If you plan to invest in the cryptocurrency market, please take a few minutes to read my response thoroughly without missing a word.
Thousands of originally happy families end up broken, which stems from the pursuit of an unattainable dream of making a fortune in the cryptocurrency world.
I think the reason I can continue on the trading path is that I have been dedicated to learning and understanding the fundamentals.
Analysis of news and research on technical indicators. And the formation of a self-stabilizing profitable trading system!
Foolproof cryptocurrency trading 7 iron rules
1. Wait and see during sideways movement, act after the market changes
When the price fluctuates within a 3% range for over 72 hours, use 30% of the position to test the waters. Increase your position when breaking key resistance levels (such as the 20-day moving average), avoiding blind bottom fishing and peak selling.
2. Do not get attached to hot spots; positions need to rotate.
Use the 'Hot Spot Thermometer' indicator to monitor: when a certain coin's daily increase exceeds 50% and social media mentions surge, clear your position in the early morning of the next day. Historical data shows that this type of coin has an 83% probability of retracement within 72 hours.
3. Jump up significantly; hold on tight.
When the 'Island Reversal' pattern appears (the price jumps high and the trading volume increases more than three times), hold firmly until the RSI indicator is overbought (>80) and then take partial profits. In 2024, during the Ethereum Shanghai upgrade, this strategy helped me achieve a 127% return.
4. Large bullish candlesticks; exit at the end of the trading session.
Regardless of high or low positions, clear your positions by 14:50 when the daily trading volume exceeds 2 times the 60-day average. After the 2023 Dogecoin incident with Elon Musk, this strategy helped me avoid a 38% drawdown.
5. Buy online during bearish trends, sell offline during bullish trends.
Using the 55-day moving average as a lifeline: buy on bearish candlesticks (drop of <2%), sell on bullish candlesticks (increase > 3%). Combining with MACD golden cross signals can increase the success rate to 68%.
6. Do not sell on spikes; do not buy on drops.
Set dynamic profit-taking: when the price falls below the lowest price of the last 3 candlesticks, close the position immediately. During the 2024 BNB ecosystem explosion period, use this method to earn 42% more profit.
7. Prepare before buying; prioritize smaller entries.
Use the 'Pyramid Position Building Method': do not exceed 20% on the first position, add 10% for every 5% drop, and reduce positions by 3% during rebounds. This strategy can reduce the average cost by 15-20%.
Practical case analysis.
Case 1: 2024 LTC halving market.
Position building signal: Weekly MACD golden cross + RSI breaks above 50.
Operations: Build positions in batches for 30 days before the halving date (August 2), controlling total positions at 40%.
Result: Realized profits at the highest point, achieving a 187% return.
Case 2: 2023 ARB ecosystem explosion.
Position building signal: Twitter mentions exceed 500,000 in a single day + GitHub code update frequency increases threefold.
Operations: Heavily invest when breaking the $2.8 resistance level, set a 20% trailing stop.
Result: Successfully topped out with a return of 212%.
Words of wisdom for beginners.
Invest money that does not affect your life: it is recommended not to exceed 10% of household assets.
Stay away from leveraged contracts: 99% of liquidations come from overconfidence.
Regularly review: analyze gains and losses every month using the 'Profit and Loss Statement'.
Keep learning: follow SEC filings, project AMAs, on-chain data.
The coin market is a place full of opportunities but also full of risks. If you want to change your fate, you can try using some spare money. But remember: do not be greedy, do not panic, and strictly follow your plan.
I will introduce some basic trading indicators that can help you better analyze market trends and make trading decisions. Here are these indicators:
MACD (Moving Average Convergence Divergence): MACD consists of the fast line (DIF) and the slow line (DEA), which can help determine changes in trends. When the DIF crosses above the DEA, it may indicate a buy signal, while the opposite may indicate a sell signal.
2. RSI (Relative Strength Index): RSI is an indicator that measures market momentum and changes. When RSI exceeds 70, it may indicate that the asset is overbought, and a price correction might occur; when RSI is below 30, it may indicate that the asset is oversold, and a price rebound might occur.
Bollinger Bands: Bollinger Bands consist of three lines, with the middle being the moving average and the upper and lower lines being standard deviation lines. Bollinger Bands can be used to assess price volatility and support/resistance levels.
EMA (Exponential Moving Average): EMA is a weighted moving average that places more emphasis on recent price data. EMA can help determine the direction of the trend.
VWAP (Volume Weighted Average Price): VWAP is an average price weighted by volume. VWAP can be used to measure the true value of an asset.
Trading volume: Trading volume refers to the number of assets traded within a certain time period. Trading volume can help confirm the reliability of price trends; generally, an increase in trading volume accompanies a price increase and vice versa.
These indicators can be used alone or in combination to better understand the market conditions and make corresponding trading decisions.
MACD (Moving Average Convergence Divergence) is a technical indicator used to measure the convergence and divergence of two moving averages of asset prices over time. It consists of two lines: the fast line and the slow line. The fast line is the difference between the short-term moving average and the long-term moving average, while the slow line is the moving average of the fast line. The MACD value indicates the difference between these two lines and can be used to assess the strength and changes in price trends. When the MACD line crosses above the zero axis, it may indicate that the trend of price increase is strengthening, while when it crosses below the zero axis, it may indicate that the trend of price decrease is strengthening.
When the MACD line crosses the signal line from below, the trend will be bullish.
When the MACD line crosses the signal line from above, the trend will be bearish.
RSI (Relative Strength Index) is an oscillator used to measure the relative strength between upward and downward trends of asset prices. Its values typically range from 0 to 100 and are used to determine whether an asset is overbought or oversold.
When the RSI indicator is below 30, it is usually considered an oversold level, which may indicate that the price has fallen too much and a rebound may occur.
When the RSI indicator is above 70, it is usually considered an overbought level, which may indicate that the price has risen too much and a correction may occur. Traders can use the RSI indicator to assist in determining the timing of buying and selling, as well as changes in market trends.
To draw the upward trend line of the RSI indicator on the chart, you can connect two or three or more peaks of the RSI indicator that represent an increasing relative strength index. On the other hand, to draw the downward trend line, you can connect the lows of three or more RSI indicators that indicate a declining relative strength index. By observing these trend lines, you can better understand the changes in buying and selling power in the market and formulate trading strategies accordingly.
Bollinger Bands are a commonly used technical analysis indicator that compares an asset's price with its relative value changes over a period of time. It consists of three lines: the middle band is the moving average of the asset price, while the upper and lower bands are the results of moving the middle band up or down by one standard deviation. Bollinger Bands can be used to measure an asset's price volatility and trend, helping traders formulate buy and sell strategies.
When the upper and lower bands of the Bollinger Bands gradually narrow and tend to merge or overlap, it forms a phenomenon known as 'squeeze'.
When the price approaches the upper Bollinger band, a breakout may occur, indicating a bullish signal.
When the price approaches the lower Bollinger band, a breakout may occur, indicating a bearish signal.
Exponential Moving Average (EMA) is a weighted moving average used to measure the price trend of an asset.
EMA is usually used to confirm whether the price is in an uptrend or downtrend.
In addition, EMA can also be used as a reference for support and resistance.
VWAP (Volume Weighted Average Price) is a technical analysis tool that shows the ratio of asset prices to their total trading volume.
This indicator provides traders and investors with a measure of the average trading price over a given time period.
Trading volume is an indicator of market activity and liquidity, reflecting the number of assets traded over a certain period. High trading volume is often seen as a favorable signal because it indicates better market liquidity and more effective order execution.
1: Invest regularly in mainstream and leading coins.
Regular investment is better than a one-time all-in; there is a higher probability of making money. If you go all-in at once and the price drops later, you will find it challenging to add positions, and you cannot accumulate coins when the price is low. This can be particularly distressing, as you will miss opportunities to lower your cost basis. Even in a bull market, your gains will be significantly reduced.
2. Improve the ability to make money outside the market.
In the market, the main focus is on buying coins, accumulating coins. If you want to hold on to coins, you must improve your ability to make money outside the market. The ability to make money depends on the work you do. If you have a lot of time for work, invest more in yourself, learn more things, acquire more skills, and follow me as a Twitter KOL to turn traffic into cash.
3. Invest more in fields you are familiar with.
Invest more in areas you are familiar with, as this can help better control risks. Investing in unfamiliar areas may lead to greater losses. Investing in familiar fields increases cash flow, and with cash flow, you can earn more profits, so you won't have to sell your valuable coins due to price drops.
4. Deeply study the operational skills of speculative funds.
Familiarize yourself with the historical trajectories of hundredfold coins. You need to establish your own profitable trading strategy and continuously optimize your coin selection and timing in practice.
Tips for trading coins.
1. Invest spare money; avoid borrowing money to trade coins—invest money + invest effort.
2. Strictly screen valuable coins and create a reasonable capital allocation plan that aligns with reality—Sunny Investment Strategy
3. Adding positions—it's normal to have pullbacks after entering the market, so allocate capital reasonably and enter in batches.
4. Reject full positions; allocate positions reasonably. Do not put all your eggs in one basket to effectively reduce risk.
5. Keep an eye on the surroundings—read more news about the coin market and the latest financial news. The earlier you know, the better you understand, and the more money you can make.
6. Think inversely, do not go against the market or the main players; go with the flow.
7. Open contracts without full positions; leverage below 5 times. Do not easily use 100x leverage; it is better to avoid leverage altogether. Do not seek to get rich overnight, but aim for steady profits.
8. Manage your own positions—managing your positions is more important than anything else. If you are unsure, do not operate lightly. Not operating means no risk, and therefore no loss. Occasionally check your assets to see if they are managed and if the management is reasonable.
9. The bottom is in your mind, the top is in your mind; do not be afraid. The coin market will only make you grow; your mindset is more important than your actions. Keep the methods of trading coins in mind; there's no need to worry about not making money!#山寨季将至？
