As the old saying goes, 'Without windfall riches, one cannot become rich; without night grass, horses cannot be fat.' I believe many people enter the crypto world with the intention of making a big profit and then reaching the peak of their lives, but because they lack the correct method, things often go awry, resulting in losing everything. Thus, many people begin the path of learning, such as buying books, researching information, or seeking guidance from experienced individuals.
Let's talk about what kind of people in the crypto world can play with Bitcoin? Only two types of people: those with vision can seize the future's direction, and those with insight can grasp current opportunities.
(1) Those with vision can grasp the future's direction; those with insight can seize the current opportunities. In fact, this can be very responsible.
I can only tell everyone that you can only rely on yourself, continuously making mistakes and losing, then taking various detours, and walking to this point by feeling your way along.
(2) There are actually many ways to make money in the crypto world; some may not agree, but there are indeed people who can make money. You just haven't seen it.
His growth is exactly the same as yours; without the developed roots laid in the previous years, there will be no explosive period later.
Any success is definitely not accidental.
(3) If you want to achieve stable profits, you must go through a bottleneck period of several years, half a year learning techniques, one year practicing execution, and one and a half years practicing your mindset.
The most important thing during a bottleneck period is to minimize losses. If you are willing to spend time, use energy, and summarize well, along with a good mentor, you will succeed.
With friends accompanying you, life in the crypto world becomes much simpler.
Thinking about my years in the crypto world, transitioning from an ordinary small trader to a professional trader supporting myself through trading, it is inseparable from strictly adhering to market discipline. Today, I summarize 10 'rules of trading', each one is a gem.
If you want to survive in the market for a long time, it is advisable to save this article, think about it repeatedly, and understand these 10 rules for trading cryptocurrencies to easily earn a million a year.
These people divide all operations into going long and going short; when they hold coins, their thoughts are controlled by going long, and conversely, they are controlled by going short.
The market's sentiment accumulates and is guided this way. If you cannot escape this state, you will never become a true market participant.
These are my heartfelt words after years of trading cryptocurrencies, each one is very useful. But the hardest part is to achieve unity of knowledge and action. I hope everyone can remember these iron rules and ride the waves together in the crypto world!
Killer technique! Please keep an eye on these 8 types of price action chart patterns; the opportunity to double profits lies within them.
Price action chart patterns can be said to be a major trading tool for modern traders. Today, I will mainly introduce 8 types of price action chart patterns that have significantly impacted my trading.
Next, I will take you to understand 'BOSS' and 'BEAR' as well as more other price action chart patterns.
Price Action Pattern #1: Bullish Engulfing Strong Support (BOSS)
That is the bullish engulfing candlestick pattern that appears at a strong support level. The most important thing here is not the exact candlestick chart, but the position where it appears. Ideally, it should be just at or slightly below the support level.
As the name suggests, the BOSS model can be considered one of the best price action patterns. The above chart was taken from a book about price action and is one of the best charts describing this pattern.
From the above chart, it can be seen that after the formation of the BOSS price action chart pattern, the price experienced a significant increase.
There are many such cases; the most recent one is the BOSS price action chart pattern of EUR/USD:
The above chart has a major demand area/support level. When the price tests it, an inside bar will form and attract a large number of market participants to enter. One of the reasons I refer to this pattern as a strong support bullish engulfing is because any candlestick pattern can be a triggering factor.
Price Action Pattern #2: Bearish Engulfing Strong Resistance (BEAR)
This price action chart pattern means that the price needs to test a strong resistance level or supply zone.
The above picture was also taken from (Price Action Trading Manual).
I have found that for this price action pattern, bearish engulfing may be the best candlestick pattern. However, over long periods, this chart pattern will continuously appear.
This is an example of a GBP/USD daily chart from 2018:
From the above chart, we can see that this double candlestick bearish engulfing candlestick pattern has a very strong trend change effect. The engulfing pattern can consist of multiple candlestick bodies. Importantly, the bearish candle (red) completely engulfs the previous bullish candle (green) body. This indicates that the bears are ready to push the price in the other direction for the long term.
The BEAR price action chart pattern can be considered one of the best bearish price action chart patterns in my trading career.
Price Action Pattern #3: Inside Bar within a Trend (IBWT)
The IBWT price action pattern is one of my favorite candlestick patterns for two main reasons:
1. High reliability
2. Provides a high risk-reward ratio.
From the perspective of trading returns, this may be the highest price action chart pattern.
Let's see why I say this.
Looking at the above chart, the reason this candlestick pattern has such a high risk-reward ratio is that the closing price of the red candlestick is very close to the low of the green candlestick.
This allows for stricter stop loss settings, thus offering a higher risk-reward ratio. In other words, this means you can risk less money to earn more profit.
The following chart is another example of an inside bar in the Daily DAX chart:
You can see from the above that the inside bar allows you to use a very small stop loss to 'aim' for a larger return. The risk-reward ratio in the above chart is almost 1:12.
This means that if your entry point is 9502 and your stop loss is at 9339, you are taking a risk of 163 points; however, if the take profit target is 11349, it means the potential return of this trade is a profit of 1847 points.
I have to say, this is a very nice trade, with a risk-reward ratio of up to 11.38.
Price Action Pattern #4: Pin Bar in the Supply Zone (SUP)
The SUP chart pattern is one of the most effective bearish continuation patterns. We need the following two conditions to confirm its occurrence:
1. Major/Minor Supply Zone/Resistance Level
2. Price Rejection Price Action Pattern
The above chart is a gold 1-hour chart from October 23, 2020. We can see that the pin bar in the chart encounters resistance and falls back at the important level of $1912.
Once the price rises to the pivot level, price rejection may occur, followed by a sudden drop in price.
At this point, you need to decisively enter the market to seize these trading opportunities. As you can see, after the pin bar encounters resistance, the next candlestick will be a very long bearish candlestick.
Price Action Pattern #5: Random Resistance Rejection (RRR)
The above chart is a GBP/USD 1-hour chart. It shows a price action chart pattern called RRR (Random Resistance Rejection).
It is called 'random' because it can occur at any point in time, as well as important 'event convergence zones'.
Similar to previous price action patterns, RRR appears in different time frame charts. The rule of thumb tells us: 'The higher the time frame, the more accurate the signal.'
In this case, we observe a resistance level turning into a support level, and a pin bar forms a bounce against this level. Coincidentally, the candlestick on the daily chart is an inside bar.
This is a very good example of high probability trading. However, it is important to note not to confuse this pattern with a breakout.
Price Action Pattern #6: Demand Zone Candlestick (DZC)
The above chart is a price action chart pattern obtained from the EUR/USD hourly chart, namely the demand zone candlestick pattern.
To validate this price action pattern, we need to follow two important rules:
1. Secondary Demand Zone 2. Candlestick Confirmation
This chart pattern is very similar to the bullish strong support (BOSS). The only main difference is that it usually appears in a secondary demand zone rather than a primary demand zone. See the chart below:
Those who are familiar with me should know that in trading, I try to stay away from diagonal trend lines or channels. Here I am just showing a classic example.
Once a secondary demand area is identified, we can mark it on the chart and lie in wait near the price. When the price is 'trapped' in the demand area, what we need to do is to confirm using price action and then look for opportunities to enter the trade.
This may be one of the most powerful trend continuation techniques, and it can also be used to enforce strict stop losses.
Price Action Pattern #7: Theory and Reality (TVR)
Charts that do not perform as expected or theoretically in reality. Many traders blindly follow converging triangle patterns, but in reality, they are not as precise as people imagine.
One of the advantages of converging triangles is that they are easy to spot. The problem with this trading setup is that, because it is easy to identify, many traders will try to profit from it.
You must know that trading is a zero-sum game; it does not allow such behavior to exist. Traders who blindly chase highs become the ones who get harvested.
One of the issues with the TVR price action pattern is shown below:
When you spot this triangle pattern, most traders will expect the price to break upwards.
However, contrary to expectations, the price takes the opposite route.
The reason we did not see an upward breakout is that the price was not strong enough to withstand the test of the resistance level and began to turn down.
Before starting to decline, pay attention to the inside bar.
Price Action Pattern #8: Theory and Reality 2 (TVR2)
Let's take a look at the last price action chart pattern. Of course, this does not mean we have explained all the price action patterns. These 8 price action patterns are just some common ones in our daily trading.
So, what can we expect from price action patterns?
We see that when the price fluctuates within a range, a breakout is expected. Traders can easily fall into this trap. The closer the price gets to the resistance level, the more eagerly they buy.
Let's demonstrate it with a sketch:
Here are three situations that novice traders hope to go long:
1. The price is slightly above the midpoint of the range, I should go long, otherwise I will miss the opportunity. 2. The price is just below the resistance level, I'm worried that if the price rises too quickly, I will miss the best entry opportunity. 3. The price has just broken through the resistance level, I don't want to miss this trading opportunity.
The above three situations are typical trading methods for retail traders. This is a trap you should try to avoid.
The closer you get to the resistance level, the higher your stop loss becomes; paradoxically, the greater the chance of getting stopped out.
If you can look at it the other way around, you can gain a good trading opportunity.
Think of it this way: the closer you get to the resistance level or supply zone, the more you should go short.
Let's take the USD/CAD 4-hour chart as an example:
Seeing this situation, you might rush in to go long. However, the reality is as shown below:
So unfortunate! You didn't short, but went long...
Summary
In this article, we listed 8 types of price action chart patterns. Each has its own advantages and disadvantages. However, what everyone really needs to consider is the potential return of each price action chart pattern and the risks involved.
These trading patterns tell us that traders can easily fall into market traps, so we must strictly adhere to trading rules. Trading may be the best test of your discipline.
Remember not to rush into trades with overly high expectations. If you want to become a consistently profitable trader, it will require a lot of time, discipline, and dedication.
Finally, I wish you successful trading!
There are many common situations where emotions cut the leeks. The following three are the most common.
1. Internal fluctuations.
When a coin experiences internal fluctuations, it is actually the major players taking advantage of retail traders. During the up-and-down fluctuations, if retail traders buy more, the price will likely end in a significant drop; if retail traders sell more out of panic, the price is likely to rise after the fluctuations.
2. Chasing highs and killing lows
Chasing highs and killing lows is also the most common emotion. Behind chasing highs and killing lows is the fear of missing out and the fear of being trapped.
The emotion of chasing highs and killing lows is also easily exploited by major players. When many people chase highs, major players can easily sell off. In the morning, they may induce a lot of buying, and in the afternoon, they can crash the price to show retail traders, allowing trend-following traders to lose more than 10% in a day. Killing lows works similarly; major players just happen to do a round of washing the market, making retail traders panic and exit. It shouldn't be the coin price that chases highs and kills lows, but the trend; retail traders' half-knowledge makes them the prey of funds.
3. Bearish and bullish.
Another point is that both bullish and bearish sentiments are exploited by major players; bearish news can suppress coin prices, and it can also be interpreted as bearish news being exhausted, allowing coin prices to rise significantly. Similarly, bullish news can push up coin prices or be used to sell off.
So how to interpret bullish and bearish sentiments is determined by the funds. And how the funds operate essentially depends on market reactions and retail traders' actions. When retail traders panic, funds greedily buy in; when retail traders become greedy, funds immediately flee. Using emotions to cut leeks, funds really do it exceptionally well, almost effortlessly.
Remember! The only way for retail traders to counter emotions is to resist them.
Exploring the world of digital currency is like grasping the true meaning of life. Once you comprehend the wisdom of life, the mysteries of the crypto world will also become clear. The path of simplicity lies in the integration of knowledge and action, so that you can navigate smoothly and confidently!
Want to double your account, want to taste big profits, want to successfully recover expenses.
Stay close to the old and position yourself ahead of the bull market's main wave!
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