I have always said that mastering a skill is the 10,000-hour rule. With 8 hours a day and over 200 days a year of review, it takes about 5 years, which is just the foundation for stable profits. There will definitely be big pitfalls within 10 years, so to be safe, do not invest more than your capacity within that timeframe.
Many experts who have turned hundreds of thousands into tens of millions or even billions are just using contracts with very high leverage. As a result, many have lost everything in one cycle, but you just don’t know it. Human nature, in the face of major trends, often leads to the loss of correct judgment.
After much trial and error, I have summarized 8 iron rules; the content is not extensive but has significant value. If you think it makes no sense after reading, feel free to say what you like!
1. Divide your funds into five parts and only invest one-fifth at a time! Control a 10% stop loss; if you make one mistake, you only lose 2% of your total funds, and if you make five mistakes, you lose only 10%. If you are right, set a take profit of over 10%. Do you think you will still get trapped?
2. How can we further increase the win rate? Simply put, it's about going with the trend! In a downtrend, every rebound is a temptation to buy; in an uptrend, every drop creates a golden opportunity! Is it easier to make money by bottom fishing or by buying low?
3. Do not touch coins that have experienced rapid short-term surges, whether mainstream or altcoins. Very few coins can sustain multiple upward waves after a short-term surge. The logic is that it is very difficult to continue rising after a short-term spike. When it stagnates at high levels, it will naturally fall later; this is a simple principle, but many still want to take a gamble.
4. You can use MACD to determine entry and exit points. If the DIF line and DEA cross above the O axis and break through the 0 axis, it is a solid entry signal. When MACD forms a dead cross above the O axis and moves downward, it can be seen as a signal to reduce positions.
5. I don’t know who invented the term ‘averaging down,’ but it has caused many retail investors to stumble and suffer huge losses! Many people keep averaging down as they lose more, which is the biggest taboo in crypto trading that puts them in peril. Remember to never average down during a loss, but to add to your position when in profit.
6. Volume and Price Indicators: Volume is the soul of the market. Pay attention to significant volume breaks at low levels during consolidation, and decisively exit when there is significant volume stagnation at high levels.
7. Only trade in upward trends; this maximizes your chances and saves time. If the 3-day line turns upward, it indicates a short-term rise; if the 30-day line turns upward, it indicates a medium-term rise; if the 84-day line turns upward, it indicates a primary upward wave; if the 120-day moving average turns upward, it indicates a long-term rise!
8. Insist on reviewing trades weekly to check if your holding logic has changed, technically analyze whether the weekly K-line trend aligns with your judgments, and if the direction has changed, adjust your trading strategy in a timely manner!
Important Notes for Newcomers in the Crypto Space
1. Start by only buying Bitcoin and Ethereum; other coins can be very volatile and will cause you significant psychological stress. Bitcoin and Ethereum can also experience drops of 20%.
2. Try not to buy from small exchanges; if a coin is not available on major exchanges, it is likely a high-risk coin. No matter how tempting the advice to buy may be, do not proceed. If you really must, feel free to ask me first.
3. Don't go all in at once; manage your position well. Even in a bull market, there are many opportunities for sudden dips to catch you off guard.
4. Contracts are tools for risk hedging, not tools for gambling.
5. Do not transfer coins casually; there is no need to buy several thousand dollars worth just to withdraw to a wallet. Newcomers are far more likely to lose their coins than to be stolen.
5 Iron Rules of Trading in the Crypto Space
1. Rapid rise, slow pullback: after a sharp price increase followed by a steady pullback, it often indicates that the market maker is secretly accumulating for future price movements.
2. Rapid decline followed by slow recovery indicates market makers are offloading: when prices drop sharply and then recover slowly, it usually means the market makers are gradually selling off their chips, signaling that the market may enter a downward phase.
3. Ample top volume; no need to rush to sell: if volume decreases, be cautious: high trading volume at high levels indicates more upward potential. But if the volume decreases and the upward momentum is insufficient, exit decisively.
4. Watch for volume increases at the bottom; continuous volume increase is a buying signal: volume increase at the bottom may only be a brief adjustment, so caution is necessary. However, if the volume continues to increase, it indicates sustained capital inflow, which is a good entry point.
5. Trade while observing sentiment; volume reflects consensus: price fluctuations are influenced by market sentiment, while trading volume reflects market consensus and investor behavior. Keeping close track of trading volume and understanding sentiment changes is key to seizing trading opportunities.
5. Conclusion
Below are the core points of this guide:
(1) Market structure consists of a series of higher highs, higher lows, lower lows, and lower highs.
(2) An uptrend is considered valid when the price reaches and exceeds two consecutive higher highs; conversely, a downtrend is valid when the price reaches and exceeds two consecutive lower lows. Additionally, when the price retests previous highs and lows, the range is also considered valid.
(3) By applying the T.A.E.E. framework (Trend, Area of Value, Entry, Exit) and reading price movements, you will find many trading opportunities regardless of market conditions.
Playing around in the crypto space is essentially a struggle between retail investors and market makers. If you don't have insider information or first-hand data, you can only get burned!
I have navigated the market for many years, deeply understanding its opportunities and traps. If your investments are not going well and you're frustrated, leave a comment with 999! I will share my insights!
