In this market where only a few are destined to profit, all fleeting legends of sudden wealth ultimately cannot compete with a stable and profitable trading system. The following 10 rules are the core essence I have distilled from seven mathematical masters, and are worth printing and sticking next to your screen.
1. 'Nine-turn reincarnation' law
Any popular cryptocurrency that starts a continuous decline for nine days from a stage high, with gradually shrinking trading volume, often indicates that market sentiment has shifted from panic to despair. At this moment, there is no need to rush to bottom fish, but one must enter a state of high alert, as rebound opportunities often arise from despair.
2. Tiered profit-taking strategy
For any cryptocurrency that increases for two consecutive days, apply the '532' rule for tiered profit-taking: reduce position by 50% on the first day to lock in profits, then reduce by another 30% on the next day, leaving 20% as a base position to seek larger market movements. Never allow substantial floating profits to turn into losses.
3. Momentum inertia trading window
When a cryptocurrency experiences a daily increase of over 7% accompanied by a doubling of trading volume, it often has a second surge of momentum in the next morning's session. The key is to enter when it first retraces to the intraday moving average support level, setting a stop loss at the starting point, using minimal risk to fight against inertia premium.
4. Leading coin 'pullback-confirmation' dual-factor model
A truly strong cryptocurrency must simultaneously meet: ① Pullback to the 20-day line key support ② Appearance of a volume-reduced doji or bullish engulfing pattern. It is better to miss the initial surge than to chase after a volume increase.
5. Maximizing capital efficiency with the '3+3' elimination mechanism
For cryptocurrencies that have been in a sideways trend for 3 trading days with an amplitude of <5%, initiate an observation countdown. If they still cannot break through the box in the next 3 trading days, immediately remove them from the watchlist; your attention is always the most scarce resource.
6. Account health warning system
When a single day's loss requires more than three trading days to recover, immediately activate strict risk control: reduce position to 1/3 of normal, and stop opening new positions. This indicates that the current market rhythm is severely inconsistent with your trading system.
7. 'Fibonacci rhythm' of sector rotation
When popular sectors continue to appear on the gainers' list, it is crucial to observe the Fibonacci time windows at 3, 5, 8, and 13. Each node is a moment for capital to reselect its direction and also the best timing for portfolio reallocation and stock switching.
8. Four-dimensional interpretation of volume-price relationship
A true breakout requires simultaneous verification of: ① Breaking through key price levels ② Trading volume reaching 200% of the monthly average ③ Stabilizing three days after the breakout ④ Related sectors forming resonance. Any volume increase lacking any one of these elements is a trap set by the main force.
9. 'Moving average ecosystem' of trend trading
· 3/5/10-day moving averages in bullish arrangement → Short-term assault team
· 20/30-day moving averages inclined at 45° upward → Main force of the wave
· 60/120-day moving averages forming a golden cross → Strategic reserve position
Only when different period moving averages converge upwards is it the golden moment to strike with heavy positions.
10. 'Triple law' of small capital compound growth
For small capital under 50,000 to achieve a turnaround, it is essential to adhere to: ① Single loss not exceeding 2% of total capital ② Only engaging in trades with a win-loss ratio >3:1 ③ Withdraw 50% of profits immediately upon achieving 30% monthly gains. Use mathematical probability to overcome human weaknesses.
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