In my understanding, there are a few types of people who have the potential to succeed.
First, those who have continuous cash flow
Note, it is continuous cash flow, not heavy assets; heavy asset holders may have most of their assets in real estate, which is not easy to liquidate, and may also hold a large amount of cash, but these one-time assets can easily be consumed in impulsive investments. Especially when position management is poor, it is easy to rush in; once a major pullback occurs, one becomes helpless, just like this time.
Those who have continuous cash flow are like having unlimited bullets. On one hand, these people will not be forced to use their investment targets due to sudden changes, such as family illness requiring a large sum of money. Do you have to sell your investment targets to raise funds, regardless of whether it is currently losing or making a profit, or even sell property to respond to emergencies? On the other hand, when encountering good targets or suitable opportunities, they always have funds to buy. Just like the recent pullback, those with continuous cash flow have the initiative.
Second, those who manage positions well
I have seen people who manage positions well; they will never shoot all the bullets they have. Such people may earn a little less, but they know that not all 100% profits are obtainable. Position management is risk management; leaving some leeway for oneself will make one unafraid of pullbacks. Over the years, I increasingly feel that all experts are experts in position management.
Three types of people who have in-depth research on projects
I know at least three friends who have made a million in the cryptocurrency market, one of whom only entered the market at the beginning of last year, and at that time his principal was only 100,000. Through the Lightning Network project, he reached A7, and his target for this round is A8. I once asked him how to do research; he said something that helped me a lot: 'Go follow more than 100 blockchain influencers and see what they pay attention to and discuss every day. Then analyze comprehensively by yourself; new opportunities are usually due to technological innovations, with grand imaginative space, and not fully explored by the market yet, but this requires your luck and understanding. Try small amounts to test.'
I think not many can do this, after all, most people are giants in words but dwarfs in actions.
Four: Those who stick to making small profits
Making small profits really doesn't require you to take on too much risk; buying coins is different. Theoretically, all cryptocurrencies have the possibility of going to zero, including Bitcoin, so holding coins is a highly risky endeavor.
Making small profits does not require you to have a lot of funds, nor does it require you to be very smart; you only need a computer and some tools, and to stay diligent. There are plenty of tutorials online for making small profits; just follow them, and even if the returns do not reach millions, they are quite considerable, you just need to wait sometimes.
Finally, I want to say, no matter what you do, don't be a hand-stretched party; whether it's investing or making money, it's something you must participate in personally. Others can at most give you a push; ultimately, it still relies on yourself.
My personal account has grown from 300,000 to 2 million over nearly 10 years, but upon reaching 2 million, it seemed to open up a breakthrough, directly soaring to 30 million. I summarized six keywords; they are short yet very real. If you want to play in the cryptocurrency market for the long term, this article is worth reading carefully. After reading, you will also have an epiphany!
There are four main elements in trading: technical indicators, trading strategies, capital management, and trading discipline.
If we were to score the importance of these four elements, Qing Tian believes that technical indicators score 20 points, trading strategies can only score 20 points, and capital management scores 15 points.
Why do these three add up to only 55 points, while trading discipline accounts for 45 points?
Imagine someone who has mastered technical indicators, trading strategies, and capital management. If they lack trading discipline and iron-clad execution, then none of their trading strategies can be realized.
Trading discipline is not only a requirement for executing trades but also a skill summarized from practical trading, strict adherence and execution are particularly important for traders.
Correct trading discipline can help you profit easily, while incorrect trading discipline can lead to heavy losses.
Therefore, trading must first have a good trading discipline, and secondly, it must be strictly followed.
Imagine someone who has mastered technical indicators, trading strategies, and capital management. If they lack trading discipline and iron-clad execution, then none of their trading strategies can be realized.
Such people can be very good analysts, but they are certainly not profitable traders.
Trading discipline is not only a requirement for executing trades but also a skill summarized from practical trading, strict adherence and execution are particularly important for traders.
Correct trading discipline can help you profit easily, while incorrect trading discipline can lead to heavy losses.
Therefore, trading must first have a good trading discipline, and secondly, it must be strictly followed.
Now I will share with you the trading iron rules I adhere to:
Recommended to bookmark, look at it once before trading every day to improve your profit level!
There are four main elements in trading: technical indicators, trading strategies, capital management, and trading discipline.
If we were to score the importance of these four elements, Qing Tian believes that technical indicators score 20 points, trading strategies can only score 20 points, and capital management scores 15 points.
Why do these three add up to only 55 points, while trading discipline accounts for 45 points?
Imagine someone who has mastered technical indicators, trading strategies, and capital management, if they lack trading discipline and iron-clad execution, then none of their trading strategies can be realized.
Trading discipline is not only a requirement for executing trades but also a skill summarized from practical trading, strict adherence and execution are particularly important for traders.
Correct trading discipline can help you profit easily, while incorrect trading discipline can lead to heavy losses.
Therefore, trading must first have a good trading discipline, and secondly, it must be strictly followed.
Imagine someone who has mastered technical indicators, trading strategies, and capital management. If they lack trading discipline and iron-clad execution, then none of their trading strategies can be realized.
Such people can be very good analysts, but they are certainly not profitable traders.
Trading discipline is not only a requirement for executing trades but also a skill summarized from practical trading, strict adherence and execution are particularly important for traders.
Correct trading discipline can help you profit easily, while incorrect trading discipline can lead to heavy losses.
Therefore, trading must first have a good trading discipline, and secondly, it must be strictly followed.
Now I will share with you the trading iron rules I adhere to:
Recommended to bookmark, look at it once before trading every day to improve your profit level!
One. Overall trading discipline
Trading discipline is the macro rule for controlling risk, aimed at avoiding human psychological weaknesses and mood changes, helping to control the frequency of trading after mood changes, etc. It is the first component of the trading system.
1. Macro discipline
(1) If there are three consecutive losses, you should force yourself to rest, not trade blindly, analyze the reasons for your losses, adjust your mindset, and then look for opportunities to enter.
(2) If consecutive trading profits exceed 50%, then mandatory rest.
(3) Daily trading should not be too frequent.
(4) After a stop-loss, do not engage in reverse trading within 3 hours.
2. Discipline before entering
(1) Do not enter during quiet times.
Before holidays and weekends, market trading is light, and fluctuations are minimal; trading is obviously not suitable at this time.
(2) Trade in clear trend cryptocurrencies, do not trade in unclear trend cryptocurrencies.
(3) When going long, only trade strong cryptocurrencies, and when going short, only trade weak cryptocurrencies.
(4) Trading must at least include four basic elements: entry price, stop-loss price, target price, and position control.
(5) When the market's volatility is small, do not trade within a range.
3. Discipline after entering
(1) If short positions profit exceeds 30 points, then immediately raise the stop-loss to near the cost price.
(2) Execute trading plans at the same time level. For example: operations based on the hourly chart cannot be rashly changed due to adverse short-term signs appearing on the 30-minute chart.
Active exit must have clear rules, that is, clear exit rules.
(3) After entering a counter-trend position, if losses occur, do not change to a mid-term position for any signal. Short-term counter-trend trading positions should not be held overnight.
Two. Principles of building positions
1. Principles of building positions in the direction of the trend
An upward trend will never stop rising because of excessive gains, and a downward trend will never stop falling because of excessive losses.
The biggest characteristic of a trend is continuity; building positions in the direction of the trend is the relatively least risky way to build positions.
Principle:
Entry: Be cautious at all times when entering, even for trend operations; trading must be based on evidence, and risk must be strictly controlled.
Position: The trend has no change signal, firmly holding confidence.
Profit: Follow the trend, continuously raise the stop-loss, and do not predict high points to grasp the continuity of the trend.
Consider buying when the price rebounces at the trend line support during a pullback, as well as buying when breaking through the previous high; do not easily take reverse positions unless there is a clear trend reversal signal.
2. Counter-trend position building principles
When building positions against the trend, it is particularly taboo to be greedy for cheap; under no circumstances should the fact that the drop is already particularly large be used as a reason for building positions.
Particularly note: Do not engage in small-level counter-trend trading.
Principle:
a: Control is the first priority in counter-trend trading, preventing irreparable losses.
b: Give up. Rebound opportunities will always appear, but many rebounds are not suitable for trading: small-level rebounds, weak rebounds, the first wave of rebounds. These opportunities are all significant risk opportunities.
c: Before confirming the trend reversal, counter-trend trading must be quick to enter and exit, and not linger.
d: Trading against the trend without basis. Trend trading can sometimes be even baseless, as long as you can control the risk; but in counter-trend trading, even if you can control the risk, do not trade without basis.
Three: Principles of closing positions
As exit signals for trend trading, mainly adopt Dow Theory, channels, wave analysis, K-lines, K-line combinations, moving averages, MACD, and other indicator signals.
Note 1: Exit signals for trend trading also require multiple signal validations before being considered as exit signals; while in counter-trend trading, a reliable signal can serve as an exit signal.
For example:Using channel exit signals: resistance generated by the channel is often seen as an exit signal, but it is also necessary to differentiate between mid-term and short-term concepts, and it does not necessarily always serve as an exit signal.
For example:In an upward trend, the upper edge of the upward channel does not necessarily serve as an exit signal in trend trading; it is merely a warning not to continue building long positions.
Finally, when the channel undergoes a reverse breakout, it is seen as a correct exit signal for trend trading.
Note 2: The exit signals generated by the analysis method are best to be signals of the same level.
For example: If the signal on the hourly chart is to go long, then the exit signal should also come from the hourly chart or a higher time frame, and should not use exit signals from below the 30-minute chart.
In the process of holding positions in the direction of the trend, if there are counter-trend building rules signals of the same level, then it is necessary to exit or reduce the position of the trend position, or to further follow up the stop-loss to a very close support position.
You can also set stop-losses based on short-term in mid-term trading to achieve the goal of protecting positions as much as possible.
When engaging in counter-trend trading, if a trend trading signal has already been issued, then the counter-trend position must exit; at this time, the exit signal is equivalent to the entry rule for trend trading.
Four: How to set stop-loss
1. The necessity of stop-loss
A useful and simple trading rule - 'Alligator Principle'. This principle comes from the way alligators devour: the more the prey struggles, the more the alligator gains.
Assuming an alligator bites your foot, if you use your arm to try to break free, it will bite both your foot and arm. The more you struggle, the deeper you get trapped.
So, if an alligator bites your foot, remember: your only chance of survival is to sacrifice one foot.
If we express this principle in the language of the cryptocurrency market, it is: When you know you have made a mistake, immediately stop loss and exit! Do not look for excuses, reasons, or expectations, hurry up and leave.
2. How to set stop-loss
(1) Point stop-loss setting method: such as 30 points, 40 points, 50 points, etc., choose the appropriate points based on different trading cycles.
For short-term trading, it's best to choose a stop-loss of around 30 points, while for medium-to-long-term trading, the stop-loss should also be kept within 100 points.
(2) Set stop-loss levels based on recent highs and lows: generally choose 10-20 points above the high or 10-20 points below the low. (As shown in the figure)
(3) Setting resistance and support levels for technical indicators: mainly moving averages, trend lines, Fibonacci retracement.
For example, as shown in the figure: Five: How should positions be controlled
(4) K-line pattern reference for setting: mainly trend line tangents; head-and-shoulders or arc top necklines; upper and lower bounds of channels; edges of gaps.
(5) Integer price levels of cryptocurrencies: mainly because integer price levels have a certain support and resistance effect on the psychology of investors.
Five: How should positions be controlled
1. Total position control rules
In total position control, already profitable positions and those locked in risk-free can be excluded from calculation.
a. Trend trading
We divide positions into light, medium, and heavy positions, so in trend trading, you can keep medium positions as positions that follow market trends, with other positions as liquidity positions.
Specific divisions can be adjusted according to the investor's personal preferences: those who value short-term operations can increase liquidity positions, while those who value mid-term operations can reduce liquidity positions.
b. Counter-trend trading
Position control in counter-trend trading is more important, in most cases, you can only take light positions; for very mature and highly successful trading rules, you can appropriately increase the position to a medium level.
In counter-trend trading, unless there is a clear directional reversal, there are no heavy position trading opportunities.
c. Trading in a sideways market
Position control in a consolidation market is relatively strict. Before the breakout of the consolidation area, do not operate with heavy positions; after the breakout, you can gradually increase the position.
2: Rules for adding positions
Six: Choosing trading times
1. Methods for adding positions
Equal allocation for adding positions: that is, every time a position is established, the position allocation is consistent, neither increasing nor decreasing.
Pyramid adding position: that is, every time a position is established, it is smaller than the position already established in the previous time (when not closed). This situation is often used in trend adding positions.
Reverse pyramid adding position: that is, every time a position is established, it is greater than the position already established in the previous time (when not closed).
2. Use in different trends
Trend trading: mainly adopt equal allocation for adding positions, pyramid adding positions; for multiple builds within the plan, a reverse pyramid adding position can be used based on evidence.
Counter-trend trading: for short-term trading, do not use any adding position methods, only establish positions once; for mid-term trading, you may appropriately add positions based on short-term trend trading, but the adding position method can only use pyramid adding.
Sideways market trading: Before breaking through the sideways range, do not use any adding position methods, only establish positions once; after breaking through the sideways range, you can use equal allocation for adding positions and reverse pyramid adding positions.
Six: Choosing trading times
1. Times when it is easy to lose money in trading:
2. Selection of trading periods
Friday: The market on Friday is the hardest to predict.
Holidays: The trading volume at this time is very low, especially the holidays in the United States and the UK have a significant impact on the market, and many banks and institutional investors do not participate in trading.
Market fluctuations may be very small, and there is also a possibility that due to low trading volume, market movements may be magnified, with prices soaring or plummeting in the short term, making it difficult to grasp.
News, data: Before the release of data or news, we can hardly predict the direction of price movement. If you trade rashly before you have a corresponding method in hand, the result may cause you great pain.
2. Selection of trading periods
Seven: Finally
During this period, many important data releases and news events will occur in Europe and the United States, making it the trading period with the most significant fluctuations and the most participants, and also the best trading period.
For Chinese people, even if work prevents them from catching the afternoon trading session, they can still trade during the overlapping periods of European and American markets.
Of course, if your job is special and you can only trade during inactive trading periods, you must also adhere to discipline and focus on studying the market's operational rules during these special periods.
Seven: Finally
Trading discipline is particularly important; I believe you will no longer trade arbitrarily; knowing how to enter, how to close positions, how to control positions, etc., your profit level will definitely improve.
But trading is not just about knowing the trading rules. Many times, trading is counter to human nature; many people have very good trading strategies and rules, but because of human weaknesses, they cannot execute them strictly, making it difficult to reach the level of experts.
The real strength of a trading expert is not having unique trading rules, but being able to strictly execute their own established rules.
Now I will share with you the basic concepts of the cryptocurrency trading system, market analysis, investment strategies, risk management, technical tools, ecological applications, regulatory policies.
Why, in a bull market, do most people still remain in a losing state? The main reasons are the following three!
1. Choosing the wrong cryptocurrency
In this round of the bull market, altcoins are not completely hopeless, but among all targets, only a few can rise; when one has insufficient understanding of the industry's development, one can only pick up the leftovers. If one does not understand the coins they bought, even if they are lucky enough to buy a rising one, they only bought a small position, while most of the funds are in loss.
2. The timing of the purchase is incorrect
Choosing the wrong cryptocurrency and lacking understanding of the fundamentals, but at least through the technical aspects, you can increase your winning probability and reduce the chance of loss. When you are optimistic about a coin that is rising well, you can also look at the market to see if you can enter later, so as not to chase in at a high point.
3. Can buy but not sell
There are few coins that can rise, and it does not rule out that some people have good luck and can encounter rising ones. The problem is that they don't know how to sell; either they take a small profit and run, or they hold on foolishly when the market peaks, missing good opportunities. Heaven provides opportunities, but if you don't work hard to improve, you won't have the strength to seize them.
No matter how diligent a fisherman is, he will not go out to sea for fishing during stormy weather; instead, he will carefully guard his boat. This season will eventually pass, and a sunny day will come! Follow me for both fish and fishing skills; the door to the cryptocurrency market is always open. Only by going with the trend can you have a life of following the trend. Bookmark it and keep it in mind!
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