I have been trading cryptocurrency for 10 years, with 6 years as a professional trader, totaling over 1800 days. From initially entering the market with a capital of 200,000, over these years, I have experienced various pressures, pains, and confusions, ultimately achieving enlightenment by simplifying trading techniques, making them less complex. In just three years, I easily withdrew 48 million in the cryptocurrency market! My journey in cryptocurrency trading (the five stages of trading growth)
1.【Entering the Cryptocurrency Market】When I first came into contact with the cryptocurrency market, like everyone else, I relied on luck to buy whichever coin looked good. I don’t know if it was good luck or if beginners have a grace period, but in the first six months, my assets grew tenfold. At this point, I became overconfident! However, it was proven that when a person is too pleased with themselves, it may be the time to stumble, and reality will mercilessly slap you in the face. When my assets were halved in a single order, I realized that the trading market is ruthless, and good luck will not always be with you!
2.【Learning the Craft】After experiencing the biggest trading failure, I realized that relying solely on luck is not a long-term strategy; Lady Luck will not always be on your side. At this point, I understood that trading requires solid professional knowledge and analytical abilities, and I began to reflect and learn. I read relevant books, engaged with various information platforms, searched for opportunities and trading perspectives, and combined technical indicators to build my own trading system. If you are new to the cryptocurrency market and have the favor of Lady Luck, this is your best opportunity to learn! During the beginner's grace period, learn more techniques to improve your analytical skills. However, when I felt that I had learned enough techniques, my assets did not see explosive growth. But I no longer experienced significant losses and had gained the ability to counter risks. Although trading techniques are not always effective, they have deepened my understanding of the market, and at this point, I began to search for the true essence of trading.
3.【Road to Enlightenment】When I realized that different trading indicators and systems are not the key factors determining profits and losses, I began to focus more on trading psychology. I found that many times, profits often come from decisiveness and patience, rather than rushing to trade and frequently opening positions. This actually resonates with the psychology of just entering the cryptocurrency circle. At this time, I knew 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, and calculating returns on a monthly basis, I no longer care 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, clearly accept losses and gains. Achieve an overall small loss and big profit, becoming a stable trader and investor. At this time, you will earn recognition and respect from others, becoming a 'teacher' in the eyes of others. At this moment, only some black swan events will impact your trading logic, but black swan events are always few, and your own trading logic is something you must stick to.
5.【Mastering the Craft】When trading reaches a level of mastery, handling indicators and market conditions flows effortlessly. Profits and losses become a matter of course, and emotions gradually stabilize. Having an intuitive ability, I no longer feel excitement about trading, but rather aim for continuous profit. At this moment, I gradually take on the appearance of a trader, possessing patience, perseverance, and trading wisdom that surpasses most people. The journey of trading requires continuous learning and improvement; from entering the cryptocurrency market to mastering the craft, one can only achieve stable profits in the market by constantly refining one's trading system and understanding the way of trading. No one trades without incurring losses, but our goal in learning is to minimize losses while maximizing profits.
Four Major Techniques for Dealing with Coin Losses 5:
(1) Short-term Loss Recovery Strategy Guidance: Timeliness If you have completely misjudged a market wave, you should seize the opportunity to exit quickly and adjust your operational direction, which is very important. If you detect something is off, decisively close your position to avoid further losses from 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 this comprehensively. Short-term investors in a one-sided market should also pay attention to the techniques of stop loss and take profit in cryptocurrency trading. Sometimes, if you do not stop loss or take profit, the longer you hold, the greater the losses will become.
(2) Long-term Loss Recovery Strategy Guidance: Patience When you have identified the major trend (for example, a bullish market), you need to stabilize your mindset. In fact, when a position is trapped in a small trend (the market has moved down), it can be closed with a stop loss. You should never be too impatient, and choose to re-enter at a lower price, allowing you to earn a certain degree of price difference and seize the potential profits from the major trend, which is a favorable situation for investors.
(3) Swing Trading Loss Recovery Strategy Guidance: Accuracy The mastery of stop loss and take profit strategies for cryptocurrency trading actually varies from person to person and from time to time. The swing trading method applies to various trapped situations but needs to be used flexibly. Everyone needs to accurately judge the trend, especially in a volatile market. Simply put, it relies on the price fluctuations of the coin to achieve profit from the price difference.
(4) Light Position Loss Recovery Strategy Guidance: Flexibility Using idle funds to lower costs is also a very good method. As long as the operation is appropriate, any rebound opportunity can suffice to recover losses. In general, when investing, it is necessary to have reasonable references and guidance, to take profits and stop losses in a timely manner, ensuring that profits are realized is a very important investment skill. Meanwhile, when analyzing market conditions, we should refer to various aspects and consider both technical and news perspectives to improve the accuracy of predicting market conditions, so that we can follow the trend and earn profits.
The basic principles of Dow Theory applied to the actual situation of the cryptocurrency market can be summarized as follows:
First, the average price encompasses and digests all factors. The fundamentals, policies, news, and capital can all affect the supply and demand relationship, and all of this will be intuitively reflected in the market, ultimately absorbed and digested through price changes.
Second, the market has three types of trends. Dow classifies trends into three categories: primary trends, secondary trends, and minor trends. Primary trends are like the tides of the ocean, representing long-term trends, similar to the cyclical nature of the cryptocurrency market, where bull and bear cycles have no beginning or end. Secondary trends are represented by waves in the tides, indicating retracements in the primary trend, generally retracing to the important Fibonacci levels of 38%, 50%, and 62%. Minor trends are ripples, referring to subtle fluctuations that possess high uncertainty and change rapidly.
Third, major trends can be divided into three stages. The first stage is the accumulation stage, similar to the yin giving birth to the yang. It means that the bear market has reached its end, and although everyone is bearish, the price has already dropped as low as it can go, and the main players start to accumulate in batches at this time. The second stage is the bull market attack stage when favorable news begins to appear, and most retail investors with some technical knowledge start to gradually enter the market, causing the price to gradually rise. The third stage is the climax sprint, when major media outlets begin to flood the market with good news, boldly predicting the continued rise in prices, and retail investors actively buy in, fearing to miss out on this rare opportunity to make money, but in fact, the main players who bought at the bottom have already begun to sell.
Fourth, various average prices must mutually validate each other. For instance, both Bitcoin and mainstream coins must have a combined rise that exceeds the peak of the previous mid-trend to be considered the onset of a large-scale bull market! Similarly, if both Bitcoin and mainstream coins have a combined drop that breaks through the neckline of the high-level consolidation phase of the bull market, fifth, trading volume must validate the trend. Dow believed that volume is in second place in technical analysis. When prices move along with the major trend, trading volume should also increase correspondingly.
Fifth, we can only determine that a established trend has ended after a clear reversal signal occurs. A major trend has inertia and generally continues to move in the main direction for a while longer, so you must wait for the trend to confirm a reversal, such as a head and shoulders pattern confirming a break below the neckline, to consider it a trend reversal. Dow Theory is a macro technical analysis system, aimed at capturing the most significant part of the market's important movements, which is the most profitable part of the fish's belly. Its advantage lies in successfully determining the major bull and bear trends, but its disadvantage is also obvious, as signals are usually delayed, and generally, it will miss 20%-25% of the profit space.
These days, I am preparing to deploy a divine order that is about to launch!!!
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