I have been trading cryptocurrencies for 10 years, professionally for 6 years, totaling over 1800 days. From initially entering the market with a capital of 200,000, over the years, I have experienced various pressures, pains, and confusion, ultimately achieving enlightenment, simplifying trading techniques, and managing to withdraw 48 million easily from the crypto space in just three years!
My journey in cryptocurrency trading (Five stages of trading growth)
1. [Entering the crypto space]
When I first got involved in the crypto space, I was just like everyone else, relying on luck to decide which coin looked good and then buying it. I don't know if it was good luck or if new investors have a protective period, but during the first half of the year, my assets grew by more than ten times. At this point, I became inflated with pride!
However, it has been proven that when a person becomes too complacent, it may be the time to stumble. Reality will ruthlessly slap you in the face. When my assets were cut in half in a single order, I realized that the trading market is ruthless, and good luck will not always be by your side!
2. [Learning the techniques]
After the biggest trading loss, I realized that relying solely on luck is not a long-term solution; the goddess of luck will not always be by your side.
At this point, I understood that trading requires solid professional knowledge and analytical skills, so I began to reflect and learn. I read relevant books, became active on various information platforms, sought opportunities and trading insights, and combined them with technical indicators to build my own trading system.
If you are new to the crypto space and are favored by the goddess of luck, this is your best learning opportunity! During the new investor protection period, learn more techniques to enhance your analytical skills.
However, when I felt that I had learned enough techniques, my assets did not experience explosive growth. However, I no longer suffered significant losses and had the ability to counteract risks. Although trading techniques are not always effective, they have given me a deeper understanding of the market, and at this point, I began to search for the true essence of trading.
3. [Enlightenment of the Way]
When I realized that different trading indicators and systems are not the key factors determining profits and losses, I began to pay more attention to the psychology of trading. I found that many times, profits often come from decisiveness and patience, rather than hasty trades and frequent orders. This actually reflects the mindset I had when I first entered the crypto space.
At this time, I understood that predicting the market is incredibly difficult, so we need to become an independent trading system, following our own trading logic. Gradually learning position management and leverage allocation, calculating returns on a monthly basis, and no longer worrying about the gains and losses of individual trades.
4. [Gradually stabilizing]
When you have a clear trading logic and a complete trading system, while following the above principles, you can clearly accept losses and profits. Achieve a situation where you incur small losses while making large profits, becoming a stable trader and investor. At this point, you will gain recognition and respect from others, becoming the 'teacher' in others' eyes.
At this moment, only some black swan events will impact your trading logic, but black swan events are always rare; your own trading logic is something you must adhere to.
5. [Getting the hang of it]
When trading reaches a level of mastery, handling indicators and market conditions becomes seamless. Profit and loss become a given, and emotions gradually stabilize. I have developed intuitive abilities, no longer feeling excitement about trading but instead focusing on continuous profitable outcomes. At this point, I gradually began to resemble a skilled trader, possessing the patience, perseverance, and trading wisdom that surpass most others.
The trading journey requires continuous learning and improvement. From entering the crypto space to mastering it, only by continuously honing your trading system and understanding the art of trading can you achieve stable profits in the market. No one is without losses in trading, but being able to incur small losses while making large gains is our learning objective.
Four major release techniques for trading cryptocurrencies:
(1) Short-term release strategy guidance: Timeliness
If you completely misjudge a wave of market conditions, you should seize the opportunity to exit quickly and adjust your trading direction. This is very important. If you sense that things are going wrong, decisively close your position to avoid further losses from continued one-sided price fluctuations. Cutting losses requires a certain level of wisdom; only by decisively exiting can you protect your principal, and investors should consider comprehensively. Short-term investors in a one-sided market also need to pay attention to stop-loss and take-profit techniques. Sometimes, if you do not take action to stop losses and take profits, the longer you hold, the greater your losses will be.
(2) Long-term release strategy guidance: Patience
When you have identified the major trend (such as a bullish market), you need to stabilize your mindset. In fact, if a position is trapped in a minor trend (where the market has a downward wave), it is possible to take a stop-loss first. Never be too eager to make quick profits; choose to re-enter at a lower price point to earn a certain price difference, which allows for the opportunity to capture profits from the major trend. This is a relatively favorable situation for investors.
(3) Band release strategy guidance: Accuracy
Mastering stop-loss and take-profit strategies for trading cryptocurrencies actually varies from person to person and depends on the time. The band operation method is applicable to various situations of being trapped, but it needs to be used flexibly. It requires everyone to accurately judge the trend, especially in a volatile market. In simple terms, it relies on the fluctuations in coin prices to achieve profit through price differences.
(4) Flexibility in release strategy guidance
Using idle funds to lower costs is also a very good method; as long as operations are done correctly, you can break even when there is a rebound opportunity.
In general, when investing, it is necessary to have reasonable references and a guiding direction, to promptly take profits and cut losses, ensuring that profits are realized. This is a very important investment skill. At the same time, when analyzing market conditions, we should refer to multiple sources and consider both technical and news aspects comprehensively to improve the accuracy of predicting market trends, so we can follow the trend and earn profits.
The basic principles of Dow Theory, combined with the actual situation in the crypto space, can be summarized into six key points.
First, average prices encompass and digest all factors. Fundamentals, policies, news, and capital can all affect supply and demand, and all of this is directly reflected in the market, with the market ultimately absorbing it through price changes.
Second, the market has three trends. Dow classified trends into three categories: major trends, necessary trends, and temporary trends. Major trends are like the tides of the ocean, belonging to long-term trends, similar to the seasonal cycles in the crypto space, where bull and bear markets cycle endlessly. Secondary trends are like waves within the tides, representing pullbacks in the major trend, generally retracing to three critical Fibonacci levels: 38%, 50%, and 62%. Temporary trends are ripples, referring to subtle fluctuations that possess high uncertainty and change rapidly.
Third, the major trend can be divided into three stages. The first stage is the accumulation stage, similar to the negative pole giving rise to the positive. It is said that when the bear market reaches its end, even though everyone is bearish, the price has dropped as much as it can, and the main players begin to accumulate in batches at this time. The second stage is the bull market attack stage, where favorable news begins to appear, and most retail investors with some technical knowledge start to gradually enter the market, leading to a gradual price increase. The third stage is the climax sprint, at which point major media outlets start to flood the market with good news, boldly predicting further price increases. Retail investors actively buy in, and no one wants to sell, all fearing they will miss out on this once-in-a-lifetime opportunity to make money. However, in reality, the main players who bought at the bottom have already started to sell off.
Fourth, various average prices must mutually verify each other. For example, the joint increase of Bitcoin and mainstream coins must exceed the peak of the previous medium trend to be considered the arrival of a large-scale bull market! Similarly, if the joint decrease of Bitcoin and mainstream coins falls below the neckline of the high-level fluctuation phase in a bull market, it indicates a reversal.
Fifth, trading volume must validate the trend. Dow believed that volume is the second most important factor in technical analysis. When prices are moving along with the major trend, trading volume should also increase correspondingly.
Sixth, only after a clear reversal signal occurs can we judge that a given trend has ended. A major trend has inertia and generally continues to move in the primary direction for a while longer, so we must wait for the trend to confirm a reversal. For example, a head-and-shoulders pattern must confirm a break below the neckline to be considered a trend reversal.
Dow Theory is a macro technical analysis system aimed at capturing the most significant movements in the market. Its advantage lies in successfully determining the major trends of bull and bear markets; however, its shortcomings are also apparent, as signals are usually delayed, and it generally misses out on 20%-25% of profit potential.
What helps you make money is technology; what hinders you from making money is mindset; whether you can make money depends on your trading system.
The crypto space talks a lot about techniques; how can one improve their win rate using these techniques?
It is very difficult to achieve 100% profit in the crypto space because the cryptocurrency market is fraught with high risks and volatility.
However, through some technical analysis and market observation, you can improve your success rate.
First, to profit in the crypto space, you must analyze the market.
This includes researching the fundamentals and technical aspects of cryptocurrencies to determine which coins have growth potential and stability.
Understanding the fundamentals of cryptocurrencies includes researching the team's strength, the product, market demand, and competitors to understand the value and future growth potential of the currency.
Technical analysis includes observing price trends, market trends, trading volume, and technical indicators.
Secondly, to profit in the crypto space, you need to grasp trading strategies.
This includes determining the timing, price, and quantity for buying and selling, as well as setting stop-loss and take-profit measures for risk management.
You also need to understand market sentiment and capital flow to adjust your trading strategy and risk management.
Finally, to profit in the crypto space, you need to maintain caution and rationality.
The market is highly volatile, and prices fluctuate wildly, with unexpected situations potentially occurring at any time.
Therefore, you need to remain calm, control your emotions and greed, and not put all your eggs in one basket; diversifying investments is very important.
In general, to profit in the crypto space, you require good market analysis skills, trading strategies, and risk management capabilities, while also maintaining caution and rationality. I hope my suggestions can help you achieve success in the crypto space.
When you trade in the crypto space, here are some detailed analysis results and suggestions to help you improve your success rate and maximize profits:
Fundamental analysis: Before investing in cryptocurrencies, you need to understand the fundamentals of the currency. This includes understanding the team's strength, product, market demand, and competitors.
For example, if a cryptocurrency has a strong team, innovative products, strong market demand, and no significant competitors, then this cryptocurrency is likely to have a good growth outlook. By analyzing the fundamentals, you can understand the intrinsic value and future potential of the currency, which helps you make wiser investment decisions.
Technical analysis: Technical analysis is a very important part of cryptocurrency trading. It includes observing price trends, market trends, trading volume, and technical indicators. Through technical analysis, you can understand market movements and trends of cryptocurrencies, which helps you make more accurate trading decisions.
For example, by observing price trends and technical indicators, you can determine the timing for buying or selling, as well as the price and quantity for buying or selling.
Trading strategy: You need to develop a trading strategy that suits you, including timing, price, and quantity for buying and selling, as well as setting stop-loss and take-profit measures for risk management.
For short-term traders, day trading may be a good option as it allows you to quickly enter and exit the market. For long-term investors, it is advisable to diversify investments and spread risks, such as investing in multiple cryptocurrencies to reduce investment risks.
Caution and rationality: In the cryptocurrency market, price fluctuations are severe; therefore, you need to maintain caution and rationality.
When trading, you should remain calm, control your emotions and greed. At the same time, you should adjust your trading strategy and risk management based on market sentiment and capital flow.
In summary, the above analysis results and suggestions can help you improve your success rate and maximize profits in the crypto space.
However, it is important to remember that the cryptocurrency market is highly risky, and no investment strategy can guarantee profits 100%.
Therefore, it is essential to remain cautious.
I think it makes sense.
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