After thinking for a long time, I decided to share my short-term trading skills which enabled me to start from 50,000 yuan in the cryptocurrency circle and make 13.98 million yuan in just two years!
If you are losing money now and want to take up stock trading as a second career in the future, please read this carefully. You will definitely gain something. I suggest you save it!
From this, I have come to a deep conclusion that anything that is written truthfully about what has happened to oneself must be full of vitality, regardless of whether the text itself is beautiful or not. I would like to thank the thousands of readers who have left me sincere messages and blessings. For this, I would like to dedicate the cryptocurrency words that I have accumulated over the years to everyone.
I sincerely suggest that both newbies and veterans need to read the article I wrote today. After all, it must be of great help to you. I went from huge losses to financial freedom, and now I have a 2,000-square-meter villa, a Land Rover and a small Rolls-Royce in Hangzhou!
Shengge's 10 years of experience in cryptocurrency trading tells you that if you don't understand the "trading level and cycle", don't enter the market! Otherwise, you will definitely lose money! (with illustrations)
Too many people have studied trading for many years but still fail to achieve ideal results. Many times, they fail because of the problem of "trading level and cycle".
There is a line in A Dream of Red Mansions: "Even if there are three thousand rivers, I only take a scoop to drink", which means: "There is a lot of water in rivers, lakes and reservoirs, but I only take a scoop to drink", reminding future generations that they may encounter many beautiful things in their lives, but it is enough to grasp some of them with all their heart, keep a clear head, and pursue what their heart really needs.
The same is true for our transactions.
I have said this many times in class: "The issue of transaction levels can be understood but not explained. Once you understand it yourself, it is actually very simple, but it is not easy to explain it to others."
Until I came across these pictures:
Line chart of average temperature in Beijing for each month in 2023 (Figure 1)
Line chart of the extreme maximum temperature in Beijing in each month in 2023 (Figure 2)
Line chart of the extreme minimum temperature in Beijing in each month in 2023 (Figure 3)
Beijing is a city with distinct four seasons. Taking 2023 as an example, the average temperature in Beijing in January is -2.5℃, which is a very normal temperature for winter. However, on one day in January 2023, the highest temperature in Beijing reached 14℃, and on another day, the lowest temperature reached -16.7℃.
Suppose there is a construction worker named Zhang San in Beijing, and his working hours are from 01:00 to 09:00 in the morning. Because he works outdoors, he has to keep warm when moving bricks in January, wrapping himself in three layers of clothes like a dumpling. After all, -16.7℃ is no joke. But if his co-worker Li Si works from 09:00 to 17:00, then maybe just a cotton jacket will be enough.
So the question is, who is more resistant to cold, Zhang San or Li Si? Who is more stupid? Who has a more comfortable work experience?
Is there no standard answer? No right or wrong, good or bad? So many times, many things are not black and white, and we cannot talk about right or wrong without considering the background. Without investigation and research, we have no right to speak.
If we consider a year in Beijing as a large cycle, and a month, a week, and a day as smaller cycles, the mainstream trend of the large cycle (a year) may be very obvious, such as spring after winter and autumn after summer. However, in smaller cycles (a month or a week), anti-seasonal phenomena may occur, such as sometimes it snows suddenly in summer and the sun shines brightly in winter.
This is like the trend of different cycles in the trading market. The dominant trend of the large cycle is very obvious, but different trends may appear in the small cycle. What we need to do is to determine the cycle that suits us, clearly position each of our transactions, and "enter the market when the sun just rises and exit the market when the storm comes", without greed, attachment or fear. This is "I only take a scoop of water from the three thousand rivers".
Okay, now that the principle is clear, how do we put it into practice in trading?
Let’s first think about three questions:
“What is a trading cycle?”
“How do I choose a trading period?”
"Which trend should I follow?"
Let’s first talk about what is a trading cycle?
For any market K-line chart, in order to facilitate observation and research of the market performance in different time periods, we divide it into different levels, or cycles, based on "high opening and low closing". For example, the commonly used ones are "daily chart", "4-hour chart", "1-hour chart", "15-minute chart", "5-minute chart", "1-minute chart", etc. Based on our discussion of the four seasons above, we know that different time levels will definitely have different market performances.
For example, on the daily chart of Rock Sugar Orange, we currently see a very clear bullish trend (Figure 1)
(Figure 1: Daily moving average bullish arrangement)
But when we open the 4-hour chart, we see another period of oscillation (Figure 2)
(Figure 2: 4-hour chart moving average entanglement)
When we open the 1-hour chart, we see another bearish trend (Figure 2)
(Figure 3: 1-hour chart, moving average is in a short position)
If I ask you right away: Should I go long or short now? Is it right to go long or short? How would you answer?
Do you feel like swearing?
“How the hell should I know! You don’t even tell me which cycle you want to focus on, and you don’t tell me the background of the matter, how should I know whether to short or long?
Therefore, the so-called trading cycle is the longest period of time you watch the market, your entry period, your analysis period, the period when you set the take-profit, the period when you set the stop-loss, and the reference period when you manage orders...
To put it bluntly, the trading cycle is everything to you! It is very important to find a trading cycle that suits you!
So how do you choose a trading cycle that suits you?
It's very simple. Just ask yourself a question: "How often do I check the market?"
If the nature of your work requires you to only look at the K-line once a day, then the "daily chart" is the trading cycle that suits you;
If you can view the K-line every 1 hour, then the "1-hour chart" is the trading cycle that suits you;
If you can view the K-line every 5 minutes, then the "5-minute chart" is the trading cycle that suits you;
......
If you are a full-time trader and you can sit in front of the computer screen every day, I also suggest that you only choose one time level you like as your trading cycle. For example, if you are a firm day trader and never allow yourself to hold positions overnight, then the 5-minute chart is very suitable as your trading cycle; if you are willing to accept larger retracements and longer holding periods in order to gain greater profits, then 1H and 4H are very suitable for you.
Then comes the third question, “Which trend should I follow?”
We know that the market has inertia, and once a trend is formed, it will not easily reverse. Therefore, in order to improve our trading success rate, we generally choose "a trend that is larger than our trading cycle" to follow, which can not only improve our trading success rate, but also ensure that we can get as much profit as possible.
Then "choosing a trend that is larger than your trading cycle" is the so-called "trend cycle". The "trend cycle" and "trading cycle" generally follow the 4-fold principle:
For example, if the trading cycle is 5 minutes, then the trend cycle is 20 minutes;
If the trading cycle is 1 hour, then the trend cycle is 4 hours;
The trading cycle is 4 hours, so the trend cycle is the daily chart (approximately equal to);
The trading cycle is the daily chart, and the trend cycle is the weekly chart (approximately equal to)
For example
For example, construction worker Zhang San has to move bricks for 4 or 5 hours before he can take a break and look at the market, so his trading cycle is the 4H chart, and his trend cycle is the daily chart. Assuming the above case of sugar orange, according to our principle of "must find two and confirm three" entry three-step (see (Intraday Trading Three Steps - Build Your First Trading System)), Zhang San should first look at the trend cycle, which is the daily chart (Figure 3).
(Figure 3: Daily moving average bullish arrangement)
The daily chart tells Zhang San that the current trend is a bullish trend, and this bullish trend has not yet reached its end (for how to judge whether the current trend has reached its end, see the 117th and 118th episodes of the free series of videos (From Trading Novice to Trading Expert)). The bullish trend that Zhang San sees on the daily chart is the trend he wants to follow.
The conclusion that the trend cycle gave him was: you can go long, you can go long with confidence, and that is enough.
Next, Zhang San's second step is to his trading cycle: 4-hour chart. (Figure 4)
(Figure 4: 4-hour chart moving average entanglement)
The 4-hour chart currently tells him that it is a period of oscillating trading range. According to the conclusion Zhang San just got in the first step, he can only go long at present, and the current level of trading range is essentially a complex callback of a larger cycle (daily chart). According to the principle of following the big and going against the small (all our transactions are essentially reversal orders of callbacks), Zhang San can only look for opportunities to go long at the support level of his trading cycle. In this way, he can determine his specific trading strategies such as entry position, stop loss position, take profit, order management rules, etc.
Therefore, Zhang San’s specific strategy is shown in the figure
Then in the following holding process, Zhang San may have the following common situations:
Situation 1: The market goes smoothly as expected, but during the development of the market, many opportunities that meet his trading system have appeared in smaller cycles (such as 1H chart, 5-minute chart). Should he make a few more trades?
A: No. "There are three thousand rivers, but I only take a scoop of water." We can understand many trading opportunities, but we don't have to seize them all. Only by giving up can we gain. Otherwise, the common situation is that we will be like a monkey trying to break a stick, and get nothing. It will also disrupt our original trading plan with a high winning rate, resulting in losses.
Situation 2: The market goes smoothly as expected and strongly breaks through T1 and T2, resulting in the failure to realize the profits after T2, which is the so-called "selling at high prices".
Answer: This is normal. Your goal is to earn 1,000 yuan, but now the market gives you 1,500 yuan. I often think of the extra 500 yuan as a surprise, a big red envelope given to me by the market. I will be grateful instead of complaining. Many times, if you think from a different perspective, your sense of happiness will be greatly improved.
"There are three thousand rivers, but I only take a scoop of water." Just take the scoop of water that we can carry, and don't expect to take all the water in the river with one transaction. What's more, I have just told you in the strategy that T2 is not a fixed take-profit position, but a floating price that moves the take-profit.
How to move the take profit? We have talked about this many times in the previous system class, so I will not repeat it here. More importantly, remember? Because we are following the rising trend of the daily chart that has not yet reached the end, the market has given us the expectation of being able to see further and gain further.
Situation 3: The market does not go as Zhang San expected, so he stops loss and exits the market.
Answer: This is also normal, and it is the norm in our daily trading. Just accept it, forget about this transaction, re-analyze and prepare for the next transaction, or change the product, or change the market, or even turn off the computer and wait for another day.
Many times, the stop loss is not necessarily the fault of our traders or the strategy itself, because the essence of our trading is gambling, gambling on the next expectations. Technical analysis is not science, but probability based on big data. Everything is art, and everything is vaguely correct.
Back to the beginning, why do many people who have studied trading for many years still fail on the issue of "trading level and cycle"? The core problem is "a monkey trying to break a stick", wanting everything, but wanting everything often results in having nothing.
If you want to make quick money in the trading market and make money immediately by going long, then isn’t it essentially about making money by going long in a smaller trading cycle? Maybe a 5-minute or 1-minute chart, then what should I do?
Is the 5-minute chart the right trading cycle for you?
Is the 5-minute chart the trading cycle you are good at?
Is the 20-minute chart, which is four times the 5-minute chart, rising at the moment? Is it a trend at the moment? Has this trend reached its end?
Is the 5-minute chart currently falling? Has the decline ended?
You see, you know nothing. In short, your demands are not in line with the current market. If you use these incompatible demands to invest in an unsuitable market, who else will fail if you don’t fail? If you don’t lose money, who else will lose money? If you don’t want to cry, who else will want to cry?
Just learn. Regardless of whether you can make money or not, at least you can lose less.
Finally, let me give you a fatal question?
What do you think is the correct trading idea?
A: I will do whichever cycle has "money"!
B: I only do it for 1-2 cycles. If there is no money in this cycle, I will take a break or change the product.
Think back to when I first entered the trading market
I tried my best to find knowledge about this on the Internet.
Hope to learn everything as soon as possible.
This way you can start the actual combat as soon as possible
Start earning money
At this time
Moving averages are usually the first technical indicators I learn.
Most of the online tutorials teach how to use two moving averages.
A fast one
A slow
When the fast line crosses the slow line from bottom to top, you buy
When the fast line crosses the slow line from top to bottom, you sell
This type of golden cross and dead cross trading strategy
For beginners
It's like a treasure
Because compared with other more complex technical indicators
The golden cross and dead cross are very important to Xiaobai.
At least it's feasible
Can be converted into cash immediately
If you really believe it
Immediate entry operation
The result is predictable
It must be a terrible loss.
Then I feel nervous every day
Very angry
Why do you lose money?
Blame the Heaven and the Earth
Complaining that moving averages are useless is rubbish
The above is 100% my real experience.
Mistakes I made when I first started trading
I believe this is also the experience of many newbies today.
Today I hope to share with you through this article
All the moving average techniques I have learned over the years
Summarize the mistakes made and the lessons learned
This way you won't make the same mistake I made.
At least your road will be much smoother than mine.
I summarized
Most people have a wrong understanding of moving averages
It's just too superficial
I'm oversimplifying this matter.
Just simply buy when you see a golden cross and sell when you see a dead cross.
In fact, what we really want to do is
How to think about how to use the moving average
To maximize your profits
How to improve your trading performance
Today I will focus on two major topics
Discuss with everyone
1. Is there a universal parameter setting for the moving average?
2. How to use the moving average to help us triple our yield
I hope you will take 5 minutes
After reading this article
Finally, some inspiration
Let’s get started!
1. The secret of moving average
What is a Moving Average?
Conceptually easy to understand
As the name suggests, it is the average price over a period of time.
Presented graphically with a line
There are three common moving averages:
SMA（Simple Moving Average）
WMA（Weighted Moving Average）
EMA（Exponential Moving Average）
SMA is simply dividing all prices
Get an average
Responds slowly to recent price and market trend changes
The concepts of EMA and WMA are the same.
Just a different algorithm
They tend to have more weight
So the speed of response will be faster
They are more sensitive to recent large price changes.
1: Is there a universal parameter setting for the moving average?
In fact, about the moving average
The most common question is whether there is a universal parameter for the moving average.
What are the best parameters?
20? 50? 100 or 200?
This question is like when you go to a coffee shop
Tell the store clerk:
Give me a cup of coffee, please!
The clerk asks you:
gentlemen
What kind of coffee would you like?
I said I don't understand these
Just give me the best coffee.
Usually here
Encountering an impatient clerk
I'll give you a cappuccino.
You pay
Then leave
Just like some online tutorials tell you
What do you use for 144EMA and 68EMA
When 68 crosses 144 EMA, you buy or sell.
It's totally confusing.
on the contrary
Those responsible and patient shop assistants will slowly guide you:
gentlemen
Do you want iced coffee or hot coffee?
Would you like your coffee with or without milk?
The milk foam on the cappuccino is relatively soft.
Mochachinno has chocolate syrup, a little sweet
Espresso is rich in fat and leaves a lingering aftertaste
If you like black coffee, you will be satisfied
same
As a responsible and patient trading coach
I will ask
What is your purpose of using moving averages?
Do you want an objective indicator to judge the long-term trend?
Or do you want to try to find a better entry point?
Or do you want to use the moving average as a stop loss point?
The above things
In fact, all of this can be done with moving averages
But here comes the point
I can tell you responsibly here.
There is no best moving average parameter setting in this world
Only the most suitable parameter settings!
And this parameter should not be determined by you or me
Anyone decides
The market itself decides this.
According to different market conditions, different trends, strengths and weaknesses
The most suitable parameter settings will also be different
We will judge based on two words
Which period of moving average
Best for this market
These two words are
obey
Here
I use the three most common moving average periods of 20, 50, and 200 as examples.
Let's look at examples of the above three parameter settings being followed by the market.
Let's switch to the 50 and 200 period moving averages.
Let's compare
Do you see the difference?
Confirmed on the side
The market is in a strong trend
Because the 20-period moving average is best used for a relatively fast
And the trend of a relatively small callback
Example 2
I use the 50-period EMA
Also see that the market is respecting the 50-period moving average
This situation represents that the market is in an upward trend
If we use 20 and 200 EMA to look at it
You will find that it is not very suitable for 20EMA
Because it keeps going back and forth between prices
200EMA is too far away from the price
Final Example
200EMA
The 200EMA is more suitable for a long-term and weaker trend.
Although the interval between each price contact is relatively far
But from a broad perspective
The market is following this 200-period moving average
Overall
Continue to move in an upward trend
Let’s open the 20 and 50 EMA and take a look
Seeing the two of them moving up and down like fools
In a trend that is slow or difficult to discern with the naked eye
200EMA is a good choice
Don't know the above knowledge
Did you give us some inspiration?
2. How to use the moving average to double your returns
Next I will talk about the second one
More friends are concerned about
How can we use moving averages to improve our trading?
I'll break it down into two things here.
First: use the moving average as a filtering condition
Second: Use the moving average to find a better entry time
Achieve a better profit-loss ratio
We just said
Moving averages of different periods can reflect trends of different strengths.
20, 50 and 200 EMA
Represents short-term, medium-term, and long-term market trends respectively.
Here I will take the long term trend
That is, the 200EMA example
If the price stays above the 200EMA
We can judge that the long-term trend is rising.
If the price is below the 200EMA
We can judge that the long-term trend is down.
Of course, this is just a rough method of judgment.
The best way is of course to use PriceAction (price action trading method)
But for beginners
PriceAction (price action trading method) is relatively complex
So I suggest that you learn PriceAction before
You can temporarily use a 200EMA as a filter function
Filter out some transactions that conflict with market trends
(certainly
I will also update the PriceAction course later.
Don’t forget to pay attention)
I don't mean that you can't do counter-trend trading
If you do counter-trend trading well, you can also make a lot of money.
But the winning rate of trading against the trend is low
Relatively high requirements
A deeper understanding of the market is required
Friends with little experience
I hope you learn to trade with the trend first.
Try to follow the general direction of the market in every transaction.
Let's look at this example
Price is above the 200EMA
Suppose I see a sell signal
Go short
Logically, my take profit should be placed at 200EMA.
on the contrary
Suppose I make a trending trade and go long
My profit margin is much greater.
You can always go to the next key position of the market (that is, the main support and resistance level)
Generally speaking
Before the market reaches a pressure point
Trend trading is the best choice
Just like the current BTC market
From 1800$ to 20000$
From 20000$ to 30000$
From 30000$ to 40000$
......
No one knows where the top is
Then let’s not guess.
Thing 2
How to use moving average to find a better entry time and achieve a better profit and loss ratio
How to catch a big trend
Here I will compare two moving parallel line trading techniques.
Golden Cross and Dead Cross
and
Interaction between price and moving averages
I personally think that a more logical trading method is to look at the interaction between price and moving average
The same chart
Two different trading methods
The same stop loss point
The same profit stop point
Because the timing of entry is different
The results are two different things.
On the left is the signal of the 20EMA crossing down through the 50EMA
The profit-loss ratio of entry is 3.65
On the right is the entry based on the interaction between price and 20EMA
The profit-loss ratio is 8.32
ah!
Did you see it?
Although I have deliberately selected this situation as an example
But similar situations will continue to appear in the market
Let’s look at the example of the death cross on the left.
20EMA crosses below 50EMA
Use the previous high as the stop loss point here
Suppose we are great
You can catch the whole trend
For every $1 we risk, we get $3.65 in return.
Let’s look at another example of price interacting with the EMA.
All other conditions remain unchanged
Because we see that the price made a false breakout at the 20EMA
The next candlestick ended with a bearish engulfing candlestick pattern.
We entered the market two Yin-Yang lines earlier than the death cross.
React faster
So the rewards are more
Do you understand?
All things being equal
As long as you have a better entry time
There will be a better profit and loss ratio
You only have to win once at the critical moment
It can offset several of your failed transactions.
Only in this way, day by day
You can make money
Make a lot of money
In and out for short-term trading
Few can make money
And still very tired
so
For Newbies
I offer this advice from the bottom of my heart.
There are hundreds of technical indicators on the market.
You really don't need to learn it all.
Biting off more than you can chew
You just choose one
Digging Deeper
Learn it well
It's enough for you
I have seen too many experts who can achieve 100% profit just by K-line.
Countless
Next Steps
Let’s look at another example of price interacting with a moving average.
This is a 200EMA
In this approximately one month period
We see that the price only had two chances to touch the moving average.
This means we only have two trading opportunities.
The first time we saw a false breakout at the 200EMA
Bearish Engulfing Pattern
And we see that the shadows are telling us
The price tried to move upward but was rejected.
The second time we see the price make two consecutive false breakouts near the EMA
Add a double top pattern
We are also shorting the market.
Same as the first time
The results are good.
The two just now are through the interaction between price and moving average
Get an example of a good profit/loss ratio
You should know that the moving average is actually a dynamic support and pressure level.
Whenever the price pulls back to this key position
We are just looking for opportunities to enter.
Trading in this position
Usually have a good profit-loss ratio
This is the moving average trading method I personally recommend.
But when we open the 20EMA and 50EMA to compare
Three trading opportunities occurred during this period
A cursory look shows that there were two times when it was profitable.
One is a loss
Sounds like it's pretty good
But let’s look a little deeper.
You will find that the profit and loss ratio of the two trading methods cannot be compared.
The final amount of money earned was more than doubled.
Do you understand?
Okay, let me summarize what I learned today.
Point 1: There is no one-size-fits-all parameter setting for the market
There is only one most suitable moving average parameter setting
This parameter setting is determined by the market situation.
Point 2: Moving average can be used as a filtering function
Give you an absolutely objective reference factor
Let you know which side the market trend is on?
Make sure you can trade with the general trend
Point 3: We learned about the interaction between price and moving averages
The results obtained
It is better than using trading signals such as golden cross and dead cross
Our focus should be on the interaction between price and moving average
It is not very rigid to only look at when the two moving averages cross up or down.
Because price is the root of all things
If we get hold of this
There is definitely a better time to enter.
To get a better profit-loss ratio
In the long run, your chances of success are definitely much greater!
The three realms of the cryptocurrency market:
Coins in hand, coins in heart
Coins in hand, no coins in mind
No money in hand, no money in heart
The final state is to leave the financial market
There are thousands of virtual currencies in the world and hundreds of them on the market. It is impossible to study them all.
First, you must be clear about your financial situation and use part of the funds for long-term investment, because long-term investment is the easiest way to make money.
Second, don’t trade frequently. The more you trade, the more mistakes you will make.
You can win N 100% in your life, but you can only lose one 100%
Therefore, your profit and loss ratio is a disproportionate concept in life. I hope everyone pays attention to it.
Third, learn to wait, because only by waiting can you better understand who you are and what you want to do.
The most difficult part of cryptocurrency trading is not choosing coins, nor buying and selling, but waiting;
The most difficult thing in life is not hard work or struggle, but choice.
A decline cleanses one’s impetuousness, while a rise tests one’s self-cultivation.
Cryptocurrency trading can make us grow continuously, but growth is painful. This pain does not come from growth itself, but from the fact that we have to face so many changes and unforgettable things in the process of growth.
For self-disciplined people in the cryptocurrency circle, pain is also joy; where there is hope, hell is also heaven.
In the cryptocurrency world, retail investors always give up on those that haven’t risen yet and chase after those that have already risen; in life, people always cherish what they don’t have and forget what they have.
The reason why you lose money in cryptocurrency trading is not because you think it is simple, but because you want it to be complicated;
The reason why people are happy is not because they get a lot, but because they care less. After the rain, I am willing to hold an umbrella for the leeks!
Sheng Ge has been in the market for many years and is well aware of the opportunities and traps. If your investment is not going well and you are unwilling to lose money, please leave 999 in the comment area. #美众议院通过FIT21法案
