From May 23, 2022, to June 4, 2024, in two years, with less than 700,000, I achieved a win rate of 418134.86%, and I managed to make more than 28 million. Let me share some practical tips on how to earn more wealth in the cryptocurrency space.
The journey is long, and I hope everyone takes fewer detours and experiences fewer tragedies! Having achieved financial freedom, I have been consistently creating content on Zhihu. In fact, many people do not understand why, after achieving financial freedom and reaching a few small goals, I still want to do these things.
I have also asked myself the same question. In the process of finding my original intention, on one hand, it is for my hero's dream. I dedicate everything to trading, and I don't want my exceptional skills to go unnoticed!
On the other hand, I want to provide a pathway for those who are keen to learn; what I have gained in the market is also a process of giving back to the market. The law follows nature. I recall how I struggled for half a year due to the issue of using excessive leverage, and there was no reference path for learning. I could only repeatedly analyze the K lines, day after day, night after night, crawling and rolling to the present, deeply understanding the hardships of retail investors in the crypto world, and being able to empathize more!
Looking back at my three failures in the graduate entrance exam, with debts of millions, various small loans, and endless harassment from creditors, the only memories are of my mother's tears and family abandonment, broken relationships, and going alone to Shenzhen, Shanghai, Hong Kong, and Singapore. In the crypto world, I can now see like-minded people learning and gaining real knowledge, mastering skills, and earning more wealth; this is my driving force, as well as the likes, collections, follows, and comments from fans and family, which are the source of my persistent updates and creations!
Crypto survival guide: Revealing super practical trading techniques (pure dry goods)
Grinding through the crypto world, your trading strategy is your 'secret weapon'. The following rules are the crystallization of practical experience, so hurry up and save them!
- Entry section: Testing the waters in the crypto circle, prepare to proceed; steadily enter the market, refuse to rush in.
- Sideways section: Low-level sideways movements create new lows, heavy positions for bottom fishing are timely; high-level sideways movements surge again, decisively sell without hesitation.
- Volatility section: Sell when prices surge, enter quickly during crashes; watch and wait when the market is flat. A flat market means it could bounce back; hold onto your assets tightly, and the rise may come in the next second. During rapid rises, be wary of sharp declines and be ready to secure profits; slow declines are good opportunities for gradual averaging down.
- Timing of buying and selling: Do not buy at peaks; do not sell during crashes; do not trade when the market is flat. Buy on bearish candles, sell on bullish candles, operate in reverse to stand out. Buy on large morning drops, sell on large morning rises; do not chase high prices in the afternoon when the market rises sharply, buy on large afternoon drops the next day; do not cut losses on large morning drops, remain steady when there is no rise or fall; average down to seek breakeven, excessive greed is not advisable.
- Risk awareness section: A calm lake can suddenly rise high waves, there may be big turbulence afterward; after a big rise, a pullback is inevitable, and K lines exhibit a triangle for several days. In an uptrend, watch for support; in a downtrend, watch for resistance. Full position trading is a big taboo; acting unilaterally is not feasible. In the face of uncertainty, know when to stop and seize the opportunity to enter and exit. Trading cryptocurrencies is essentially about trading mindset; greed and fear are the greatest enemies; be cautious when chasing highs and cutting losses, maintaining a calm and composed state.
In addition to the rules, I have also compiled several super practical trading methods that can benefit both beginners and seasoned players.
Oscillating trading method: Most market conditions are in oscillating patterns, using high selling and low buying within ranges is the foundation for stable profits. By using the BOLL indicator and box theory, combined with technical indicators and patterns, accurately identify resistance and support. Follow short-term trading principles and avoid greed.
Breakthrough trading method: After a long period of consolidation, the market will choose a direction; entering after a breakout can lead to quick profits. However, one must have precise breakout judgment skills and maintain a steady mindset, avoiding greed and fear.
Unilateral trend trading method: After the market breaks out of the range, it will form a unilateral trend; trading with the trend is key to profit. Enter positions during pullbacks or rebounds, referencing K lines, moving averages, BOLL, trend lines, and other indicators to skillfully navigate.
Resistance support trading method: When the market encounters key resistance and support levels, it often faces obstacles or gains support. At this time, entering a position is a common strategy. Use trend lines, moving averages, Bollinger Bands, parabolic indicators, etc., to accurately determine resistance and support levels.
Pullback trading method: After significant rises or falls, there will be a brief pullback or rebound; seize the opportunity for easy profits. The main basis is to judge based on K line patterns; good market sense will help you accurately grasp highs and lows.
Time frame trading method: The morning and afternoon sessions have small fluctuations, suitable for conservative investors. Although the time to profit from placing orders is long, the market is easier to grasp; the evening and early morning sessions have large fluctuations, suitable for aggressive investors, who can make quick profits but face higher difficulty, requiring strict technical and judgment skills.
If you are also a technology enthusiast, researching technical operations in the crypto world, you might consider following the public account (YuanYuanJuCai), where you will gain the latest crypto intelligence and trading skills!
Are you eager to learn how to anticipate market trend changes in advance? Unfortunately, such methods do not exist. No trading system or method can achieve this, and there is no such thing as the 'best trend reversal indicator'. However, you can learn how to interpret price movements and identify potential areas where the market may reverse.
In this guide, you will learn the following:
(1) How to identify trend reversals by analyzing market price behavior.
(2) How to determine where the market may start to reverse (with higher accuracy).
(3) How to identify trend reversals with higher probability.
2. How to identify trend reversals—identify weaknesses in trend dynamics.
(1) Define trend dynamics.
Trend dynamics are part of the trend that is 'stronger', trading in the same direction as the trend (this is why it is called trend dynamics). In a healthy uptrend, trend dynamics typically show stronger bullish signals than bearish candles, with bullish candles being relatively abundant and their closing prices close to the day's highs, as shown in the figure below.
When the size of bullish candles decreases, it usually indicates that buying pressure is weakening, or there is simultaneously selling pressure, as shown in the figure below.
However, this does not mean the market will necessarily crash. However, it is a clear sign that buyer strength is weakening, and a temporary pause may be needed before the market may rise again.
(2) Determine the strength of the pullback trend.
The pullback trend is the opposite of the trend dynamics; it is the 'weaker' part of the trend, moving against the direction of the trend (this is why it is called the pullback trend). In a healthy uptrend, the pullback trend typically shows more bearish signals than bullish candles, with bearish candles being relatively fewer and usually closing at the center or below the trading range, as shown in the figure below.
When the size of bearish candles increases, it usually indicates that selling pressure is intensifying, as buyers are reluctant to buy at higher prices, as shown in the figure below.
Similarly, this does not mean that the market will definitely reverse from this point. However, it is another sign that buyer strength is gradually weakening.
(3) How to identify trend reversals—breaking through support/resistance areas.
As the trend develops, it will enter a distribution phase, during which the power between buyers and sellers tends to balance (the market appears to have entered a range state). In this phase, support areas become particularly critical as they represent the last line of defense for buyers. If this support area is broken, the situation will become very unfavorable for bulls, as shown in the figure below.
Based on empirical observation, support areas that are tested multiple times in the short term will have a reduced probability of persistence.
(4) Breakthrough of long-term trend lines
In some cases, the market shows respect for key trend lines; if this trend line is broken, it may indicate that buyer strength is weakening, as shown in the figure below.
It is evident that what you learned earlier were 'analysis' techniques, which help you analyze when market trends may reverse. However, this is not sufficient because market structures are always changing; sometimes the market respects support or resistance levels, and other times, it may be trend lines, etc. Therefore, in the following content, you will learn 'forecasting' techniques to help you identify high probability situations where the market may reverse.
3. Areas where the market may reverse—higher time frame structures
Not surprisingly, support or resistance levels identified on longer time frames have more influence compared to similar levels on shorter time frames. This means that support or resistance levels identified on a weekly basis are more critical than those identified on a 1-hour basis. Therefore, if you observe a sudden market reversal, it likely indicates that the market has entered a structure of a higher time frame (such as a support or resistance level) and achieved a reversal within that structure, as shown in the figure below.
This method is useful for two main reasons: First, you can use the structure of higher time frames to identify areas of potential market reversal with high probability. Second, you can avoid trading directly within higher time frame structures, thus avoiding potential bad trade setups. Next, let's continue learning the subsequent content.
(1) The overstretched market
First, let's clarify the concepts of mean reversion and overstretched markets.
Mean reversion: This means that market prices tend to revert to their average levels, which can be measured using moving averages, Bollinger Bands, or other trend reversal indicators.
Market overstretching: This means that market prices have deviated from their average levels, presenting a state of 'overstretching'.
The truth is that the market rarely moves in a straight line. When the market is in an 'overstretched' state, it usually experiences a downturn before continuing to rise (this is why, in an uptrend, you will see higher highs and lower highs). At this point, you might wonder: 'What does an 'overstretched' market look like? (Hint: You do not need to rely on any reversal indicators to identify this situation.) As shown in the figure below.
Therefore, when you observe that the market exhibits characteristics of overstretching, a wise choice is to wait for the market price to pull back to reasonable levels before considering establishing a position. Alternatively, if you are a mean reversion strategy trader, you can use this phenomenon for contrarian trading, establishing a position when the market price approaches its mean.
(2) Parabolic movement
Parabolic movement usually occurs in the later stages of a long-term uptrend when the market price suddenly presents a ballistic vertical rise, similar to a rocket launch. You will also notice that the range of candles in a parabolic move is much larger than that of earlier candles. When this occurs, it usually indicates that the uptrend is about to end because 'blind' capital is flooding into the market, while 'smart' capital is exiting their trades, often accompanied by a significant increase in volatility. Therefore, if you notice that a market has experienced a long-term uptrend and suddenly exhibits a parabolic rise, it could be a strong signal indicating that a market top is imminent, as shown in the figure below.
I realize that identifying parabolic moves may involve some subjectivity; therefore, it can be viewed as one of many market reversal indicators that warrant close attention. You might consider using the Average True Range (ATR) indicator and analyze volatility data from the past few years. If the ATR value is at a multi-year high, it could be a potential warning signal. Additionally, the Keltner Channel can also be used as one of the trend reversal indicators to 'predict' market turning points.
4. How to identify high probability trend reversals.
You have learned various techniques to identify trend reversals and predict market turning points. However, it is important to note that you should not rely solely on any one technique, as this often leads to low probability trend reversals. Conversely, when you combine multiple techniques, you can increase the likelihood of identifying high probability trend reversals, as follows:
(1) Sugar Weekly
The key support level for Sugar is formed by the long-term trend line and support area, which was eventually broken, leading to the formation of a typical head and shoulders top pattern.
(2) Corn Weekly
Corn prices have strongly retested previous highs. However, with increasing selling pressure (manifested as large bearish candles) and decreasing buying pressure (manifested as small bullish candles), the market has shown danger signals. Additionally, you will notice a common trend reversal pattern: a small head and shoulders formation indicating that buyers cannot break through previous highs. Importantly, there are no hard rules or fixed guidelines for determining the best combination; it all depends on the interpretation of market price movements to find high probability market turning points. No matter how confident you are in the market, you still need a clear plan for entering, exiting, and managing your trades while adopting appropriate risk management measures.
5. Common Questions
(1) How do I confirm that the parabolic move will reverse or continue to rise?
It is difficult to determine, but I focus on the depth of the pullback. If the pullback of small candles is shallow, then the market is very likely to rebound again. However, if the pullback is very steep and large bearish candles appear, the parabolic move is likely over, and the market may enter a range or completely reverse.
(2) Are there any common chart patterns for trading trend reversals?
Yes, if you want to discover more trend reversal patterns for trading trend reversals, please check the following: (Inverse head and shoulders trading strategy guide), (Head and shoulders trading strategy guide), (Double bottom trading strategy guide), (Triple top chart pattern complete guide).
6. Conclusion
There is no method to achieve 100% accuracy in identifying market trend reversals, nor is there a so-called 'best trend reversal indicator'. Instead, what you can do is read price movements and identify potential areas where the market may reverse. Here are some references:
(1) Identify weaknesses in trend dynamics.
(2) Determine the strength of the pullback trend.
(3) Break through key support or resistance levels.
(4) Breakthrough of long-term trend lines.
(5) Prices are entering a higher time frame structure.
(6) Prices are too high.
(7) The price is parabolic.
When multiple factors converge, the likelihood of a trend reversal increases.
One tree cannot make a forest, one lonely sail cannot go far! In the crypto circle, if you don't have a good circle, and no first-hand news from the crypto world, I suggest you follow Lao Wang, who will help you succeed without investment, welcome to join the team!!!