His words deeply shocked me.
Originally, individual
He once faced liquidation after trading contracts for three days, losing as much as 50 million yuan. This experience was undoubtedly a profound lesson for him.
Looking back at my journey in the cryptocurrency circle, it has also been full of ups and downs. From the initial investment of 50,000 to making millions during the bull market, then back from millions.
My own journey in the cryptocurrency circle has also been full of ups and downs. From millions to now almost reaching a small goal; and now, I am waiting.
The arrival of the next bull market aims to achieve a goal of hundreds of millions.
My cryptocurrency trading method is not complicated but is extremely practical. In just one year, I turned my assets into eight figures. My secret is to only trade one type of pattern, decisively entering when I see an opportunity, and not trading without a pattern.
Over the past five years, I have maintained a win rate of over 90%, thanks to my patience and precise judgment.
If you've been losing money as an old trader, you must read this post. You will definitely benefit immensely from it.
1. Cycle and level.
When you wake up and want to check the market or make a trade, the first task is to determine the cycle. The first question for newcomers entering the circle is how to choose the level and cycle.
Let me tell you the first point: first look at the daily chart. The daily chart at 8 AM includes the entire trading trend of yesterday, whether it closes bullish, bearish, or as a doji. This can help you roughly judge whether the intraday trend today is likely to be bullish or bearish.
After reviewing the daily chart and having a general expectation in mind, I look at the four-hour level. I mentioned during my live stream that the four-hour K-line is the most stable and productive.
The certainty of raw patterns is strongest, meaning you can use your known theories or patterns, indicators, etc., for analysis at the four-hour level.
Misconception: abandon the bad habit of looking at the fifteen-minute K-line.
2. This chart is at the fifteen-minute level. May I ask what help such long upper and lower shadows in K-lines provide in naked K or pattern analysis? None at all.
Technical Indicator One: The extreme overbought and oversold zones of RSI can help you quickly profit in special market conditions, with a profit probability of 75% or higher.
First, let me show you my RSI settings (I don't want to share this parameter because it is useful. After thinking about it, since I'm sharing, I...
Without reservation)
What situations allow for quick profits using the RSI indicator? Extreme overbought and oversold positions. See the chart.
1. When the price is overbought above RSI 70, you need to be aware that it has reached the extreme overbought zone, and subsequent indicators will likely have a correction, with the price showing a downward adjustment.
When the RSI is oversold below 30, you need to note that the RSI has reached the extreme oversold zone, and the indicator will likely rise to correct, with the price showing an upward rebound (note that I said extreme oversold and overbought, not ordinary overbought and oversold). Here, using naked K patterns increases the win rate! It is currently showing an upward adjustment.
2. Technical Indicator Two: Bollinger Bands (BOLL) combined with moving average strategies.
- Here are my parameters for you to see.
3. How to use it or how to operate?
When the overall price is above the EMA200 daily moving average, the outlook is bullish; when the overall price is below the EMA200 daily moving average, the outlook is bearish. In bullish situations, when the price pulls back to the lower Bollinger line, go long; never short. In bearish situations, when the price reaches the upper Bollinger line, go short; never long. See the chart.
The EMA200 daily moving average has been marked; please understand what it means for the price to be overall above the EMA200 daily moving average.
Above or below, the red circle is the overall price, the yellow line is the upper band, and the purple line is the lower band. Only short below the EMA, and only long above the EMA. Be sure to ensure that this indicator strategy is used when the upper and lower bands of the Bollinger Bands are parallel; the win rate is extremely high.
If the opening trend of the upper and lower bands increases, just the volume is not enough.
Volume-price divergence serves as an auxiliary to the previous two methods, or as an aid for bullish or bearish analysis using naked K patterns, but should not be used as a standalone strategy. The first kind of divergence is top divergence, as shown in the figure; when the price rises and the volume decreases, it indicates a bearish outlook. Conversely, when the price falls and the volume gradually rises, it indicates bottom divergence and a bullish outlook. Originally, there were also some profitable strategies using MACD and naked K. Remember, I said these are profitable, not the kind of indicator strategies you see online. I have adjusted these parameters myself; I've used these parameters for many years because I use wave theory. Some people in the square understand it, but not completely or precisely, so I will write an article on wave theory tonight to help you understand my future posts. Therefore, the sharing of MACD strategies and naked K strategies will be posted in a few days.
Returning to the first point about cycles and levels, what advice do you have for today’s intraday operations after looking at today’s daily closing? Think carefully about the hardcore thinking concepts necessary for trading contracts in the cryptocurrency market.
Correctly understand contract trading.
Making money through contract trading is by no means a simple task. First, we need to correctly understand contracts and clearly see the essence of contracts and contract trading. Contracts are essentially leveraged products with a time limit, so they are inherently leveraged. Since they are leveraged, it implies larger returns and risks, and the inherent high-risk, high-reward characteristics of the cryptocurrency market perfectly contribute to the popularity of contract products. Contracts can amplify capital, allowing for large profits from small fluctuations; if done well, one can become wealthy quickly, but if done poorly, one may lose everything. Therefore, in operations that require you to bear the risk of losing all your wealth, the first thing to focus on is risk management, followed by how to obtain profits. Naturally, the essence of contract trading is how to find a balance between risk and expected returns, aiming for higher returns while minimizing risks as much as possible.
However, the truth is simple, knowing is easy, but doing is difficult. In real contract trading, it is much more challenging than analyzing here. Choosing the path of contract trading means you must be clear about the difficulties involved. Continuous persistence is necessary to reap rewards. In the first two to three years of my journey, I was basically in a state of continuous losses from chasing highs and selling lows. I once lost over 100 bitcoins, losing 85% of my capital. Many similar catastrophic incidents have occurred, and each failure is a huge psychological blow. Anyone who has traded contracts must have had similar experiences and feelings; trading contracts is undoubtedly a difficult path. Even if you understand the grand principles, you will often hit walls and incur losses in practice. Therefore, recognize the contract, recognize yourself, keep trying, remain humble in victory and resilient in defeat, and you will gradually achieve rewards.
Three common reasons for losing money on contracts:
1. Heavy mentality for getting rich quickly, excessive greed, high leverage, and not stopping losses.
This should be the primary reason for losing money on contracts. A review of the trading process reveals that most of the money lost by everyone did not come from stop-losses, but from liquidation. Originally, those trading cryptocurrencies want to get rich quickly, and contracts magnify that greed, always wanting to make a big profit in one go, often using 10x or 20x leverage. With such large market fluctuations, not setting stop-losses and being unwilling to stop-loss often leads to missing the best opportunity to stop-loss. When leverage is too high, liquidation is inevitable; if liquidation happens suddenly, no one can handle it. Contracts are leveraged trading, which inherently means profits from additional positions beyond one's own capital, so one cannot be too greedy. A reasonable operation should be to lower the leverage and not take such full positions. I use an all-in mode, only taking a very small portion of coins to trade contracts, with actual leverage between 0.5 to 1.5 times, requiring a fluctuation of 30-40% to result in liquidation. Such large fluctuations are rarely seen in a short time. The leverage of opening an order doesn't matter; reducing actual leverage gives oneself some room for stop-loss, and one shouldn't rush to earn a lot at once. Slow and steady wins the race.
2. Not proactively learning, only liking to follow others' trades or relying on feelings.
Many of our friends have been in the circle for a long time. If you ask them why they want to go long here and short there, they will tell you it's because they saw a certain influencer or because they feel it. This phenomenon is everywhere; capturing a trading opportunity without much thought comes too easily. Of course, this doesn't rule out occasionally making money, but with so many temptations in the market, who knows which time you won't grasp well and will end up losing everything.
Not knowing what MA or MACD is, and being too lazy to learn, has led many to face liquidation multiple times without even knowing what support and resistance are. These are very basic indicators; although technical analysis may not always work, mastering them can be a great trading aid. This will help you react more quickly when significant market turning points occur.
Copy trading is also a very unreliable practice. Opening price advantages, leverage ratios, risk tolerance, stop-loss times, and prices are extremely important.
These are all difficult to control during the copy trading process. If any link cannot be strictly followed, it will lead to different profit and loss results over time, which may even lead to losses. I have also taken friends to trade contracts, and it is very difficult to make them profitable; a slight mistake leads to losses.
3. Not summarizing trades or managing funds. Many people trade after making a profit and feel happy, or feel bad after losing, and then just set it aside. They are too lazy to review and think about why it happened in that situation.
When opening a position, as well as whether this experience can be reused in the future, the scariest thing is the lack of capital management thinking. Holding onto a lucky mentality, liking to go all in, using all funds to trade contracts, once liquidation occurs, there is no chance to turn back.
I know many people who also entered the market in 2014 or 2015 but traded with all their funds, thinking they were highly skilled. In the end, they still faced liquidation and ended up with nothing, only to regret missing the 2017 bull market, returning later only to become the next bag holder.
The above three types are mistakes I made during my trading process, and they are also common issues that everyone encounters in contract trading. Each piece of experience was bought with money, worth its weight in gold. If you want to make money in contracts, you must recognize these essential issues that lead to losses, and then find trading opportunities.
Some rules that should be followed; only by mastering these rules can one truly manage the risks of contract trading well and improve the chances of making money in the contract market.
The bottom line that must be adhered to in contract trading.
Contract trading is extremely risky. The essence of making money under high risk is to manage risks well. This is commonly said as earning more when winning and losing less when losing; this principle is especially applicable to contract trading. Therefore, I will first discuss the importance of risk management in contract trading as a whole, and then separately discuss some important risk management tips.
It can be said that making money in contracts is neither an easy nor a difficult task. Earning is easy once or twice, but the challenge is to earn steadily over the long term. In the market
In front of the market, we are all small traders; we should set lower expectations for ourselves. As long as we make money, that is enough. Don’t pursue win rates or the lowest points.
At the peak, don’t expect to get rich quickly. Opening a position, whether right or wrong, is normal. Don't let this affect your mindset; just stop-loss in time.
If you earn little in one go, then earn a few more times, take some time to accumulate slowly; never be in a hurry. These thoughts are like the sword of Damocles.
The sword of Damocles can bring you potential catastrophe in a certain market situation.
Ultimately, the nature of people in the trading market is characterized by greed and panic. To make money, one must find ways to overcome human weaknesses; one should not be greedy.
Don't be greedy when you shouldn't, and don't be afraid when you shouldn't.
It is important to stick to your own thoughts. The trading circle is still quite small; there are not many competitors. The essential reason you can make money is to persist in your individual thinking. If you go with the flow and follow others' trades, being able to avoid losses is already good; making money is extremely difficult.
Therefore, contract trading must strictly adhere to the trading discipline you set for yourself; do not be greedy or rely on luck. You cannot afford to miss out on opportunities due to a lack of discipline.
One should not be complacent about profits, nor should one be frustrated for missing out on opportunities due to adhering to discipline. Discipline is ironclad; it is the bottom line that must be strictly followed at all times.
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