I really feel like it’s a compass, guiding me not to get lost in the complex market of cryptocurrencies. This set of trading logic covers principles, mathematical laws, reasons behind rises and falls, strategies, and methods, ultimately drawing conclusions, with every step tightly connected. Understanding it allows one to earn steadily.
I think the root of trading may trace back to that ancient philosophy of the (I Ching). 'The way is the interplay of yin and yang.' Spot trading is like yang, while futures trading is like yin; rising is yang, falling is yin; going long holds yang, going short holds yin. The fluctuations of rise and fall are interdependent and interwoven, forming the chess game of the market. The changes in rise and fall can be divided into two types: trends are like a rushing river, with inertia leading to continuous rises or falls; mean reversion is like an invisible hand, pulling prices back when they deviate from normal values. These two intertwine, making the market complex and interesting.
The mathematical laws are also quite peculiar. 'Three-Five-One Change' suggests that the market will change after several rounds, 'Magical Nine Turns' uses numbers to predict reversals or continuations, 'Twelve News Hexagrams Cycle' seeks turning points based on time, and 'Golden Ratio and Fibonacci' often serves as support and resistance, helping me to make precise moves. These tools indeed have a flavor of metaphysics blended with mathematics.
What’s behind the rise and fall? Capital flow is the main force; when big money comes in, trading heats up, and prices soar; supply and demand are fundamental; when supply exceeds demand, prices fall, and when demand exceeds supply, prices rise; inventory changes are also crucial; high inventory may lead to price drops, while low inventory may push prices up.
How to choose a strategy? If you want to follow trends, you must 'act in accordance with the trend and seize opportunities.' Grasp the trend early to profit from waves, but keep an eye on emotions and supply-demand; if the market reverses, run quickly. To play mean reversion, you should ‘not be the first, but take advantage of the latecomers,’ don’t rush to guess tops and bottoms, wait for trend reversals or breakout from ranges to act, which minimizes risk.
To sum it up, I believe the trading logic has three hard truths: First, capital safety is paramount; don’t play too aggressively, leave a good retreat to rise again; second, seizing opportunities is crucial; timing of entry and exit must be precise, with a profit-loss ratio of at least 3, preferably above 5; third, don’t fixate on small gains, dare to bet on larger trends when having floating profits, seeking steady progress.
In summary, this set of logic is like a whole; principles, laws, reasons, strategies, and conclusions are connected in a line. Understanding it allows one to swim steadily in the ocean of cryptocurrencies and earn profits comfortably.