After many years of deep involvement in the cryptocurrency world, I gradually realized: trends are not for predicting, but for following. True profits come from recognizing trends, aligning with them, and decisively exiting when the trend ends.
Step one: Identify the pulse of the trend
I never rely on a single indicator to determine direction. True trends are revealed through multi-period resonance: when the 4-hour chart and the daily chart are both trending upwards, and key moving averages are in a bullish arrangement, that is a worthwhile upward market to participate in. Conversely, if the larger cycle trend is downward, any rebound in a smaller cycle could be a trap. I often remind myself with a mantra: 'The larger cycle sets the direction, the smaller cycle finds the entry points.'
Step 2: Wait for trend confirmation
Many people's mistake is entering too early. I tend to wait for a pullback opportunity after the trend is confirmed: in an uptrend, the ideal entry point is when the price pulls back to key support levels and shows signs of stopping the decline. This 'second startup' model may miss the lowest point, but it greatly increases the win rate. The market is never short of opportunities; what's lacking is patience.
Step 3: Let profits run with the trend
The core of trend trading is to 'cut losses and let profits run.' My stop-loss is usually set below previous key levels, while taking profit uses dynamic tracking: every time a new high is made, I move the stop-loss up to the new support level. This protects profits while avoiding exiting too early. Remember, pullbacks in a trend are normal; as long as the overall structure is not broken, one should dare to hold.
Step 4: Beware of trend exhaustion
Every trend will eventually end. When there is a decrease in trading volume, momentum divergence, or repeated testing of key positions, I will gradually reduce my position. The most dangerous signal is when market sentiment becomes euphoric: when everyone is talking about 'forever rising,' it often marks the end of the trend. At this point, preserving profits is more important than chasing the last penny.
The most important mindset: self-management in a trend
Trend trading seems simple, but it actually tests human nature.
Years of experience tell me: the trend is the trader's best friend. There's no need to catch every fluctuation; just hold your position steadily within the main trend. The market rewards those who understand how to respect the trend and are willing to be patient.
Let us seek certainty in the trend and remain calm amidst the fluctuations.
