As someone who entered the crypto space at 8000 and has now achieved financial freedom, let me tell you: carefully read this article, and you will benefit for a lifetime!
From May 23, 2022, to June 4, 2024, in two years, I took less than 700,000 and achieved a win rate of 418134.86%, turning it into over 28 million. I am here to share some pure practical knowledge on how to earn more wealth in the crypto space.
The road ahead is long; I wish everyone less detours and fewer tragedies! Having achieved financial freedom, I have consistently created content on Zhihu. Many people do not understand why, after achieving financial freedom and reaching several small goals, I still do this.
I have also asked myself the same question. In the process of rediscovering my original intention, on one hand, it is for my hero dream. I have dedicated everything to trading, honing a unique skill set, and I don't want it to go unnoticed!
On the other hand, I want to provide a pathway for those who are eager to learn. What I have gained from the market is now part of a feedback process to the market. The way of nature reminds me of the struggles I endured for months due to leverage issues. There were no clear paths to learn from; I could only replay candle charts again and again, day and night, struggling to where I am now, fully aware of the hardships faced by novice retail investors in the crypto space, feeling their struggles even more!
Recalling my three failures in the graduate entrance exam, a debt of over a million, various small loans, endless debt collection harassment, all I remember are my mother's tears and my family's abandonment. The breakdown of relationships led me to Shenzhen, Shanghai, Hong Kong, abroad, and Singapore. What I have gained in the cryptocurrency space is now visible to those who are learning alongside me, gaining real knowledge, mastering skills, and earning more wealth. This is my motivation to move forward, and the likes and follows from fans and family are the source of my continuous creative updates!
Cryptocurrency Survival Guide: Revealing Super Practical Trading Techniques (Pure Practical Content)
In the cryptocurrency market, trading strategies are your 'secret weapon'. The following tips are the crystallization of practical experience; be sure to save them!
- Entry section: Test the waters in the crypto space, prepare to proceed; enter steadily, reject rashness.
- Consolidation section: Low-level consolidation creates new lows, heavy buying is appropriate; high-level consolidation with spikes, decisively sell without hesitation.
- Volatility section: Sell on spikes, enter quickly on drops; watch and wait during consolidation, reduce trading. Consolidation means holding steady, as a rally may come at any moment; be alert to sharp drops during rapid rises, ready to secure profits; slow declines are a good opportunity to incrementally add positions.
- Timing of trades section: Don't sell on spikes; don't buy on drops; don't trade during consolidation. Buy on bearish candles, sell on bullish candles; contrarian operations are the way to stand out. Buy on large dips in the morning; sell on large rises in the morning; don't chase high prices in the afternoon; buy on dips the next day; don't cut losses on mornings with no movement; seek to break even on trapped positions, excessive greed is to be avoided.
- Risk Awareness section: Calm waters can lead to high waves, and there may be large waves ahead; after a big rise, there must be a pullback, with candlesticks showing a triangular pattern over multiple days. In an uptrend, look for support; in a downtrend, look for resistance. Over-leveraged positions are a major taboo; acting stubbornly is not feasible; know when to stop in the face of uncertainty, and grasp the timing of entry and exit. Trading cryptocurrencies is essentially a matter of mindset; greed and fear are the greatest enemies; be cautious in chasing highs and cutting losses, and maintain a calm state of mind.
In addition to the tips, I have also compiled several extremely practical trading methods that can benefit both novice and experienced players.
Oscillation trading method: Most markets are in an oscillation pattern, utilizing high selling and low buying within a range is the basis for stable profits. Use the BOLL indicator and box theory, along with technical indicators and chart patterns, to accurately identify resistance and support.
Breakout trading method: After long periods of consolidation, the market will choose a direction. Entering after the breakout can yield quick profits. However, precise breakout judgment ability is required, along with a steady mindset, avoiding greed and fear.
One-way trend trading method: After breaking through the market range, a one-way trend will form, and trading in the direction of the trend is key to profitability. Enter positions during pullbacks or rebounds, referring to indicators such as candlesticks, moving averages, BOLL, trend lines, etc. Mastery of these tools will allow for smooth trading.
Support and resistance trading method: When the market encounters key resistance or support levels, it often faces resistance or gains support, making it a common strategy to enter positions at this time. Use trend lines, moving averages, Bollinger Bands, parabolic indicators, etc., to accurately assess resistance and support levels.
Pullback rebound trading method: After significant rises or falls, a brief pullback or rebound will occur. Seize the opportunity to profit easily. This is mainly judged based on candlestick patterns; good market sense can help you accurately grasp high and low points.
Time-based trading method: Morning and afternoon sessions have small fluctuations, suitable for conservative investors. Although the time to profit is long, the market is easier to grasp; evening and early morning sessions have large fluctuations, suitable for aggressive investors, allowing for quick profits but with high difficulty, requiring strict technical and judgment skills.
If you are also a technical enthusiast and are immersed in studying technical operations in the cryptocurrency market, you might consider following the public account (YuanYuan Wealth), where you will get the latest cryptocurrency intelligence and trading skills!
Do you desire to learn how to anticipate shifts in market trends? Unfortunately, no such method exists; no trading system or method can achieve this goal, nor is there an 'optimal trend reversal indicator'. However, you can learn how to interpret price movements and identify potential areas where the market may reverse.
In this guide, the content you will learn includes:
(1) How to identify trend reversals by analyzing market price behavior.
(2) How to determine where the market might start to reverse (with high accuracy).
(3) How to identify high-probability trend reversals.
2. How to identify trend reversals - identify weaknesses in trend movements.
(1) Define trend movements.
Trend movements are the 'stronger' parts of the trend, trading in the same direction as the trend (hence the name trend movement). In a healthy uptrend, trend movements often show stronger bullish signals than bearish candles, with bull candles being relatively numerous and their closing prices close to the day's highs, as shown in the figure below.
When the size of bullish candles decreases, it usually indicates that buying pressure is weakening, or there is simultaneous selling pressure, as shown in the figure below.
However, this does not mean that the market will inevitably crash. However, it is a clear sign that buyer strength is weakening, and a temporary adjustment may be needed before the market potentially rises again.
(2) Determine the strength of the pullback.
Pullback movements are the opposite of trend movements; they are the 'weaker' parts of the trend and move in the opposite direction of the trend (hence the name pullback movements). In a healthy uptrend, pullback movements are usually more bearish than bullish candles, with bearish candles being relatively few in number and typically closing at or below the center of the trading range, as shown in the figure below.
When the size of bearish candles increases, it usually indicates that selling pressure is increasing, as buyers are unwilling to purchase at higher prices, as shown in the figure below.
Similarly, this does not mean that the market will definitely reverse from this point. However, it is indeed another sign that buyer strength is gradually weakening.
(3) How to identify trend reversals - Breakthrough support/resistance areas.
As trends develop, they will enter a distribution phase, where the power balance between buyers and sellers tends to stabilize (the market appears to have entered a range state). During this phase, support areas become particularly critical, as they represent the last line of defense that buyers can hold. If this support area is broken, the situation will become very unfavorable for bulls, as shown in the figure below.
Based on observational experience, the probability of support areas being tested multiple times in a short period will decrease.
(4) Breakthrough of long-term trend lines.
In some cases, the market shows respect for key trend lines. If this trend line is broken, it may indicate that buyer strength is weakening, as shown in the figure below.
It is evident that what you have learned previously is 'analysis' techniques, which help you analyze when market trends may reverse. However, this is not sufficient because market structures are always changing; sometimes the market respects support or resistance levels, while at other times it may be trend lines, etc. Therefore, in the following content, you will learn 'prediction' techniques to help you identify high-probability situations where market reversals may occur.
3. Areas where the market may reverse - higher time frame structure.
It is no surprise that support and resistance levels on longer time frames have greater impact compared to similar levels on shorter time frames. This means that support or resistance levels identified on a weekly time frame are more critical than those identified on a 1-hour time frame. Therefore, if a sudden market reversal is observed, it likely indicates that the market has entered a higher time frame structure (such as support or resistance) and has achieved a reversal within that structure, as shown in the figure below.
This method is useful for two main reasons: First, you can use the structure of higher time frames to identify high-probability market reversal areas. Second, you can avoid trading directly within higher time frame structures, thus avoiding potential poor trade setups. Next, let's continue learning the subsequent content.
(1) Over-expanded markets.
First, let's clarify the concepts of mean reversion and over-expanded markets.
Mean reversion: This means that market prices tend to revert to their average levels, which can be measured through moving averages, Bollinger Bands, or other trend reversal indicators.
Market over-expansion: This means that market prices have deviated from their average levels, exhibiting a state of 'over-expansion'.
The truth is that the market rarely fluctuates along a straight line. When the market is in an 'over-stretched' state, it typically experiences a drop before continuing to rise (which is why, in an upward trend, you will see higher highs and higher lows). At this moment, you may wonder: 'What does an over-expanded market look like?' (Tip: You do not need to rely on any reversal indicators to identify this situation) The figure below provides a specific example.
Therefore, when you observe that the market shows signs of excessive expansion, a wise choice is to wait for the market price to pull back to a reasonable level before considering establishing a position. Alternatively, if you are a mean-reversion strategy trader, you can use this phenomenon for counter-trend trading by establishing a position when the market price approaches its mean.
(2) Parabolic movement.
Parabolic movements usually occur in the later stages of a long-term uptrend, when market prices suddenly show a ballistic vertical uptrend, similar to a rocket launch. You will also notice that the range of candles in parabolic movements is much larger compared to earlier candles. When this happens, it usually indicates that the uptrend is about to end, as 'blind' capital is flooding into the market while 'smart' capital is exiting their trades, often accompanied by a significant increase in volatility. Therefore, if you notice that a market has experienced a long-term uptrend and suddenly shows a parabolic rise, it may be a strong signal that the market top is approaching, as shown in the figure below.
I realize that identifying parabolic movements may involve a degree of subjectivity, and thus, it can be considered one of many market reversal indicators worth close attention. You might consider using the Average True Range (ATR) indicator and analyzing volatility data from the past few years. If the ATR value is at a multi-year high, this may be a potential warning signal. Additionally, the Keltner Channel can also serve as one of the trend reversal indicators to 'predict' market turning points.
4. How to identify high-probability trend reversals
You have learned various techniques to identify trend reversals and predict market turning points. However, it is important to note that you should not use any single technique in isolation, as this often leads to low-probability trend reversals. Conversely, when you combine multiple techniques, you can increase the likelihood of spotting high-probability trend reversals, as detailed below:
(1) Sugar Weekly
The key support level for Sugar is constituted by long-term trend lines and support areas, which were eventually broken, leading to the formation of a typical head and shoulders top pattern.
(2) Corn Weekly
Corn prices have strongly retested previous highs. However, with increased selling pressure (manifested as large bearish candles) and decreased buying pressure (manifested as small bullish candles), the market has shown danger signals. Additionally, you will notice a common trend reversal pattern, observing a small head and shoulders pattern, indicating that buyers cannot break through the previous highs. Importantly, there are no hard and fast rules or fixed criteria to determine which combination is best; it all depends on the interpretation of market price movements to find high-probability market turning points. Regardless of how confident you are in the market, you still need a clear plan for entering, exiting, and managing your trades, while adopting appropriate risk management measures.
5. Frequently Asked Questions
(1) How do I confirm whether a parabolic movement will reverse or continue to rise?
It is uncertain, but I focus on the depth of the pullback. If the pullback of a small range candle is shallow, then the market is likely to rebound again. However, if the pullback is very steep with large retracement candles, the parabolic trend is likely over, and the market may enter a range or completely reverse.
(2) Are there any common chart patterns for trading trend reversals?
Yes, if you want to discover more trend reversal patterns to trade trend reversals, please check the following: (Inverse Head and Shoulders Trading Strategy Guide), (Head and Shoulders Trading Strategy Guide), (Double Bottom Trading Strategy Guide), (Triple Top Chart Pattern Complete Guide).
6. Conclusion
It is impossible to provide a method to achieve 100% accuracy in identifying market trend reversals, and there is no such thing as an 'optimal trend reversal indicator'. Instead, what you can do is read price movements and determine potential areas where the market may reverse. Here are some references:
(1) Identify weaknesses in trend movements.
(2) Determine the strength of the pullback.
(3) Breakthrough of key support or resistance levels.
(4) Breakthrough of long-term trend lines.
(5) Prices are entering a higher time frame structure.
(6) Prices are too high.
(7) Prices show a parabolic shape.
When multiple factors converge, the likelihood of a trend reversal increases.
Stay nostalgic, analyze with precise strategies, and select with huge funds of millions through AI big data to ensure you remain undefeated? The market never lacks opportunities; the question is whether you can seize them. Only by following experienced people can we earn more!
Continue to follow: TOKEN AI16Z SIGN
