Perhaps some people will say that short-term trading is speculation! First, I want to say that short-term trading is not speculation; true short-term trading is an investment behavior that masters certain market operation rules and requires strong skills.
And even if it is speculation, we say that essentially there is no difference from investment; both are about buying low and selling high. Whether it is speculation or investment, achieving success requires correctly grasping market trends, investment targets, and investment timing, and one must overcome human weaknesses.
Short-term trading actually tests a person's skills and patience. Those who are proficient in short-term trading must have seen many candlestick charts, studied their trends, and summarized general rules. The rules mentioned here can only be a concept from a probabilistic standpoint; it is impossible to have completely accurate judgments because the entire market operates in multiple dimensions of emotions, information, etc., and the hardest to predict is emotion, so we can only attempt to make rough judgments.
So how to do it specifically? We need to learn to summarize historical trades, identifying the conditions that appeared in historical trading and the subsequent trends that emerged.
What is the best short-term indicator for trading coins to look at for a few minutes?
It is related to the time you plan to hold your position. If it's short-term, say 1 day or a few days, then a 15-minute main cycle is sufficient, with 5 minutes and 60 minutes as assistants, where 60 minutes indicates the trend direction.
If it's for 1 week or a few weeks, refer to daily, weekly, and 60-minute charts, using daily for holding, with 60 minutes as the assistant for entry and exit, and weekly for trend direction.
The holding time should not be self-imposed but should be based on the coin price trend. If entering based on low-cycle reversals, refer to the first group; if operating based on daily reversals, refer to the second group.
Newbie coin trading wave method:
1. Do not set stop-loss and take-profit; hold positions for a long time.
Stop-loss is something every trade must include. If you have time, moving the stop-loss point is also fine, but since it is wave trading — focusing on short-term ranges — do not hold onto positions for too long. If everyone is accustomed to setting take-profit and stop-loss for a long time, they will gradually lean towards wanting every trade to perfectly take profit, which is impossible. Wave trading focuses on profits, just as investment is based on preserving asset value. Successful trading methods are determined not by avoiding losses but by controlling the quality of losses; it depends on whether your loss is worth it.
2. Do not pay attention to fund management and fail to control position size.
Wave trading is not the investment method that makes the most money; during tense market emotions, it is advised to operate with light positions. Heavy positions are not advisable, and it is suggested that newbies start with 1/10 of their position to practice, then increase it, but not to exceed 1/2. Many people, seeing a small profit on their position, begin to take heavy positions, but in comparison, the difference isn't significant; the risks and rewards differ between heavy and light positions, but the actual returns aren't that different, which is not a worthwhile endeavor.
3. Wait for pullback opportunities.
Currently, the digital currency market is a bidirectional market, so compared to other investment markets, the volatility of the digital currency market is greater. Positive news, key position breakthroughs, large transfers, etc., all become forces driving price changes. Therefore, trading in digital currencies requires more speed. Sometimes a pullback refers to the market still being in a range, but other times a pullback marks the end of a wave, at which point one must be keenly observant.
4. Frequent trading due to the T+0 trading mechanism.
T+0 allows investors to trade all day long, increasing opportunities for entry, but the downside is that this trading mechanism increases trading volume and volatility. In such cases, emotional factors are also amplified, and after multiple unsatisfactory trades, it is easy to generate rebellious emotions, similar to women's late-night shopping or buying after a breakup.
There are many ways for newbies to navigate the coin world, and there are definitely a few methods suitable for you now:
You have 1 million yuan in assets and decide to use 700,000 yuan to buy a cryptocurrency.
On the first day, the coin drops by 1%, and you lose 7,000 yuan, but you don't care, believing the coin price will eventually rebound.
On the second day, the coin price drops another 3%, and you lose nearly 20,000 yuan, still confident it will rise again.
On the third day, the coin price rises by 2%, and you recover about 10,000 yuan of losses, feeling slightly better and thinking everything is under control.
On the fourth day, the coin price suddenly plummets by 20%, you lose 140,000 yuan, and you start to feel anxious, hoping for a rebound the next day.
On the fifth day, the coin price rebounds by 5%, and you breathe a sigh of relief, thinking there are still patterns to follow in coin trading.
On the sixth day, the coin price rises another 1%, although the increase is small, at least there is hope of breaking even, and you feel satisfied.
On the seventh day, the coin price rises again by 1%, and you start to look forward to future trends.
On the eighth day, the coin price continues to rise slowly, but you remain optimistic, believing there will be a day when you break even.
On the ninth day, the coin price suddenly drops by 30%, and you start to panic, questioning whether you chose the wrong coin.
On the tenth day, the coin price drops another 10%, and you feel angry and disappointed.
On the eleventh day, the coin price enters a sideways consolidation period. You see someone online calling this a bottoming signal, believing the market is accumulating momentum, firmly convinced that the coin price will rebound soon.
In the following week, the coin price continues to consolidate sideways. You go online to learn more about cryptocurrencies, believing this is the 'main force accumulation stage', so you continue to hold your coins.
A month later, the coin price not only fails to recover but continues to drop by 20%, and you become numb, thinking that if you can just break even, you decide to withdraw your funds and distance yourself from cryptocurrencies.
But things did not go as planned, and the coin price continued to fall. At this point, you finally understand the concept of 'stop-loss'. You struggle internally, unsure whether to liquidate or continue holding.
At this moment, a friend tells you that a new coin has surged by 200%, and shares their 'leading strategy' with you. You believe it, sell the coins in your hand, and tell yourself to wait until you make enough profit from the new coin.
A guide for newbie traders in cryptocurrency: How to avoid losing money?
I was once a newbie too, rushing into the coin world, chasing highs and cutting losses, only to find that the courage and luck I borrowed led to losing the hard-earned profits.
I also followed so-called teachers in the coin world to do contracts and learn technical analysis, and at very crucial points, I followed the teacher to short Bitcoin contracts, resulting in almost complete loss! I eventually realized that choosing the wrong guide and not systematically learning spot trading led me down many unnecessary paths! Without solid professional skills and integrity, and not mastering the rules of the coin world, it is very difficult to achieve sustained and stable profits through trading.
After many twists and turns, I ultimately chose to systematically study natural trading theory, combined with data analysis in the coin world, and established a three-dimensional trading system suitable for myself, which I am continuously improving and practicing.
Before the bull market arrives, in order to help more new entrants to the coin world avoid the mistakes I made, and to seize the once-in-a-lifetime opportunity of the bull market, I have specifically compiled twelve guiding principles for newbie coin traders, hoping to help them grasp some rules and principles of trading, avoid pitfalls, and accelerate achieving stable profits.
To get back on track, I urge newbie traders to carefully read, understand, and practice the following trading principles, and feel free to DM me on Twitter for communication.
1. Only engage in spot trading, not contract trading.
Spot trading is a steady stream. Contract liquidation can wipe you out. Newbies entering the coin world often desire to get rich overnight, their mindset restless, lacking professional skills and guidance. They see others using leverage to trade contracts and quickly earn large sums, so they also jump into high-leverage contract trading, resulting in quick profits but also quick losses. Ultimately, the result is often a total loss of capital or even bankruptcy, with confidence severely shattered. Some financial experts, due to high leverage in contracts, end up in massive debt after liquidation, and news of jumping off buildings after such events is not uncommon. Contracts are a zero-sum game; compared to spot trading, they require even more professional skills and good integrity. If newbies can't even handle spot trading well, they will have no chance of winning in the fierce competition of contract trading. They must stay away from contract trading and focus on proper spot trading.
2. Invest with spare money, do not borrow to trade cryptocurrencies.
Trading coins is 30% technology and 70% mindset! If newbies use their spare money to trade coins, getting stuck or losing a small portion of funds in the short term will not affect subsequent trading opportunities, ultimately allowing them to weather the storm and seize better trading opportunities. In contrast, if you use borrowed funds to trade coins, you will be highly tense and anxious, easily becoming impulsive; approaching trading with such a poor mindset makes it very difficult to make sustained profits. Even if you occasionally encounter good coins and profits, you will ultimately not escape disaster.
3. Follow the trend and be cautious with counter-trend trades.
Following the major trend solves the directional issue of trading; countering the minor trend solves the entry point issue.
We all know that swimming downstream is much easier and faster than swimming upstream. Trading cryptocurrencies should be done in accordance with the trend. When the market's mid-to-long-term trend is upward, buying mainstream coins at low points will make money; even chasing the rise to buy mainstream coins can yield profits. Conversely, if the market's mid-to-long-term trend is a downward trend, even buying at low points constitutes counter-trend trading, and if you cannot withdraw in time, you will ultimately incur heavy losses or become trapped.
Therefore, when trading cryptocurrencies, one must comply with the mid-to-long-term trend direction of the market. During a bull market, one should dare to take heavy positions in the direction of the trend; during a bear market, one should learn to stay out and rest. This is the principle of following the major trend. So, what is the principle of countering the minor trend? When the major trend is upward, one should dare to seek a good entry point to buy low during the short-term downward adjustment period of the coin.
4. Enter on the right side and exit on the left side.
Entering to buy coins can be divided into left-side buying and right-side buying, while taking profit by selling can also be divided into left-side selling and right-side selling.
5. Trade new coins, not old ones.
The coins on exchanges can be categorized as new coins, relatively new coins, and old coins. Coins that have just been listed on an exchange are called new coins; those listed for a few months are relatively new coins; and those listed for more than six months are old coins. Traders with larger capital prioritize allocating mainstream coins, such as Bitcoin, Ethereum, and SOL. Traders with smaller capital, including newbies, should focus on greater profit opportunities in new and relatively new coins.
Why should one trade new coins instead of old ones? Because old coins, unless there is a new technological breakthrough or a new narrative driving them, will not see new speculative opportunities. Otherwise, investors are well aware of those coins, and there are no new stories to tell. Moreover, they have already been speculated upon multiple times, and the locked positions are quite serious, making it challenging for major institutions to push them up and attract market capital.
New and relatively new coins have new technologies, new tracks, new narratives, and new token models, making it easier to attract investor attention. When new and relatively new coins complete their bottoming and successfully break upward, there are fewer locked positions, allowing major institutions to push them up more smoothly. Once they break through historical highs, the potential for growth is significant, and the opportunities and profit margins for making money will also be greater.
Based on my long-term observation of new coins being listed on exchanges, I have summarized a basic six-step operational model that new coins typically follow:
1) A few days after listing, there is a spike followed by a drop;
2) Continuous decline and probing the bottom, severely ignored;
3) Continued bottoming for several days, beginning to warm up;
4) Gradually increasing and exploding, attracting attention;
5) Coin prices reaching new highs, with the market going crazy;
6) Institutions distributing shares, leaving a mess behind.
Some newbies choose to chase and buy as soon as new coins are listed on exchanges, which poses a high risk of being trapped and losing money. Buying when the coin completes its bottoming and successfully breaks upward in the third stage is a more certain and safe right-side entry method, which is more suitable for newbies and conservative traders. Personally, I also choose the right-side entry method for buying coins.
The above is the first part of the guiding principles for newbie traders in cryptocurrency. I will continue to work on the second part, which will be published on Twitter, and the outline is as follows.
Guiding Principles for Newbie Coin Traders (Part Two) Outline:
7. Half-position entry trading principle
8. Five key entry points buying principle
9. Set stop-loss to protect principal principle
10. Avoid frequent and impulsive trading principle
11. Avoid short-term trading in wave trading principle
12. Persist in learning and integrating into excellent teams principle
In the past few days, I have been preparing for the upcoming godly order layout!!!
Comment 8, hop on!!!
Impermanence brings impermanence brings impermanence!!!
Important things should be said three times!!!
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