I am 38 years old this year, having entered the cryptocurrency space at 25.
Starting my cryptocurrency trading career, by 2024-2025, my assets successfully leap to eight figures.
Looking back over the past decade, I have almost never fallen into those business disputes with back-and-forth arguments, which has reduced my worries significantly. It is precisely because of this that I have the leisure and patience to carefully summarize the insights I have gained over the years. In my view, trading cryptocurrencies is fundamentally about mindset; technique is secondary.
Next, I will share my practical experiences with everyone without reservation.
My cryptocurrency trading strategy consists of just four steps, very simple but incredibly effective.
Step 1: Choose a cryptocurrency Open the chart at the daily level and only select cryptocurrencies with a MACD golden cross, prioritizing those above the zero axis, as this is the highest success rate condition!
Step 2: Buy Signal Switch to the daily chart and focus only on one moving average—the daily moving average. The rules are simple:
• Hold online: Buy and hold when the price is above the daily average line.
• Sell offline: Sell immediately when the price falls below the daily moving average.
Step 3: Position Management After buying, observe the price and trading volume:
If the price breaks above the daily moving average while the trading volume also stabilizes above the daily moving average, buy with all positions.
Selling strategy: • If the increase exceeds 40%: sell 1/3 of the position. • If the increase exceeds 80%: sell another 1/3 of the position. • If it falls below the daily moving average: liquidate all remaining positions.
Step 4: Strict Stop Loss The daily average line is the core of our operation. If the price suddenly falls below the daily average line the next day, regardless of the reason, you must sell all positions without any hesitation!
Although the probability of breaking below the daily average line through this screening method is low, we still need to maintain risk awareness. After selling, just wait for the price to stabilize above the daily average line again before buying back.
This method is simple and easy to learn, making it very suitable for investors who want to profit steadily. Remember, the key to success is to strictly execute every step without being swayed by emotions!
Essential for cryptocurrency beginners: Identifying trends: How to recognize swing highs and lows, which is also the core wealth secret behind my monthly income in the seven figures and annual income in the eight figures.
Without further ado, let's get straight to the point!
Today, I want to introduce how to identify swing highs and lows, which is composed of one sentence after another using Chinese characters. Once you grasp swing highs and lows, you can understand a conversation and read a story.
The market progresses in a wave-like manner, but at any given point in time, the seemingly chaotic market has inherent rules. Among them, the most important point is to distinguish between the current market's primary and secondary trends, in order to prepare for entering the primary trend at the end of the secondary trend. This is also the essence of every story.
Through today's article, I hope we can learn the following content:
◐ How to identify swing highs and lows?
◐ What is the use of swing highs/lows in determining the strength of trends?
◐ How to determine the primary and secondary trends in the market?
◐ How to determine whether the trend's momentum is strengthening or weakening?
◐ How to identify swing highs and swing lows?
How to identify swing highs and lows?
A swing high or swing low typically requires at least 5 candlesticks. The middle candlestick (that is, candlestick 3) must be higher or lower than the two candlesticks before and after it. For swing highs, ideally, the high and low points of the previous two candlesticks gradually rise, while the high and low points of the subsequent two candlesticks gradually fall. Conversely, this would indicate a swing low.
In the image below, we use HH and HL to denote higher highs and higher lows, and LH and LL to denote lower highs and lower lows.
However, in some cases, the high points or low points of two adjacent candlesticks may overlap. In this case, we need to observe one more candlestick to determine whether this can be identified as a swing high or low, for example, in the situation shown below:
Although this method can better define highs and lows, the price may form multiple such highs and lows as it advances in a wave-like manner, but not every high or low is a swing high or low. In the image below, after a brief pullback, the price returns to an upward trend and breaks through the previous high. At this point, point A is referred to as a swing low. After rebounding for a while, the price again declines, forming new lows at points B and C, and then rebounds again. Here, point B is an ordinary low, not a swing low, but C and A together form a swing low.
Let's further break down this chart. If the price forms a low point near point C, can we confirm that point C is the swing low?
The answer is no, because our confirmation of swing lows is based on the premise that the previous key high point has already been broken. For example, in the situation below, if the price forms a low point D before rebounding and breaking through the previous high, then C is not a swing low. On the contrary, the swing low is D.
How to identify that a high point has been broken?
After mastering the definition of swing highs and lows, we can delve into the candlestick chart to find swing highs and lows.
This involves a key point: how to determine that highs and lows have been broken?
In fact, I have already discussed various methods in previous articles, such as breakouts at high points within the FVG, or trend behavior occurring after breakouts (where the high and low points of two consecutive candlesticks both rise or fall).
Here I introduce the third method: whether the price can break through with a complete candlestick. The image below is the rebar futures continuous contract; point D confirms the high point of this swing at point B.
Please note that the method for identifying breakouts here is only for judging swing highs and lows. Even when the price meets the breakout requirements, it does not mean that it will subsequently plunge or rise dramatically, because the price always progresses in a wave-like manner. After forming swing highs and lows, the price may still experience a reverse correction.
Determining primary and secondary trends and their intensity through swing movements
After understanding swing highs and lows, we can then assess the current price's primary and secondary trends. We can approach this from two aspects: slope and candlesticks.
At the slope level, taking an upward trend as an example, when the trend is steep, it often completes a rapid rise within just a few candlesticks, which is usually the main trend. In contrast, the secondary trend is relatively flat and usually completes a small pullback over multiple candlesticks. At the candlestick level, still taking an upward trend as an example, when the strength of the bullish candlesticks is strong, numerous, and interspersed with few bearish candlesticks, the upward trend is the main trend.
Conversely, if the bearish candlesticks are strong and numerous, then the downward trend is the main trend. After understanding the primary and secondary trends, we can confirm trend momentum strength using swing movements.
Before this, we need to understand a concept: what is the strength of trend momentum?
I will use the two images below to introduce the strength of trend momentum and the changes in momentum.
So how can we use swing highs and lows to judge the strength of trend momentum? Here we can compare rising swings with rising swings, and rising swings with falling swings to determine whether the trend is accelerating or decelerating.
Next, we can separate the rising swings and falling swings, and we can find that the slope of the rising swing is gradually slowing down, while the slope of the falling swing is becoming steeper.
From the two charts above, we can see that the momentum of the upward trend is gradually decreasing, while the momentum of the downward trend is gradually strengthening. This situation is often a signal that the upward trend is about to reverse into a downward trend. The image below is a practical candlestick chart; comparing the slopes of two rising swings shows that the slope is slowing down, and the momentum of the upward trend is declining.
The image below is another practical candlestick chart. By comparing the rising swings and falling swings, we can find that the slope of the rising swing is slowing down while the slope of the falling swing is becoming steeper, indicating that the current trend is dominated by the downward trend.
In addition to starting from the slope of the swings, we can also combine what was discussed in the previous article to approach it from the candlestick perspective. First, we look at the length of the candlesticks. When the candlesticks in the rising swing become longer, it is a signal that the trend is accelerating; conversely, if the candlesticks become shorter, it indicates that the trend is decelerating.
Taking an upward trend as an example, if the bullish candlesticks become larger and larger, then the upward trend is strengthening. Conversely, when the candlesticks suddenly shrink after becoming larger, it may indicate that the trend is slowing down. Furthermore, we can observe the strength of the trend by comparing the space and time of candlestick movements. When the price moves a large distance in a short time in one direction, that direction's trend is likely the main trend or that trend is strengthening.
Taking an upward trend as an example, when the price can usually recover the pullback of the previous seven or eight candlesticks within two or three candlesticks, we say that the upward trend is still the main trend. Of course, if the number of candlesticks needed to recover losses increases, then the upward trend may be gradually weakening. Conversely, it is strengthening.
In the cryptocurrency space, it's essentially a contest between retail investors and market makers. Hello everyone, I am Guayan. If you don’t have cutting-edge news or firsthand information, you can only be cut! Want to strategize together and harvest from the market makers?
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There is a saying I strongly agree with: the boundary of knowledge determines the boundary of wealth; a person can only earn wealth within the boundary of their knowledge.
Your mindset in trading cryptocurrencies must be good. Don't let your blood pressure skyrocket during a crash, and don't become complacent during a surge; securing profits is crucial.
For those with limited resources, being steady and grounded is an unbreakable way to survive. Good luck!