I've been in the cryptocurrency market for several years now. From being a small retail investor with 50,000 yuan at the beginning, I have struggled in the market and now achieved a level of tens of millions. Today, I’ll share my personal experience with everyone.
Let's first talk about capital management; never put all your money in at once. I prefer to operate in batches, so even if I lose, it won't be too severe. I have set a rule for myself: once I lose to a certain extent, I decisively withdraw, regardless of what the market is like. This way, even if I experience several consecutive losses, I won't be severely impacted. However, if I earn, the gains can be substantial. Even if I get stuck, I can maintain my mindset.
Going with the market trend is always correct. During market downturns, don't keep thinking about bottom fishing; it's unrealistic. Opportunities arise when the market rises and retraces, making it much safer to buy low than to stubbornly try to catch the bottom.
Choosing cryptocurrencies requires vision; be cautious of those that surge suddenly, whether mainstream or altcoins. Rapid increases often lead to equally rapid 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 zero axis and then break through the zero axis, it is a buy signal. If they cross above the zero axis and then move downward, you need to reduce your position. Don't easily attempt to average down. If you're losing, don't add more; many people end up losing more by averaging down and losing everything. Remember, losses should be cut, and profits should be added.
Trading volume is also crucial. When the price breaks out at a low level, if the trading volume expands, it could be a significant opportunity.
The key is to go with the trend and seize opportunities. Combine daily and monthly charts for comprehensive judgment; when a line turns upward, you should 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 applied to the cryptocurrency market can be summarized in six key points.
First, average prices encompass and digest all factors. Fundamentals, policies, news, and capital can all affect supply and demand, and all of these factors will be directly reflected in the market, ultimately being absorbed and digested by price changes.
Second, the market has three types of trends. Dow classified trends into three categories: major trends, necessary trends, and short-term trends.
Major trends are like the tides of the sea, representing long-term trends, similar to the cyclical seasons in the cryptocurrency market, with endless cycles of bull and bear.
Minor trends are like waves in the tide, representing pullbacks in the major trend. Generally, pullbacks occur at three important Fibonacci levels: 38%, 50%, and 62%. Short-term trends are ripples, indicating slight fluctuations that have high uncertainty and can change quickly.
Third, major trends can be divided into three phases. The first phase is the accumulation phase, similar to darkness giving rise to light, indicating the end of a bear market. Although everyone is bearish, prices have fallen as low as they can go, and at this time, the main force begins to accumulate stocks in batches.
The second phase is the bullish attack phase, where favorable news begins to emerge, and most retail investors with some technical knowledge gradually enter the market, leading to a gradual price increase.
The third phase is the climax sprint. At this time, major media outlets begin to flood with good news, boldly predicting further price increases. Retail investors actively buy in, and no one wants to sell, fearing they might miss this once-in-a-lifetime opportunity to make money. However, in reality, the main force that bought at the bottom has already started to unload.
Fourth, various average prices must mutually validate each other. For example, both Bitcoin and mainstream cryptocurrencies must have a joint increase that exceeds previous mid-trend peaks to be considered the onset of a large-scale bull market! Similarly, if both Bitcoin and mainstream cryptocurrencies experience a joint decline that breaks below the neckline of the high-level consolidation phase in a bull market, it must be verified.
Fifth, trading volume must validate trends. Dow believed that volume is second in importance to technical analysis. When prices follow a major trend, trading volume should also increase correspondingly.
Sixth, we can only determine that a given trend has ended after a clear and undeniable reversal signal occurs. A significant trend has inertia and generally continues to move in the primary direction for a while longer. Therefore, it is essential to wait for confirmation of a trend reversal, such as the head and shoulders pattern confirming a break below 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, akin to capturing the most delicious part of a fish.
Its advantage lies in successfully determining the major trends of bull and bear markets, but its disadvantage is also evident: signals are often delayed, and generally, it will miss out on 20%-25% of profit opportunities.
Share trading insights:
1. Regularly invest in mainstream and leading cryptocurrencies. Dollar-cost averaging has a higher probability of making money than going all in at once. If you invest all at once and the price drops later, it becomes difficult to buy more at lower prices. Watching prices drop without accumulating more can be very frustrating, missing the opportunity to lower your cost basis. Even in a bull market, your returns will be significantly less.
2. Enhance the ability to make money off the exchange.
In the market, the main focus is buying cryptocurrencies and accumulating them. If you want to hold onto them, you also need to enhance your ability to make money off-exchange. Your ability to make money depends on your work. If you have a lot of free time, invest more in yourself, learn more skills, and follow me to turn traffic into cash.
3. Invest more in areas you are familiar with.
Invest more in areas you are familiar with, as this allows you to better control risk. Investing in unfamiliar areas can lead to greater losses. Investing in familiar fields increases cash flow, and with cash flow, you can achieve higher returns, thus not having to sell your valuable coins due to price drops.
4. Deeply study the techniques of speculative trading.
Familiarize yourself with the development trajectory of high-return cryptocurrencies. You need to establish your own profitable trading strategy and continuously optimize your coin selection and timing through practice.
Tips for learning to trade cryptocurrencies:
1. Invest with spare money, and avoid borrowing to trade cryptocurrencies - invest money + invest energy.
2. Rigorously filter for valuable cryptocurrencies and create a reasonable capital allocation plan that aligns with reality - the Sunny Investment Strategy.
3. Averaging down - it's normal to have a pullback after entering the market, so allocate your funds reasonably and enter in batches.
4. Refuse to go all in, allocate positions reasonably; don't put all your eggs in one basket to effectively reduce risk.
5. Keep an eye on all directions - pay attention to cryptocurrency news and the latest financial information. The earlier you know, the better insight you gain, and the earlier you can make money.
6. Think in reverse; do not go against the market or the traders, go with the flow, and follow the trend.
7. Open contracts, not fully invested, leverage below 5 times, avoid 100x leverage, and don't seek to get rich overnight. Instead, focus on stable profits.
8. Control your own position - managing your own position is more important than anything else. If you're unsure, don't operate easily. If you don't operate, there's no risk, and you won't lose money. Take some time to look at your assets to see if they are managed and if the management is reasonable.
9. The bottom is in your mind, the top is in your mind. Don't be afraid; the cryptocurrency world will only help you grow. Your mindset is more important than your operations. Remember the methods of trading cryptocurrencies, and you won't worry about not making money!
Investing is not a competitive game; it's a personal journey of self-cultivation.
In fact, there's another saying: every penny you earn is a manifestation of your understanding of the world.
Spend an evening organizing six iron rules for trading cryptocurrencies. The content is not extensive, but it's full of valuable insights. If you don't plan to leave the cryptocurrency market in the next three years, these six rules will assist you greatly!
Want to double your account, want to enjoy big profits, want to successfully recover losses.
Stay close to the rain, pre-position for the main wave of the bull market!
Continue to focus on: BTC ETH BNB.