I rely solely on these 3 iron rules and 4 signals to bottom-fish without falling into pitfalls.
During this wave of cryptocurrency market pullback, are there people getting up at three in the morning to check K lines, watching their accounts turn green, their hands shaking and wanting to click 'sell'? Stop! Quickly press down that finger that wants to cut losses!
As someone who has been through the cryptocurrency world for 8 years, going from 50,000 in part-time delivery to 9 million, and who often lays back in Dali drinking tea and watching the market, I dare to say: pullbacks are never the end of the scythe harvest, but an opportunity for smart people to pick 'golden chips'! Those who panic and make chaotic operations fundamentally don’t understand the underlying logic of the market — today’s article is all based on countless pits I’ve stepped into and real money I’ve lost, summarizing practical knowledge, from mindset to skills to coin selection, all laid out clearly for you. After reading, you’ll at least avoid 3 years of detours, and newbies can just save and follow along!
First, introduce myself to avoid being accused of nonsense. I am naturally rebellious, and after graduating from university, I never attended a job fair. I dived into the cryptocurrency world with a capital of 50,000 yuan saved from delivering packages and doing part-time jobs. While others were busy buying houses and cars as 'necessity slaves,' I rented a small courtyard in Dali, living on 1,500 yuan a month, drinking tea, watching the market, and making trades — it's not that I'm non-mainstream, but I understand too well: for ordinary people, breaking the cycle of the nine-to-five dead salary, the cryptocurrency market is indeed one of the few fast tracks, but the premise is that you must understand the rules and know how to judge, rather than blindly chasing prices like a headless fly, ultimately getting educated harshly by the market.
First, overcome the mindset barrier! 3 'trading iron rules' are more effective than any indicator.
I’ve seen too many retail investors fall; it’s not a lack of skills, but their mindset collapses first. Today, let’s first pass the mindset barrier before talking about making money — these 3 iron rules are lessons I learned from losses; if you can’t remember them, write them down in a notebook:
1. Don’t be the 'drama queen' of the trading world! Be honest about losses.
Many people show off their profits when they make money, but when they incur losses, they delete the software and play dead, as if not seeing the losses equals not losing? I also made this mistake in the early days; after losing 20,000, I directly uninstalled the app, and six months later, looking back, I stepped into the same pit twice again, and I lost 50,000 before waking up!
Later I realized: losses and profits are essentially 'twin brothers' of trading. If you can’t even face losses, how can you summarize experience from them? Now, I keep a 'trading journal' for every transaction; when I make a profit, I analyze what the logic behind the profit is and which signal was effective; when I lose, I review whether it was a wrong position or a misjudgment of the signal — this is real 'trading growth,' not relying on luck to gamble.
2. Give yourself a 'trading safety cushion'! Following the rules prevents loss of money.
Many people place orders based solely on their mood: seeing others flaunt profits, they follow suit; seeing the market drop, they panic and cut losses. This isn’t trading; it’s clearly giving money to the market! I set 3 strict rules for myself, and I’ve never broken them in 8 years:
Absolutely do not touch tracks you do not understand (no matter how much others hype them);
Set a stop loss before entering the market, and never hold on to the fantasy of 'waiting for a rebound';
Do not exceed 10% of the total capital for a single position, and do not heavily invest in any target, no matter how optimistic you are.
Just like wearing a seatbelt while driving, these rules may seem troublesome, but they help you safeguard the bottom line of your capital — in the cryptocurrency world, as long as you have capital, there will always be opportunities to wait for the market to come; if your capital is gone, even if it skyrockets later, it has nothing to do with you.
3. Don’t be a 'perfectionist investor'! Don’t be greedy for extreme points.
There are always people fantasizing about buying at the lowest point and selling at the highest point. I advise you to give up this unrealistic fantasy as soon as possible! Last year, when the market was good, there was a target I could have earned 20% more, but I decisively sold when I reached my preset take-profit point, and people around me said I was silly. Three days later, a pullback came, and they all got stuck at the top, while I was already holding profits ready to bottom-fish.
Remember: don’t be greedy for extreme points; you can catch most of the market. Those who always want to earn every last penny often end up unable to protect their capital. This isn’t conservatism; it’s a smart survival rule in the cryptocurrency world — what we want is steady profits, not a gamble for excitement.
Second, the key to bottom-fishing during the pullback period! 4 'turning point signals' to accurately judge the timing of entry.
With a stable mindset, the next step is hardcore practical knowledge: how to judge when to enter during the pullback period? Guessing definitely doesn’t work; you need to look at the solid turning point signals. These 4 signals are ones I have verified countless times in real practice, ten times more practical than those flashy indicators, and newbies can understand them:
1. When the market's 'old rules' are broken, be alert to a trend change.
This is the most practical trick in Dow's theory, simple enough for elementary school students to understand: the market continuously raises the low points and high points, which is the healthy rising 'old rule'; conversely, if the low points keep getting lower and the high points keep getting lower, it is the downward 'old rule.'
If one day the market suddenly doesn’t follow the routine — the highs don’t create new highs, and the lows don’t create new lows, it indicates that this 'old rule' is about to be broken, and there is a high probability of a trend change! For example, during this pullback, I noticed that the previous rising 'old rule' was broken, so I reduced my position by half in advance. Now that the market has dropped to an appropriate level, I have the confidence to slowly bottom-fish.
2. When a long doji star appears, don’t randomly short!
A doji star itself is a 'direction selection signal,' but it doesn’t necessarily mean it’s a turning point. I summarized two situations, remember not to fall into the pit:
If a small bullish line follows a doji star, don’t rush to short; it is likely a 'continuation signal,' and the market needs to oscillate for a few more days, so observe further.
If a large bearish line directly follows a doji star, or if there is a bearish gap down, then the position of this doji star is a clear turning point, so quickly avoid risk and don’t stubbornly hold on.
Additionally, combining important data from the day can increase accuracy — for example, if there are major positive/negative news accompanying it, the credibility of the signal doubles directly.
3. Large bullish/bearish lines need to distinguish 'true or false breakouts.'
Many people go crazy when they see a large bullish line, and panic-cut when they see a large bearish line; it’s too rash! Here’s a tip for making judgments:
If the market has been rising for a long time and suddenly pulls a large bullish line at the top, it is highly likely the 'last carnival' — the bullish chips are almost used up, and raising the price to offload attracts the following market.
How to determine true or false? Look at the subsequent 2-3 K lines: if it quickly engulfs more than two-thirds of the large bullish line, it is basically a top signal; if it only engulfs a small part, then look at the support level below. If the support is not stable, do not enter the market.
Conversely, a large bearish line at the end of a pullback may also be a 'false breakout.' If it is quickly recovered by a bullish line afterward, it is an excellent bottom-fishing signal — don’t be scared by the surface drop!
4. Pay attention to when the moving average 'breaks,' but don’t be superstitious.
Moving averages are like the 'lifeline' of the market; generally, the market will oscillate around the moving averages. If the market consistently stays above the moving average and suddenly breaks below it, there is a high probability of a corrective turning point; I usually use a combination of short-term and long-term moving averages to judge. For example, if the short-term moving average is always above the long-term moving average and suddenly forms a death cross, and the K line is pressed below both moving averages, this is a reliable signal to reduce positions.
But be aware: moving averages can also give false signals! Be sure to combine them with market news and the 3 signals mentioned earlier for confirmation; don’t make judgments based on a single indicator — in the cryptocurrency world, 'multiple signal resonance' is the most reliable.
Third, the logic for selecting coins during the pullback period! 6 dimensions to filter potential targets that can double.
The pullback period is not about not buying; it's about knowing how to buy! Those who say 'stay in cash during the pullback period' have not found the correct coin selection method. I filter potential coins from hundreds of targets based on these 6 dimensions, with a hit rate of at least 80%. Newbies can directly copy this:
1. Market value should be low, but not too low.
For public chain projects, the total market value is best below 50 million; for application projects, it should be below 5 million — projects with too high a market value have limited upward potential, and doubling is as difficult as climbing to the sky; those with a low total market value, as long as the project is valuable, have great potential for explosive growth later, after all, project parties do not need to rely on short-term harvesting to make money; the motivation for long-term value return is stronger.
2. The ceiling of the track must be high.
Do not choose projects in obscure tracks with no practical use! Choose those that can solve real problems and have the potential to reach valuations over 1 billion USD in a bull market — such as the current smart computing power, more secure decentralized infrastructure, and applications across the metaverse, AR, and other fields. These are all long-term valuable tracks, and pullbacks are opportunities to pick up bargains.
3. Look for 'ignored' dark horses.
The projects that are being hyped across the internet open high at the market start, and the valuation has already been inflated to the sky; wanting to double is harder than climbing to the sky! The real dark horses are found in places that require cross-chain or complex operations to buy — many newbies avoid them because they find it troublesome, not realizing that high thresholds are the filter for 'following the herd.' The few doubling projects I bought back then were obtained after trying cross-chain several times; at that time, not many people paid attention, and later they skyrocketed!
4. The timing of going live matters.
It’s best to select projects that went live at the end of a bull market or the beginning of a bear market, which have undergone 6-12 months of washing — the longer the washout period, the more concentrated the chips will be, making it easier to rise later. Moreover, the circulation rate should be greater than 50%, so that it won’t be randomly controlled by the project party, ensuring higher safety.
5. The team and endorsements must be reliable.
Founders should ideally have recognition in the industry and successful case studies; it’s even better if they have endorsements from well-known investment institutions. The financing amount and valuation also need to be considered — good public chain projects generally won’t have low valuations, and those with valuations in the tens of billions often have stronger technical capabilities and financial support; those with unclear backgrounds and no endorsements should be avoided, as they are likely air projects.
6. Only choose the 'dragon one' of the track.
In the same track, only choose the strongest one; don’t choose the 'dragon two and dragon three' that follow the trend! For example, in a certain hot track, if dragon one rises 50%, dragon two might only rise 20%. During the pullback, dragon two will drop harder and rebound slower. I have always selected targets with the mindset of 'better to be the head of a chicken than the tail of a phoenix' — dragon one's ability to resist risks and potential for growth is always the strongest in the track, which is key to reducing risk.
Finally, let me say something from the heart.
There has never been a guaranteed profit in the cryptocurrency world, but there are techniques to 'avoid pitfalls.' I went from 50,000 to 9 million, not by luck, but by relying on the iron rules, signals, and coin selection logic I summarized over the past 8 years. Pullbacks are not scary; what’s scary is when you panic, cut losses at the floor, and then watch others pick up cheap chips.
Next, I will continue to share my real-time operations and potential targets, such as the 3 dark horses I am currently heavily invested in that meet the above 6 dimensions. I will slowly break down their logic. Follow me, and next time there is a pullback, you won’t panic anymore; follow the veteran and pick up bargains!