Everyone's original intention to come to the currency circle + is the same, there is no doubt about this. If you are just holding a playful attitude to pass the time, then this is not suitable for you. We come to the currency circle to be able to earn more income and make our families live a better life. If technology is the premise of profitability in the market, then the iron laws that need to be strictly adhered to are the key to long-term profitability.
If you want to treat speculating in coins as a second source of income, want to share a piece of the pie in the currency circle, and are willing to spend time growing and learning, then don't miss this article. Read it carefully. Every one is the essence of the currency circle. It can be said that whether it is a bull market or a bear market, these 10 iron laws can help you! I will also talk about my ten years of experience in speculating in coins later!!
As a full-time coin speculator, I have always kept in mind the 10 iron laws of coin speculation, and printed them and pasted them on my computer desk and bedside to remind myself at all times.
Every iron law is a summary and sublimation of countless practices, and it is worth reading it ninety-nine eighty-one times!
10 top-level thinking that can continue to survive in the currency circle and make big money:
In the ever-changing world of the currency circle, if you want to get results, you must take the initiative to learn and improve your thinking.
Like Charlie Munger+ said: When the opportunity comes, you have to invest boldly.
When you can't sleep because of investing, it's not necessarily because you've invested too much, it may be because you're not confident in the target you've chosen, or you've used leverage and the risk far exceeds what you can afford.
In the past, when buying a house, the whole family emptied all their savings, and even borrowed money to buy it, but they could sleep peacefully.
There is no essential difference between speculating in real estate and speculating in coins. As long as the leverage is high, you can't sleep, especially now.
10 top-level thinking that can continue to survive in the currency circle and make big money, remind all coin speculators to keep in mind:
These valuable advice are the crystallization of wisdom from many years of practical experience, which is worth thinking about carefully and strictly following. It is hoped that these suggestions can help everyone take fewer detours in the market and move steadily towards success.
These are my heartfelt words after many years of speculating in coins. Every one of them is very useful. But the most difficult thing is to achieve the unity of knowledge and action. I hope everyone can remember these iron laws and ride the wind and waves together in the currency country!
The most important position management in making orders* is to protect everyone. Once you learn it, speculating in coins is like turning on a cheat, taking off in place!
Whether in the stock market or the currency market, if you do a good job in position management, you will outperform most people.
The theme I am sharing with you now is the management of trading positions. Whether it is spot or contract, how the position is managed directly determines your degree of risk control, average holding price, and final return. This can be said to be the most important point besides direction and mentality.
Position management includes capital management and risk control. Don't understand the surface meaning of the two words 'position'. Position is more about expressing when to add a position, how much to add, what position to reduce a position, and how much to reduce. That is, the roadmap of 'entering the market, adding a position, reducing a position, and exiting the market'.
So what is a position?
Position refers to the proportion of the total amount of money you use for trading and the amount of money that has been traded.
For example, if you have 100,000 yuan for trading and you have already used 30,000 yuan to buy coins, then your position is 30%, which is 3 layers. This buying behavior is called opening a position or establishing a position.
If half of the total funds are used to buy, it is called half position. If the funds used to buy account for a small proportion of the total funds, it is called a light position. If the proportion of the total funds is large, it is called a heavy position. Buying again after opening a position is called adding a position. Selling part of the position is called reducing a position. All selling behavior is called clearing a position. Holding temporarily without selling is called holding a position. Always keeping part of the position without operating is called the bottom position. Selling all and not buying again is called an empty position.
Six basic principles of position management:
First: Do not operate with a full position, always maintain a certain percentage of standby funds
Operating with a full position is like fighting a war without a reserve force. Especially when the market is unstable, operating with a full position will cause a passive situation of difficulty in buying and selling if it falls. Selling will cause losses, and if you don't sell, there is no extra funds to add to your position to dilute the cost. When other market conditions come again, there are no funds available or you have lost out. Holding with a full position will cause a mental imbalance due to market fluctuations. Operating with a full position is more likely to cause liquidation than the imaginary overnight wealth
Second: Buy and sell in batches to reduce risk, dilute costs, and amplify returns. The advantage of buying in batches downwards and selling in batches upwards is that your average price is lower than others and your returns are higher.
Second: When the market is weak, you should hold a light position, and it is best not to exceed half a position in a bear market. You can appropriately hold a heavy position in a strong market, and it is recommended that the extreme position be 8 layers in a bull market, and the remaining 20% is used for short-term or reserve funds to deal with unexpected events.
Fourth: As the market changes, corresponding position adjustments should be made, appropriately adding or reducing positions
People are alive, and when the market is strong, I can appropriately reduce my position to grab some profits. When the market is weak, I can appropriately add to my position to reduce costs. This is the corresponding adjustment action.
After adding a position, a small rebound in price will also be very close to the cost or exceed the cost.
For example: when the trend is clearly downward, the position should be reduced. When the trend starts to stabilize and rise, the position should be increased. When you are not sure about the market and cannot understand it, do not take a heavy position or easily add positions. You can add positions when you see support, reduce positions when you see pressure, and realize profits.
Fifth: When the market is sluggish, you can wait for opportunities to come in a short-term vacant position.
In the late bull market, the early bear market, or before the bottom stabilizes, you can temporarily empty your position or hold a light position to wait for opportunities, but as long as you want to fight in this market for a long time, do not empty your position for a long time, because if you do not participate for a long time, you will slowly lose your sensitivity to judging market changes, market sense, etc. Or you can operate in the bear market with a small amount of funds, summarize experience and skills, and exercise market sense. You can make corresponding layouts in the late bull market and the early bear market. This is very important.
Sixth: Change positions: keep strong currencies and sell weak currencies
Whether it rises or falls, as long as there is fluctuation, it is a good market. If there is fluctuation, there is a chance to make money. If a currency has been trading sideways for a long time or the fluctuation range is small, you need to flexibly change positions. Don't fall in love with a certain currency. You should make rational choices. Seize other market opportunities.
The above 6 principles apply to spot and contract
The method of position management is batch operation
Batch operation refers to dividing the invested funds, opening positions in batches, adding positions or reducing positions. Batch operations can be completed in one day or over a period of time.
Why do you want to do these actions? Because the currency market is unpredictable, and rising and falling are high-probability events. No one can accurately predict short-term price fluctuations, so you must leave enough funds to cope with unpredictable fluctuations.
If you operate with a full position without enough certainty, it will bring huge losses once the market changes in the opposite direction. Therefore, you can reduce the risk of full position investment by batching, which can dilute the cost and is the basis for reducing costs and amplifying returns.
How to divide into batches: divided into equal share batch and non-equal share batch
First: Equal share allocation, also known as rectangular buying and selling method, refers to dividing funds into several equal shares, buying or selling in sequence, and the proportion of funds bought and sold each time is the same. Usually use 3 or 4 equal shares. For example, first buy 30%, and then buy 30% if you start to make a profit. If you don't make a profit, you will not intervene with new funds for the time being. When the price of the currency reaches a certain high point or the market changes, reduce your position in batches and sell.
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Second: Non-equal share allocation, refers to buying or selling funds in different proportions, with proportions of 1.3:5, 1:2:3:4, 3:2:3, etc. The shapes generated according to the proportion are divided into: diamond, rectangle, hourglass, etc. The commonly used is the pyramid buying and selling method+
Third: Compare the same funds, the same position, using different methods.
Pyramid: Buy 5 layers at 1000, buy 3 layers at 1100, buy 1 layer at 1200, average price 1055
Inverted pyramid: Buy 1 layer at 1000, buy 3 layers at 1100, buy 5 layers at 1200, average price 1144
Equal share rectangle: Buy 3 layers at 1000, buy 3 layers at 1100, buy 3 layers at 1200, average price 1100
Price rises to 1200, profits are respectively: Pyramid 145, Inverted Pyramid 56, Rectangle 100
Price falls to 1000, losses are respectively: Pyramid +55, Inverted Pyramid -144, Rectangle -100
By comparison, it can be seen that the pyramid type has the least cost, and the profit is greater when the price rises. When the price falls, the risk is stronger. The inverted pyramid is the opposite. If the price falls to 1000, the inverted pyramid loses 144. In actual application, it is more reasonable to adopt the positive pyramid method when buying and the inverted pyramid method when selling.
After the currency price has fallen sharply, when it bottoms out and it is uncertain whether it has reached the bottom, if we buy at this time, we are afraid of continuing to fall and being trapped. If we don't buy, we are worried about the market reversing and rising. We can use the pyramid opening method.
Two position management methods:
1. Left side position management
(1) Do not invest all the funds in your hand at one time, you should buy in batches.
You can divide the funds into several parts. When you cannot accurately judge the bottom, buying in batches is the most appropriate way to average the cost price (2).
(3) The bottom line for adding positions should be flexibly handled according to changes in the market situation. Do not add positions too frequently, otherwise the effect of averaging the currency price will be poor. Investing 20%, 30%, and 50% first is suitable for aggressive investors who are keen on bottom fishing.
(4) The amount of funds initially entering the market is relatively small. If the purchase market price does not rise but continues to fall, the position should be gradually increased in the future, and the proportion of the position should be gradually increased to dilute the cost. This method has a small initial risk, and the higher the funnel, the more considerable the profit.
1. Right side position management
(1) Buy 1: When the 5-day moving average crosses the 10-day moving average upward, increase the position by 30%.
(2) Buy 2: When the currency price effectively breaks through the lifeline, continue to add 30% of the position when stepping back on the lifeline to ensure that the total position in the early stage of the upward trend reaches 60%.
(3) Buy 3: Break through the neckline or other important pressure levels, and step back to stabilize again, indicating that the reversal and upward trend is established, and increase the position by 20% again. The total position should reach 80%, hold the currency and wait for it to rise.
(4) Buy 4: The 5-day moving average appears golden cross with the 10-day moving average again above the lifeline. This is a typical signal to step on the accelerator and accelerate the rise. At this time, the remaining 20% position should also be bought in time to maximize the benefits.
Finally, let me talk about a few suggestions I personally have for making good trades.
First: Technical aspect, including technical indicators, K-line patterns, trading volume. Trend judgment, bull recognition, grasp of buying and selling points, judgment of support and pressure, application of volume, price, time and space, etc.
This varies from person to person. Some people don't understand technology and are not interested, so there is no way.
Second: Fundamental analysis, including related macroeconomics, policies, regulations, project itself, etc.
Third: News, negative and positive news, operate in the case of good news and fundamentals.
Fourth: Time cycle, intraday short-term, medium-short-term, medium-long-term, long-term (trend trading), confirm the trading cycle and achieve operational cycle consistency. For example, if you do long-term, do not frequently buy and sell operations in the short term. When doing long-term trends, intermediate adjustments and fluctuations are acceptable as long as there is enough space, and it is a mainstream currency, the price will rise again.
Fifth: Mental control, remember not to shake, implement the plan once it is done, don't discount it
These are all personal experiences. If you learn them, they are yours. If you don't learn them, there is no way.
Two key points, first, the method and function of position management, and second, the instructor's personal experience and suggestions
Finally, the instructor will share with you the core secrets that I have been speculating in coins for more than 10 years and have been able to achieve financial freedom and class leap: the art of stop loss and take profit + and capital control
、The art of stop loss and take profit
Foreword: In the process of financial trading, there must be a problem of entering and exiting the market. Entering the market should be based on the principle of following the trend, and exiting the market involves the issue of stop profit and stop loss. It is recommended that investors who operate in the short and medium term consider adopting a semi-automatic trading model, manually buying in, and mechanically selling through automatic trading software with stop profit and stop loss functions. Buying should be slow, requiring at least 3 or more reasons, and selling should be fast, but when rising or falling breaks, you should immediately close the position. Losses should be small, and profits should be large. How to coordinate needs to be adjusted according to individual circumstances.
Stop loss is relatively simple compared to take profit, but people's hearts are very painful when executing the stop loss plan. From a trading principle point of view, you should hold the profitable orders and stop the loss of the losing orders in time, but in practice it is often the opposite. Traders often have a fluke mentality once their orders are trapped, hoping that the market will reverse according to their wishes and are unwilling to adjust the losing positions. I have seen many investors in practice, and there is a common phenomenon: profitable orders are closed very happily, but it is difficult to stop the loss of losing orders.
The necessity of stop loss
Investment itself is not risky, uncontrolled investment is risky. Learn to stop loss, and never fall in love with losses. Stop loss is far more important than profit because capital preservation is always the first priority, and profit is the second. Establishing reasonable stop loss principles is quite effective. The core of prudent stop loss principles is not to let losses continue to expand.
Why is stop loss so difficult
Understanding the meaning of stop loss is important, however, this is not the final result. In fact, there are many examples of investors setting stop losses but not executing them. In the market, the tragedy of being swept out of the house is staged almost every day. Why is stop loss so difficult? According to the reflection effect, it is the trader's adventurous spirit that is at play. There are three specific reasons:
First, the fluke mentality is at play. Although traders also know that the trend has broken, they are too hesitant and always want to take another look and wait, leading to missing the great opportunity to stop the loss;
Second, frequent price fluctuations will make traders hesitate, and frequent wrong stop losses will leave traders with lingering memories, thereby shaking the trader's determination to stop losses next time;
Third, executing stop loss is a painful thing, a bloody process, and a challenge and test of human weaknesses.
In fact, we can't be sure whether each transaction is in the correct state or the wrong state. Even if we make a profit, it is difficult for us to decide whether to exit immediately or hold and wait and see, let alone in a loss state. The instinct of human nature to pursue adventure and greed will make every trader unwilling to earn less and even more unwilling to lose more.
Therefore, strictly implementing the stop profit and stop loss plan involves a good trading mentality, which is the issue of self-discipline. Traders need to cultivate good self-discipline in trading.
Methods of stop loss and take profit
1. Take profit method
First: Reversal take profit. Traders have a set of trading and capital management plans. When making plans, there should be an entry price and a profit target. When you trade with the trend, as long as it is a profitable position, you should hold it. If the trend does not change, the position does not change. When the market price reaches important support and resistance levels, pay close attention to the market trend and use various methods to analyze and study whether the market has signs of reversal. If you think the market has reversed, you should take profit.
Second: When you have chosen the right time to enter the market and enter the market according to the trading plan, it proves that you are trading with the trend, then you should firmly hold your position and let your position profit with the changes in the market. When there is an adjustment, there is no need to be alarmed, and you should still hold your position. But there is one situation where you must close the position, that is, when the market price pulls back to the vicinity of the price at which you opened the position, and almost all of your position's profit is eaten up, you must stop the profit and close the position.
Third: When you trade with the trend and the profit portion of your position is relatively large, and you are very worried about market adjustments, or the market price reaches the support or resistance price, you can also use the progressive take profit method to avoid risks and expand your results. For example, you have established a short position, and the market has been falling all the way, and the profit of your position is quite large. When the market price falls to a relatively obvious resistance level in history, you can reduce your position by 1/3 or half of the position, continue to hold the remaining position, and observe the trading situation near the resistance level. If it crosses the resistance level and continues to fall, you should restore the position that has been closed again: if the market price shows signs of reversal near the resistance level, you should close all positions and take profits.
2. Stop loss method
First: Moving average (5-day, 10-day, etc.) stop loss method. In the moving average tactics, Lao Xia mentioned the attractive effect of the moving average on the price. The 5-day and 10-day moving averages will have a suppressive and supportive effect on the price. When the currency price breaks through the support of the moving average downward or breaks through the pressure of the moving average upward, the long or short positions held by the trader should all stop loss and leave the market.
Second: Stop loss method for the highest price pullback (3%, 5%, etc.). When the held long position pulls back from the periodic high point and the decline reaches 3% or 5%, choose to stop loss and leave the market.
Second
Breakthrough stop loss method (important support/resistance, trend line, neckline, etc.). When the market runs below the support level, the upward trend line, the neckline, etc., the established long position should immediately leave the market to avoid expanding losses; conversely, when the market runs above the resistance level, the downward trend line, the neckline, etc., the established short position should immediately leave the market.
Third
Breakthrough stop loss method (important support/resistance, trend line, neckline, etc.). When the market runs below the support level, the upward trend line, the neckline, etc., the established long position should immediately leave the market to avoid expanding losses; conversely, when the market runs above the resistance level, the downward trend line, the neckline, etc., the established short position should immediately leave the market.
Fourth: Resistance line stop loss method, when the market trend turns downward without passing the important pressure level, box top, dense trading area, upper rail, neckline and other positions, the established long position should be stopped loss and all out; conversely, when the market goes down, at important support levels, box bottoms and other positions, the established long position should be stopped loss and out.
Fifth: Pattern stop loss method, when encountering double top, triple top, head and shoulders top, dark cloud cover and other short patterns, the established long position should be stopped loss in time, and conversely, when encountering double bottom, three bottom and other long patterns below, the established short position should be stopped loss in time.
The art of capital control
The most troublesome thing in trading is risk control, such as setting stop profit and stop loss, controlling positions, and controlling mentality.
Here, I will focus on telling you about position control, how to reasonably control capital allocation, so as to maximize profits.