in this captivating formation, as shown in the figure below.
This is like a carefully choreographed synchronized dance, becoming the focus due to its eye-catching nature and laying the foundation for potential trading opportunities; this pattern is indeed easy to identify.
Now that you understand the appearance of this pattern, how is the triple bottom pattern formed? If you are pondering this question, you are heading in the right direction because understanding 'why' things happen is often more crucial than merely knowing 'what' happens.
In this guide, we primarily explore the following three reasons that lead to the formation of the triple bottom pattern.
(1) The market's indecisiveness.
Imagine the market as a capricious individual whose decision-making process is indecisive, similar to a friend who can never decide where to go for dinner or what movie to watch. Thus, the triple bottom pattern emerges from the instability caused by market indecision, as shown in the figure below.
Just as the market seems to say: I cannot decide which path to choose, have you observed how the price range in the above example continues to expand? It is like a paused moment of confusion, yet it provides traders like us an opportunity to capitalize on the upcoming market decisions. Therefore, essentially, we are discussing that the triple bottom formation is a direct product of market indecision.
(2) Development takes time.
This pattern tends to develop gradually with its unique rhythm, making it akin to a carefully slow-cooked delicacy, and the waiting process is worthwhile, much like watching a suspense movie, where well-informed viewers can foresee the climax of the plot. The market is testing your patience, teasing you with its delicate fluctuations. For those willing to patiently wait and observe closely, the triple bottom formation offers an opportunity that may lead to substantial profits. Therefore, remain calm and let this pattern reveal its enticing trading opportunities in due time. In fact, to further illustrate this principle, you can effectively utilize the triple bottom pattern when the following situations arise.
(3) You missed the double bottom formation.
If you missed the double bottom pattern, as shown in the figure below.
You need not toss and turn in regret, for the triple bottom pattern can now turn the tide, providing you once again with an opportunity to participate in the market, as shown in the figure below.
This is like unexpectedly discovering a hidden treasure chest in despair, thinking all hope is lost. This pattern thus provides an additional entry opportunity.
Now, I understand that trading the double bottom formation may seem more attractive, but the key lies in whether you can seize the opportunity. For cautious traders seeking more confirmation, closely monitoring the triple bottom formation is worthwhile. This is a pattern that can bring redemption, excitement, and substantial profits, adding value to your trading chart. Now that you have understood the appearance and operational mechanism of the triple bottom formation, next, I will explain the circumstances under which you should not trade this pattern. Keep in mind that all trading patterns have their own advantages and limitations.
3. The biggest mistake when trading triple bottoms: Avoid these traps.
(1) Error 1: Trading in the middle of the triple bottom pattern.
Firstly, trading within the price range is like trying to wear a pair of overly tight jeans; discomfort is inevitable. Remember, the triple bottom formation usually occurs during market indecision, where market behavior resembles a child hesitating in a candy store faced with many tempting options. Therefore, one should resist the impulse to frequently enter and exit during the formation of the pattern; instead, patiently wait for the market to make a clear decision.
In summary, avoid trading during the intermediate stages of pattern establishment, as shown in the figure below.
Please focus on the value area, namely the so-called support and resistance levels, as shown in the figure below.
(2) Error 2: Blindly trading at highs and lows.
What does this mean? Shouldn't we avoid trading the middle part of the triple bottom formation, and is trading at highs and lows also inappropriate? You should know that the triple bottom formation is notorious for its frequent false breakouts, as shown in the figure below.
This is due to the inherent characteristics of range markets, which expand and contract. The triple bottom may even evolve into a quadruple bottom. It is like a prankster lurking in the shadows, ready to jump out and scare you. Therefore, do not blindly chase the peaks and valleys of prices like an ignorant squirrel. Instead, wait for the market to confirm before trading, meaning you should patiently wait until the actual breakout occurs after the third bottom, as shown in the figure below.
And it should be confirmed that the price closes within that range as effective confirmation of the formation of the third bottom, as shown in the figure below.
Therefore, reaching highs and lows in price does not constitute sufficient reason for immediate trading. Instead, you should remain vigilant and wait for necessary additional confirmation signals.
(3) Error 3: Using double bottom formations to judge market direction.
Now, let us clarify a point to correct a common misconception: although the triple bottom pattern may play a key role in the market, it does not possess the prophetic ability to predict market direction. This means that even if you recognize the triple bottom formation, the market has no inevitable obligation to break higher. The following situations may also occur, as shown in the figure below.
This is akin to expecting to predict tomorrow's lottery numbers through a crystal ball, which is nearly impossible. Therefore, one should not solely rely on the triple bottom formation to determine the subsequent market trend. Comprehensive analysis of other relevant factors is necessary, treating the triple bottom formation as one of the auxiliary tools rather than the sole decision-making indicator.
(4) Error 4: Over-reliance on 'textbook-style' triple bottoms.
When discussing the triple bottom formation, do not be overly constrained by the definitions in traditional textbooks, as shown in the figure below.
This pattern is like a chameleon, changing its shape in diverse ways, with each turning point bringing new surprises. This indicates the existence of various effective triple bottom variants, just as you observed earlier, as shown in the figure below.
And this, as shown in the figure below.
Therefore, let go of your rigid expectations of the pattern and appreciate the beauty of its shape's diversity. The key lies in those 'sharp bottoms' you identify on the chart.
Now, you may be thinking: I know how to identify this pattern and the behaviors to avoid when trading; how should I proceed? If this is your question, now is the time to showcase your trading skills, as I will now reveal the three key market trends to focus on when trading the triple bottom pattern.
4. The ideal strategy for achieving successful trading of the triple bottom pattern.
(1) Ensure that the triple bottom is in the existing upward trend.
By ensuring your trading actions align with the current upward market trend, as shown in the figure below.
You are enhancing the probability of trading success, following the rhythm of the market and focusing on this upward trend, just like an experienced dancer seeking the ideal partner, ready to elegantly rotate and immerse themselves as the triple bottom pattern unfolds.
(2) Look for false breakouts or accumulation.
When you observe a false breakout at the third bottom, as shown in the figure below.
This is like noticing your dance partner pretending to be tired on the dance floor, but then suddenly reviving with their talent, signaling that the pattern is poised to take center stage in the market, as shown in the figure below.
From another perspective, if you encounter the following situation: failing to catch the entry timing for the double bottom formation, missing the false breakout trading opportunity of the triple bottom formation, do not worry, as there are still opportunities waiting for you. This is because if you observe price accumulation at the highs, as shown in the figure below.
This is like witnessing the moment before an electrifying elevator starts, as this phenomenon indicates that the triple bottom formation is preparing for a potential energy-packed breakout, as shown in the figure below.
Therefore, continue to pay attention to these cutting-edge market trends and be ready to showcase your trading abilities on the market stage. At this stage, you have mastered all the necessary key elements to successfully execute trading of the triple bottom pattern. However, as you well know, the effectiveness of these tools you have mastered depends on how you apply them. If you have been trading similar double bottom patterns for a long time, you are well prepared. However, if you seek a clear guide on how to utilize the triple bottom pattern for market discovery, trading, and trade management, then please continue reading the following content of this guide.
5. Mastering the triple bottom: A trading strategy that lets you dance in profits.
(1) Step 1: First, determine the upward trend within the daily time frame.
Regard it as discovering the ideal rhythm, laying the foundation for an engaging performance, exploring those continuously rising highs and lows that symbolize a strong upward trend, as shown in the figure below.
Once you confirm this upward trend, move on to the next stage, closely following the rhythm of the market.
(2) Step 2: Identify potential triple bottoms in the 4-hour timeframe.
At this moment, please shift your focus to the 4-hour chart, where the potential triple bottom formation will appear vivid. Compare this process to choreography, where each step carries a specific goal. Identify the triple bottom formation, which is connected by a neck line through three different bottoms, as shown in the figure below.
This is like observing a group of dancers synchronizing their steps, weaving eye-catching patterns on the dance floor. Once you recognize this masterpiece of a triple bottom formation, you should prepare to enter the market with precision.
(3) Step 3: Trade the false breakdowns at three points.
This is similar to executing an astonishing spin or quickly changing direction on the dance floor, leaving all viewers in awe. When the market briefly dips below the third bottom but quickly rebounds, as shown in the figure below.
This is a sign that the pattern is poised to take center stage, ready to become the focus of the market. Therefore, please, like an experienced dancer, join the trade in accordance with this momentum, showcase your trading skills, and seize the market opportunities, as shown in the figure below.
Timing is crucial, patiently wait for that false breakout to occur and take swift action.
(4) Step 4: Accumulation at the neck line reduces scale.
At this moment, it is time to enhance your trading performance. You may wonder: how to achieve this? By gradually reducing the trading scale near the neck line, as shown in the figure below.
Consider it a grand upgrade in choreography, where energy surges to new peaks. When the price decisively crosses the neck line, it signifies that the triple bottom pattern is about to release its full market potential. In this situation, how should you act? Simply put, you should increase your position size, expanding on top of the initial trade to maximize your profit potential, as shown in the figure below.
This is like the crescendo in a musical piece; the key is that this breakout provides investors with an opportunity to ride the wave of victory.
(5) Step 5: Use the 20-period moving average to track stop losses.
Since you have ventured into this field, how should you manage it? In this case, I recommend using the 20-period moving average as a tracking stop-loss tool, as shown in the figure below.
This indicator is like a trustworthy dance partner, ensuring your safety on the trading stage. As prices move in your favor, utilize this dynamic indicator to adjust your stop-loss position to protect your profits from being compromised, as shown in the figure below.
Here are other key points you should know: You always have the right to choose between Phase 3 and Phase 4. For traders who tend to take on higher risks, you can choose to trade between Phase 3 and Phase 4; if you are a more conservative trader, you can choose to enter the market when the price breaks the neck line (i.e., Phase 4); if your trading style is somewhere in between, you may consider taking action in Phase 3, rather than reducing positions, but rather expanding horizontally in Phase 4.
Therefore, put on your trading 'battle shoes', practice these steps, and let this simple triple bottom strategy become your ticket to trading success.
6. Conclusion.
Here is a summary of the core points of this guide:
(1) The triple bottom formation provides a second entry opportunity for traders who failed to seize the double bottom opportunity.
(2) It consists of a neck line and three different bottoms, usually formed during periods of market indecision and requiring some time to develop.
(3) When trading triple bottoms, avoid common mistakes such as trading within the price range and overly relying on textbook patterns.
(4) The best trading method is to align with the existing upward trend of the market and focus on false breakouts at the lows or price accumulation at the highs.
(5) A simple trading strategy includes identifying upward trends, discovering triple bottom formations, trading false breakouts, adjusting position sizes at breakouts, and using the 50-period moving average as a tracking stop-loss tool.
Simple and practical trading tips that let you profit steadily.
1. Invest in batches: Assume you have 10,000 yuan, split into five parts, using only 2,000 yuan for each trade.
2. Test investment: First use 2,000 yuan to buy a coin to test the waters.
3. Add to positions after a drop: If the coin price drops by 10%, add 2,000 yuan to increase the position.
4. Take profit when prices rise: If the coin price rises by 10%, sell part of it in a timely manner to lock in profits.
5. Repeating cycles: Continuously repeat buying and selling until the funds run out or the coins are sold out.
Strategic Advantages: The benefit of this strategy is that, even if the coin price falls, you can remain calm. By investing in batches, you avoid the risk of one-time investment. Even if the coin price drops by half, you are only gradually increasing your position. And each time you sell, you can lock in a 10% profit. For example, if you have 100,000 yuan, investing 20,000 yuan each time will earn you 2,000 yuan each time.
Follow Aze's steps closely, believe first and then receive; the team still has positions, leading you out of confusion.
The same goes: follow the right talent to reap rewards; the avatar → follow → this is your wealth manual.
