The most aggressive method should also be divided into three parts. In other words, you should at least give yourself three opportunities.
For example, if the total account funds are 200,000, the client allows you to lose a maximum of 20%, which is 40,000, then I suggest your most aggressive loss plan is: 10,000 for the first time, 10,000 for the second time, and 20,000 for the third time. I believe this loss plan has a certain reasonableness because if you get it right once in three tries, you can be profitable or continue to survive in the market. Not being kicked out of the market itself is a form of success and presents a chance to win.
2. Grasping the overall market trend is far more difficult than dealing with fluctuations because trends involve chasing highs and cutting losses, requiring patience with positions, while buying high and selling low aligns more with human nature. Trading is about making money by going against human nature, which is precisely why it's challenging and rewarding. In an upward trend, any violent pullback should prompt you to go long. Do you remember what I said about probability? So, if you're not on the train or have gotten off, be patient and wait for a 10~20% drop, then go long boldly.
3. Set stop-loss and take-profit targets. Take-profit and stop-loss can be said to be key to whether one can profit. In several transactions, we need to ensure that total profits exceed total losses. Achieving this is not difficult; just do the following: ① Each stop-loss ≤ 5% of total funds; ② Each profit > 5% of total funds; ③ Total trading win rate > 50%. Meeting these requirements (with a profit-loss ratio greater than 1 and a win rate greater than 50%) will allow you to profit. Of course, you can also have a high profit-loss ratio with low win rates or low profit-loss ratios with high win rates. Anyway, as long as you ensure total profit is positive, total profit = initial capital × (average profit × win rate - average loss × loss rate).
4. Always remember not to trade too frequently. Since Bitcoin perpetual contracts trade 24/7 without interruption, many beginners trade daily, almost every trading day of the month, as the saying goes: if you walk along the river often, how can you not get your shoes wet? The more you operate, the more mistakes you will make, and after making mistakes, your mindset will deteriorate. When the mindset deteriorates, you may act on impulse, choosing 'revenge' trading: possibly going against the trend or taking heavy positions. This will lead to repeated mistakes and can easily cause significant losses on the books, which may even take years to recover.
A few points to note about rolling positions:
1. Sufficient patience; the profits from rolling positions can be enormous. As long as you can roll successfully a few times, you can earn at least a million. Therefore, you cannot roll lightly; you must look for high-certainty opportunities.
2. High-certainty opportunities refer to those that come after a sharp decline followed by sideways fluctuations and then an upward breakout. At this point, the probability of following the trend is very high; you must get on board as soon as you identify the trend reversal.
3. Only roll long, do not take short positions.
What does it mean for ordinary people to make money trading in the cryptocurrency circle, and what is the right approach?
For everyone entering the cryptocurrency circle for investment, whether old or new, the future trend of the cryptocurrency circle is indeed very optimistic.
Whether it's just for fun or wanting to make money through cryptocurrency trading to achieve financial freedom, how can we operate specifically to get results and achieve our desires?
As the number of global participants in the blockchain field increases, it gradually enters the public eye, and regulation is becoming relatively stricter, while the market is becoming more mature.
Compared to traditional industries, there are still many uncertainties, like policy, capital, news, etc. Risks and pitfalls are also more prevalent. This industry is a mixture of good and bad, and it is not an exaggeration to describe it as chaotic, especially for those without discernment, which means the risks and pitfalls far exceed the opportunities.
So how can we protect ourselves while still obtaining profits?
First and foremost, we must protect ourselves by enhancing our all-around understanding of the blockchain industry and investment field, mastering professional skills, having the ability to understand market movements, mindset, and effective strategies. These are fundamental to our survival and success in the cryptocurrency circle and are vital survival skills in this jungle of rules.
One must never harbor luck or gambling and speculative thoughts; as a result, you will definitely not be the exception. You are just one of many, either the least unfortunate or the more unfortunate.
Secondly, one must believe in the rules and trust the conversion between bull and bear cycles in the cryptocurrency circle. During a bear market, one should study their skills well, practice with small funds, and even if remaining in cash, can still outperform 90% of investors throughout the bear market. During the bear market, one should lie low and wait for opportunities to enter when the market is relatively at the bottom, and when the bull market comes, wait for it to blossom. Timing is crucial for us to make money and is an essential element to help us achieve significant results.
Third, many people have the misconception that their own capital is too small and want to make a fortune on a small investment. Without the ability, they infinitely amplify their greed, using contracts and leverage, unable to bear the benefits of cyclical trends. Even if they do not see profits for a day, they feel they cannot stand it. Such people, no matter how successful, are merely advanced financial workers, and will never enter the ranks of qualified, excellent investors, and will never live a life of time, financial, and energy freedom.
Because their thinking determines their upper limit, this is a cognitive bias that cannot be changed through trading techniques, systems, and strategies.
In the cryptocurrency circle, to make money, one must first experience losing money, summarize and reflect to find the core reasons for the losses, then learn systematically to change and break through it, leading to recovering losses and starting to earn small profits, eventually slowly accumulating wealth. This process is the cultivation of our capacity to carry wealth; only when our capacity to carry wealth increases can we properly safeguard our wealth.
Investing is something we will do for the rest of our lives, not just for one wave of the market; what we need to do is achieve long-term stable profits.
Therefore, before making a decision, we must ask ourselves: is it something we can judge based on our abilities?
If the answer is not affirmative enough, it is better not to act than to make mistakes. Making mistakes in the cryptocurrency circle leads to darkness in your life. If you do not want to live such a life in the future, then it is crucial to clearly see the boundaries of your abilities.
Clearly positioning oneself and knowing oneself is actually very simple; as long as we are real enough, we can achieve it.
Of course, it is easier to deceive oneself and avoid harm, as that is human nature.
However, the cruelty of the financial market and cryptocurrency circle does not care about these so-called self-esteem, face, emotions, whether you have money, or how well you are doing, etc. It only looks at strength.
If you realize you do not have this strength, either do not participate or improve your strength; there are no shortcuts.
Cryptocurrency Circle Insights: The Secrets of MACD and Moving Averages
Technical indicators are merely tools.
Do not mythologize them, nor should you view them as completely useless.
Quoting a famous saying from university as the preface of this article:
Knowing when to stop allows one to find stability; finding stability allows one to be calm,
calmness leads to peace, peace leads to careful thought, and careful thought leads to success.
The same technical indicators,
in the hands of some people, are powerful tools for making profits,
while in the hands of others, they become instruments of self-destruction.
The reason for different outcomes lies with the users,
and cannot be blamed on the technical indicators.
There is no technical analysis system that can work effectively from start to finish. Why? It's simple: every analytical system has its timeliness and locality. A currently effective analysis system may become ineffective after a while. An analysis system that works well in one market may not apply in another.
There is no technical analysis tool in the world that can make significant profits in the trading market solely by relying on simple application without thinking and understanding. The trading market is a battleground of wisdom between people; the winners are always those who think diligently and are good at dialectical analysis.
Next, I will explain the MACD indicator, intending to provide a perspective and ideas for traders.
(1) The Principle of MACD
The MACD indicator is based on the principle of moving averages, which smooths the closing price to create a trend-following indicator. The MACD indicator uses the convergence and divergence between the short-term (commonly 12-day) moving average and the long-term (commonly 26-day) moving average to assess buying and selling opportunities.
The advantage of MACD is that it eliminates the frequent buy and sell signals generated by moving averages. It increases the requirements and restrictions for issuing signals, making it more stable in practical use than moving averages. Its disadvantage, like that of moving averages, is that during sideways or range-bound markets, it is easy to generate false signals and give incorrect indications.
(2) The Application of MACD
1. Basic application concepts
(1) MACD represents the deviation between the short-term exponential moving average and the long-term exponential moving average.
(2) When the market trend strengthens, the short-term moving average rises faster than the long-term moving average, causing the MACD to move upward.
(3) When the market's upward trend weakens, the short-term moving average will gradually flatten. If the market continues to decline, the short-term moving average will cross below the long-term moving average, and the MACD line will drop below the zero line.
(4) Changes in the direction of MACD reflect that the original market trend will gradually weaken, but whether a trend reversal will definitely occur should be considered in conjunction with other indicators.
(5) During price movements, the short-term moving average may converge or diverge from the long-term moving average; thus, MACD actually reflects the degree of convergence or divergence of the moving averages.
2. Application rules
(1) After the last sell signal is issued, if the MACD line crosses below the zero line from above, subsequent buy signals will be more credible. When issuing a buy signal, the MACD line may not be below the zero line, but during the last price decline, the MACD line should be below the zero line.
(2) After the last buy signal is issued, if the MACD line crosses above the zero line from below, subsequent sell signals will be more credible. When issuing a sell signal, the MACD line may not be above the zero line, but during the last price increase, the MACD line should be above the zero line.
(3) When the market is in a bullish trend, especially at the beginning and main rising phase, the MACD may issue a buy signal before it enters below the zero line, but due to the strong market conditions, buying can be considered. Similar situations also apply to bearish markets, but generally, when making investment decisions, one should fully consider the zero line rule.
3. Gerald Appel's Golden Rules
(1) At least two MACD indicators should be used in combination: a short-term MACD for determining buy timing and a long-term MACD for determining sell timing.
(2) When the market is in a significant bullish trend, one should actively buy and be cautious about selling. At this time, short-term MACD such as 6-19 days can be used to determine buying timing, and long-term 19-39 days MACD can determine selling timing.
(3) When the market is relatively stable or slightly rising, one should actively buy and be cautious about selling. Use 12-26 days MACD to determine buying timing and 19-39 days MACD for selling timing.
(4) When the market is in a significant bearish trend, one should actively buy and frequently sell. In this case, a more sensitive 12-26 days MACD should be used as the standard for choosing buying and selling timing. Note: Unless the price reaches or falls below the stop-loss level, the prerequisite for choosing to sell is that the MACD line has previously crossed above the zero line during the upward movement.
(3) Combination analysis of moving averages and MACD
1. In practice, when the price of a cryptocurrency hits a new low (or fluctuates sideways), if the MACD does not follow suit and instead gradually rises, this bottom divergence pattern indicates that the market may soon enter a phase favorable for buying.
2. The bottom divergence between the MACD and the cryptocurrency price is sometimes not a straightforward signal. When it shows a complicated side, it often causes traders who rigidly and mechanically apply technical indicators to suffer.
3. Bottom divergence can appear multiple times during the decline of a cryptocurrency. If traders recklessly buy when they see bottom divergence, they will inevitably incur losses as the price continues to decline. This shows that the analysis and application of technical indicators is not an isolated and simple process; it requires traders to repeatedly verify from the perspective of technical environment analysis.
4. Moving averages and MACD indicators not only complement each other but also emit resonant signals at critical points. The details of the integration between moving averages and technical indicators are quite complex and difficult to describe one by one. Traders can gradually explore commonly used analytical ideas in practice.
5. A strong crossover above the zero axis means that the DIF has broken through the DEA upward above the zero axis. If the subsequent MACD histogram can continue to expand, and the price is supported above the moving average system, then the upward momentum will continue to strengthen, and traders can choose to go long.
This article mainly explains the technical theories closely related to moving averages. Without these foundational theories as a groundwork, moving average techniques are like castles in the air—vague and elusive, impossible to grasp. Solidly starting from the basics and continually broadening and deepening theoretical knowledge, you'll find that the trajectories of price fluctuations become increasingly clear and easier to discern.
The four-year cycle of the cryptocurrency circle's bull market is about to begin. How can ordinary people achieve a reversal of their financial fate? Learning and improving oneself is the fastest shortcut!
To be honest, the current market does not even count as an appetizer for a true bull market, yet many people are clearly anxious.
Why?
Those who are out of the market are afraid of missing out, those fully invested fear corrections, worry about the market testing the bottom again. Those with some positions worry daily about their little U, fearing they are missing out on profits.
This is only the spot market; it should be slightly better currently. For those who like to operate contracts frequently, it is even more stimulating, doing both longs and shorts and being obsessed with this market.
In the market, it’s a matter of coming and going, having a blast, and after a flurry of operations, looking back...
They feel that the exchange is their home, and everyone should lose money; they deserve to make money.
Little did we know, the market loves such retail investors. The big players aim to trigger our human weaknesses, making us itch with impatience.
Looking back at the time when I first entered the cryptocurrency circle, I also went through this. The ignorant are fearless, only thinking about making every penny in this market, but never considering whether they have the ability to earn that money.
The result is predictable.
Now looking back, the past is vivid in my mind. When others told you there was a pit ahead, you didn't believe it and had to jump in to see. When you got up and looked, wow, it really was a pit.
Teaching people in the financial market is very difficult, and teaching is also a process that requires multiple attempts. People in the cryptocurrency circle tend to be very stubborn.
Now looking back, I realize how ignorant I was before. Due to a lack of understanding of this circle, without reverence for the market, and not liking to study, relying solely on passion, I ended up with injuries all over.
If we do not improve our understanding through learning and professional skills and want to make money in the cryptocurrency circle and keep the profits during the bear market, then through the next bull market, using time to exchange space and achieve a reversal in our financial destiny will be extremely challenging.
No successful person has had an easy journey. Anyone like me who can now professionally engage in investments in the cryptocurrency secondary market and achieve results has endured hardships that ordinary people cannot imagine.
Having difficulties is not something you can just bypass; it's something we must confront head-on. Only by doing so can we enhance our strength and truly allow ourselves to grow.
Improving your ability through learning is one of the fastest shortcuts.
Let's work hard and seize the opportunity of the next bull market. See you at the peak of the bull market.
I am A Xin. If you don’t know how to operate in a bull market, click on my avatar, follow me for bull market spot planning, contract passwords, and free sharing.
