In fact, we can understand it simply by doing a quick calculation—assuming the value of the position for the former is 12000U, and the value of the position for the latter is also 12000U, at first glance, the scale of both seems to be comparable. However, in reality, their liquidation prices are worlds apart. I have been in the cryptocurrency space for 8 years, starting with an initial capital of 80,000 and growing it to 26,000,000 today. I want to sincerely tell everyone here: never get too caught up in the liquidation price. What truly allows you to survive in this unpredictable cryptocurrency market for the long term is a steadfast stop-loss strategy. When trading, don’t always think about relying on contracts to achieve overnight wealth through small investments; in reality, most people fail because they turn the mentality of 'taking a gamble' into a reckless 'bet', ultimately losing even their principal.
Real profit in the crypto space is never about playing tricks, but about 'finding the right path and holding on.' I know a friend from Hangzhou who was particularly obsessed with short-term techniques in the early years. Today he watches the 1-minute chart to chase up, and tomorrow he looks at the 5-minute chart to sell off. In less than two years, he lost 150,000. Later, he calmed down and switched to 'mainstream coins + swing trading', increasing from 120,000 to 6 million over three years. It wasn't that he suddenly figured things out, but that he finally found the rhythm that suited him. This year, I reorganized my 8 years of practical strategies and insights. After six months of personal testing, I turned 200,000 into 3.8 million. Today I'm sharing it; for those who happen to see it, study it carefully, it’s more useful than blindly making 100 trades.
I have been trading for 8 years, and I have fallen into more pitfalls than I have made money from. In the end, I concluded one principle: If you want to change your fate in the crypto space, don’t touch contracts, focus on mainstream spot trading. If you can’t even do spot trading well, don’t expect to turn things around with contracts. In this circle, those who can make money from contracts are either institutions or playing with other people’s money. Ordinary retail investors touching contracts are just giving money to the market.
Crypto trading methods:
1. Allocate large positions to mainstream value coins, only trade spot (definitely do not touch contracts), hold for the medium to long term, and use the 'rolling position strategy' flexibly to adjust positions. For example, if it rises a lot, reduce a bit; if it drops significantly, increase a bit. Don’t hold dead positions or sell randomly.
When the market crashes, first check if the 4-hour line has broken the 20-day line. If it hasn't broken, there’s no need to panic. The probability is one of these three situations:
a. Explosive contract market: The main force deliberately crashes high-leverage long positions. This has nothing to do with the real trend of the spot market. Once the emotion passes, it will naturally rebound.
b. Normal pullback demand: After mainstream coins soar, if there is a gap above the 5-day line, there generally needs to be a pullback to the 5-day line or even the 10-day line. This is 'charging', not a trend reversal.
c. The 'cutting leeks' tactic: Retail investors love to chase highs, and the main forces deliberately crash to scare you into selling your positions. Once you cut your losses, they will slowly pull back.
2. For profitable swing trades, don’t wait to 'sell at the highest point.' Reduce your position in advance or sell in batches at high levels. For example, if you earn 20%, sell 30% first to lock in some profits and then observe the trend for the remainder; don’t wait to 'ride the roller coaster.'
3. Pre-set buy orders at the daily level's 5-day, 10-day, and 30-day lines in batches, and accumulate at low levels. There’s no need to watch the market all day; when it drops to the position, it will automatically complete the transaction, avoiding the urge to chase highs.
4. Use the 'Lifeline Strategy' to judge trends: For example, using the 20-day line as the lifeline, if the trend changes and effectively breaks below (3 consecutive K-lines closing below), reduce positions promptly when it pulls back to the lifeline; don’t hold onto wishful thinking.
5. When there is a surge, don’t blindly chase higher; think about 'risk'; when there is a crash, don’t panic; look more at 'opportunities.' Accumulating at low levels in batches is 10 times safer than chasing highs.
6. For profitable positions, reduce your holdings appropriately; don’t be greedy. Always set a stop-loss for bottom-fishing orders; even if you lose 5%, you must cut it to protect your capital to continue trading.
7. When the direction is unclear, it’s better to miss out than to make a mistake. The crypto space isn’t short of opportunities; what’s lacking is the ability to survive until the opportunities arrive.
No more nonsense!
I share my trading strategies and insights from these years with everyone. As the old saying goes, 'Standing on the shoulders of giants can save you ten years of hard work.' For those who happen to see this and want to improve their trading skills, ponder and practice more. It's much more reliable than asking everywhere, 'Can I buy?'
When trading crypto, you need to look at the market with a 'long-term perspective'; this is the most stable state.
To put it simply: You don’t have to watch the market every day. When you have time, open the daily chart to see if it meets the signals. If it does, take a trade; if not, just wait. Earning steady money is better than anything else.
I previously talked about intraday short-term trading, with both principles and techniques. Many friends said, 'You can make quick money, but watching the market is too exhausting.' Some friends are part-time traders, working during the day and lack the energy to watch the 1-minute or 5-minute charts every day.
They want to hold positions for a long time without constantly staring at the charts; they hope for larger profit targets while also wanting to control losses. Is there such a trading method?
The answer is definitely yes, and that is swing trading.
Swing trading is particularly popular in the crypto space, putting the least pressure on traders while still providing considerable returns, especially suitable for part-time crypto traders.
However, before discussing swing trading, I must emphasize one point:
Regardless of the trading style, in the crypto space, it is 'your own responsibility for your own account.' If you earn, it’s yours; if you lose, don’t blame others. No method is absolutely better; it depends on what suits you and what you like.
Just like a swing trading expert I know, who entered the industry 12 years ago, tried short-term, ultra-short-term, and even contracts, but frequently faced liquidation, losing up to 800,000 at one point.
It was only when he began swing trading that he discovered: for him, swing trading was the best choice, and the daily chart could provide the most accurate trading signals.
Therefore, if you want to achieve stable profits in the crypto space, first find the trading style that suits you, then practice the strategy. Don’t follow others just because they say short-term is good, or that contracts can make quick money. Following the crowd will only lead to significant losses.
01 Short-term and swing trading advantages and disadvantages
Since you want to find a trading style that suits you, you must first understand the advantages and disadvantages of different styles. Next, let’s discuss the advantages and disadvantages of short-term trading and swing trading:
The advantages and disadvantages of short-term trading
Advantages:
The market has many short-term fluctuations, with numerous trading opportunities on the 1-minute, 5-minute, and 15-minute charts.
Intraday trading can lock in short-term targets, such as earning 2% daily and stopping; trading has a clear direction.
Risk is easier to control, with intraday stop-loss set according to capital and price points. Position sizes and risk management can be quantified.
Disadvantages:
Frequent trading increases the probability of making mistakes. Sometimes you earn from 10 trades but lose it all on 1 trade.
Staring at the market for a long time is particularly exhausting, stressful, and over time can be detrimental to your health.
The advantages and disadvantages of swing trading
Advantages:
Be able to choose trades with high profitability potential; if it doesn’t meet the signals, just wait and don’t enter blindly.
Less pressure than intraday trading; you don’t have to stare at the market all day. You can just check the daily chart when you get home from work.
Fewer trades mean lower transaction fees than short-term trading, which can save a lot of money in the long run.
Disadvantages:
Long holding times can lead to overnight risks (for example, if negative news breaks in the early morning, you could wake up to losses);
It requires sufficient patience and strong principles; don’t make random moves at the sight of slight fluctuations.
In fact, intraday trading has great potential for profit, but it is exhausting. Swing trading is stable profit and offers freedom. Regardless of the method, as long as it can make money, it’s a good approach. The key is whether your personality, time, and skills can keep up.
Next, I’ll discuss this swing trading expert's understanding of swing trading and detail the six steps for swing trading, which are all practical insights. Remember them well!
02 What is swing trading?
I have talked about short-term trading before. Friends who haven’t seen it can look through my previous content. Today, I will focus on swing trading.
Swing trading (also known as oscillating trading) is about capturing the 'big waves of price rises and falls' to profit, with holding times from a few days to a few weeks. There’s no need to worry about the small daily fluctuations; just capture the big trends.
Swing traders not only use technical analysis to find opportunities but also consider fundamentals (such as project benefits, industry policies) to judge price trends and patterns.
Swing trading is mainly divided into two parts: the swing (large rise and fall trends) and fluctuations (small ups and downs within the trend). In simple terms, it’s about 'catching the big moves, not the small ones.'
03 How to Conduct Swing Trading?
Now I will share the six steps of swing trading with you. Following these steps can help you avoid 80% of the pitfalls:
1 Focus on the daily chart
Take a look at the daily chart more often, as it can show the most comprehensive price trends and provides the most reliable signals.
But be aware: not all daily charts are useful.
I recommend everyone use the commonly used 24-hour daily chart in the crypto space (closing at 4 am every day). This daily chart reflects the trading situation of the entire day, and the signals are more authentic.
If you can make stable profits using the daily chart, then try the 4-hour chart and gradually refine your approach.
In summary, the higher the time frame, the more reliable the price signals. Don’t start by looking at the 1-hour or 30-minute charts; it's easy to be deceived by small fluctuations. 2. Draw key support and resistance lines. Drawing support and resistance lines is the most crucial step in swing trading. If you can’t find these two lines, you basically can’t do swing trading well.
Let me introduce you to two lines that you must be able to draw:
Support and resistance lines: The support level is a low point on the chart that repeatedly does not break, and the resistance level is a high point that cannot be exceeded. Moreover, support and resistance are not precise points but ranges. For example, if BTC does not break between 28000-28500, this is the support zone.
Trend lines: Although trend lines are very commonly used, many people draw them incorrectly. The correct way is: an uptrend line connects each fluctuation's low points, and a downtrend line connects each fluctuation's high points. Don’t just find two points and draw; that’s meaningless.
3 Judging Oscillation
If you can mark support and resistance areas on the daily chart, the next step is to use the high and low points of the fluctuations to judge the oscillation (which is the trend).
Oscillation mainly has three types: uptrend, downtrend, and range trend.
Uptrend: The price's highs are getting higher, and the lows are also getting higher. This is the right time to buy and follow the trend.
Downtrend: The price's highs are getting lower, and the lows are also getting lower. This is the right time to sell, don’t go against the trend.
Range trend: The price moves horizontally between support and resistance zones, also known as a consolidation period. This is the most common trend; in fact, range trends are easier to make money from: Buy at the support zone, sell at the resistance zone, and arbitrage repeatedly.
4 Look for price action signals
By doing the first 3 steps well, you can already judge the oscillation of the daily chart. Next is to find entry signals:
If the market is in an uptrend, watch for buying signals in the key support zone. For example, if a 'bullish pin bar' (long lower shadow, small body K-line) appears in the support zone, this is a good opportunity to enter and profit from the rising trend.
If the market is in a downtrend, watch for selling signals in the key resistance zone. For example, if a 'bearish pin bar' (long upper shadow, small body K-line) appears in the resistance zone, sell at this time to profit from the declining trend.
In fact, when doing swing trading, don’t think about 'capturing the entire wave.' It’s hard to achieve. Just focus on the wave changes, patiently wait for the signals to confirm before entering, and you can earn most of the profits. 5. Determine exit points. The premise of determining exit points is to set your take-profit and stop-loss before entering. Once you enter, your emotions will be affected by price fluctuations, making it easy to alter your points. Setting it in advance will prevent panic.
How to determine exit points? It still relies on support and resistance levels.
For example, looking at the BTC daily chart, it is clearly in an uptrend, and set take-profit just below the next resistance zone (don’t set it too tightly; leave a bit of space). If the price reaches the take-profit point early, don’t feel regret; the money you’ve earned is real profit, and being greedy can easily lead to losses.
For example, looking at the ETH daily chart, if you buy in the support area, set your stop-loss below the support area. If it breaks the support, it means the trend has changed, so stop-loss promptly instead of holding your position.
In summary, support and resistance zones and trend lines are the foundation of all trading. Once you understand these two, the entry and exit points become clear.
Risk management is about doing good stop-loss and take-profit.
Stop-loss: It's best to set it below the tail of a pin bar, for example, for a bullish pin bar, set the stop-loss below the lowest point of the lower shadow. If it's a bullish engulfing pattern, set the stop-loss 10-20 points below the K-line.
Take-profit: Again, look at the key support and resistance levels. In an uptrend, if you buy at the support zone, set take-profit at the next resistance zone. In a downtrend, if you sell at the resistance zone, set take-profit at the next support zone.
The key to making money with swing trading is to seize the fluctuations between support and resistance. Don’t be greedy; earn a little each time, and over the long term, it will be considerable.
I am A Xin. If you don’t know how to operate in a bull market, click on my avatar to follow. I will share bull market spot planning, contract strategies, and free insights.
