I have been in the crypto space for some years. Starting from a small retail investor with 50,000 yuan, I have navigated through the crypto market and now achieved millions. Today, I want to share my personal experience with everyone.
First, let's talk about capital management. Never invest all your money at once. I prefer to operate in batches; this way, even if I incur losses, they won’t be too severe. I set a rule for myself: once I lose to a certain extent, I withdraw decisively, regardless of what the market looks like. This way, even if I incur several consecutive losses, it won't be devastating. But if I profit, the gains can be substantial. Even if I get stuck, I can maintain my composure.
Going with the market trend is definitely the right approach. When the market is down, don't always think about bottom fishing; it's unrealistic. When the market is up and retracing, that's the best opportunity; at this time, buying low is much safer than stubbornly trying to catch the bottom.
When selecting coins, you must have vision. Those coins that suddenly surge, whether mainstream or altcoins, should be approached with caution. Rapid increases often lead to significant corrections, making it easy to get stuck.
In terms of technical indicators, I often use MACD. When the DIF line and DEA line cross below the 0-axis and then break above it, it's a buying signal. If they cross above the 0-axis and then start to decline, I need to reduce my position. Never attempt to average down carelessly. If you incur losses, don't average down; many people end up losing more and losing everything. Remember, losses should have a stop-loss, and profits should allow for position increases.
Trading volume is also crucial. When the price breaks out from a low level, if the trading volume increases, it might be a great opportunity.
The key is to go with the trend. Combine daily, monthly, and other analyses to determine which line is turning upwards, so you know how to operate.
In summary, trading cryptocurrencies carries both risks and opportunities. I hope my experience can help everyone, but I must remind you to invest cautiously!
The basic principles of Dow theory, combined with the actual situation in the crypto space, can be summarized in the following six points:
First, average prices encompass and digest all factors. Fundamentals, policies, news, and funds can all affect supply and demand; everything is intuitively reflected in the market, and ultimately, the market absorbs these changes through price fluctuations.
Second, the market has three types of trends. Dow classifies trends into three categories: primary trend, necessary trend, and short-term trend.
The main trend is like the tides of the ocean, belonging to a long-term trend, similar to the cyclical changes of seasons in the crypto market, where bull and bear cycles have no beginning or end.
Minor trends are like waves in the tide, representing pullbacks in the major trend, typically retracing to important Fibonacci levels of 38%, 50%, and 62%. Short-term trends are ripples, referring to subtle fluctuations that are highly uncertain and change rapidly.
Third, the major trend can be divided into three stages. The first stage is the accumulation phase, similar to the yin and yang, meaning that at the end of a bear market, although everyone is bearish, the price has dropped as much as it can, and the main force begins to accumulate in batches.
The second stage is the bullish attack phase, where favorable news begins to emerge, and most retail investors with some technical knowledge gradually enter the market, causing prices to start rising.
The third stage is the climax sprint, where major media begin to flood the market with good news, boldly predicting further price increases. Retail investors buy actively, fearing they will miss this rare opportunity to make money, but in reality, the main players who bought at the bottom have already begun to sell.
Fourth, various average prices must mutually validate each other. For example, only when the common increase of Bitcoin and mainstream coins exceeds the previously established peak in the mid-trend can we say that a large-scale bull market has arrived! Similarly, if the common decline of Bitcoin and mainstream coins falls below the neckline of the high-level consolidation phase in the bull market trend.
Fifth, trading volume must validate the trend. Dow believed that volume is second in technical analysis; when prices are moving along the major trend, trading volume should also correspondingly increase.
Sixth, only after a clear and undeniable reversal signal occurs can we determine that a predetermined trend has ended. A major trend has momentum and will generally continue moving in the primary direction for a while longer, so always wait for trend confirmation before identifying a reversal. For example, a head and shoulders pattern must confirm a breach of the neckline to be considered a trend reversal.
Dow theory is a macro technical analysis system aimed at capturing the largest segment of significant market movements in actual trading, essentially the most profitable segment.
Its advantage is its success in determining the major trends of bull and bear markets; however, its downside is also obvious: signals are often delayed, typically missing 20%-25% of the profit potential.
Share insights on trading cryptocurrencies:
1: Regularly invest in mainstream and leading coins. Regular investment is better than lump-sum buying; full investment has a higher probability of profit. If you buy in all at once and the price drops later, it becomes difficult to average down. Watching the price drop while not being able to buy more is particularly painful, and the opportunity to lower your cost is missed. Even in a bull market, your gains will be significantly less.
2. Improve your ability to make money off-market.
In the market, the focus is primarily on buying coins and accumulating them. If you want to hold onto your coins, you must also enhance your off-market earning capacity. Your ability to earn money depends on your job. If you have a lot of free time, invest more in yourself, learn new skills, and by following me as a Twitter KOL, you can convert traffic into cash.
3. Invest more in areas you are familiar with.
Investing more in familiar areas allows for better risk control. If you invest in things you don't understand, you risk losing more. Investing in areas you know increases cash flow, and having cash flow enables you to earn more, thus avoiding having to sell your valuable coins when prices drop.
4. Deeply research the trading techniques of speculative funds.
Familiarize yourself with the development trajectory of historical hundred-fold coins. You need to establish your own profitable trading strategy and continuously optimize your coin selection and timing in practice.
Tips for learning to trade cryptocurrencies:
1. Invest with idle money; avoid borrowing money to trade - invest money + invest effort.
2. Strictly filter valuable coins and create a reasonable capital allocation plan that aligns with reality - Sunshine Investment Strategy
3. Averaging down - it's normal to have pullbacks after entering a position, so allocate funds reasonably and enter in batches.
4. Refuse to go all-in; allocate your positions reasonably. Don’t put all your eggs in one basket to effectively reduce risk.
5. Keep an eye on everything - look at cryptocurrency news and the latest financial updates. Early awareness leads to better insights and earnings.
6. Think reversely; do not oppose the market makers or trends. Go with the flow and follow the trend.
7. Open contracts without going all-in, with leverage below 5 times. Avoid using 100 times leverage; it's best not to touch leverage at all. Don't seek to get rich overnight; instead, aim for steady profits.
8. Control your income well - managing your position is more important than anything else. If unsure, don't operate easily; not trading means no risk and no loss. Spend time looking at your assets to see if they are well managed and reasonably allocated.
9. The bottom is in your mind, and the top is in your mind. Don't be afraid; the crypto market will only help you grow. Your mindset is more important than your actions. Remember the trading methods well; there’s no need to worry about not making money!
Investing is not a competitive game; it is a personal journey of self-cultivation.
In fact, there's another saying: every penny you earn is a manifestation of your understanding of this world.
Spend a night organizing six iron rules for trading cryptocurrencies. The content isn't extensive, but it's packed with practical insights. If you don't plan to leave the crypto space in the next three years, these six rules will greatly assist you!
Continue to pay attention: $WLD $FET $KERNEL
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