I have always felt that the dumbest way to trade cryptocurrencies is often the most effective.
But this path is too slow and tedious; the vast majority of people cannot persevere. Because they always escape this three major 'common diseases':
⚠️ First, chasing highs and selling lows. When you see a coin rise, you rush in, fantasizing it will continue to soar, only to buy at a high point and panic when it drops, missing the rebound. Those who can adapt to buying during declines and selling during peaks are the ones who truly reap the cyclical rewards.
⚠️ Secondly, heavy betting on direction. The direction may be right, but the main force washes out positions after a few shakes, it's not a wrong judgment, but rather a failure to endure.
⚠️ Thirdly, emotional full positions. Getting overly excited and going all in loses flexibility in adjusting positions. Even if you predict correctly, you can't move funds, and when opportunities arise, you can only feel anxious.
Ultimately, in the cryptocurrency space, what you lose is not the market, but your habits.
I have summarized a set of short-term 'six-character formula', the reasoning is simple, yet often overlooked:
1⃣️ High-level consolidation is not over; new highs are often still ahead; low-level fluctuations are hard to stop, and it's easy to test the bottom again. Do not act until the market has changed.
2⃣️ Do not act during sideways movement; most people fail in fluctuations.
3⃣️ Buy when the daily line closes lower, sell when it closes higher. Following the market sentiment is better than subjective judgment.
4⃣️ Slow declines are hard to bounce back from, while sharp declines can easily reverse. Understanding the rhythm is key to seizing opportunities.
5⃣️ Build positions in a pyramid style, enter the market in batches, and always leave some bullets.
6⃣️ After great rises and falls, there will definitely be fluctuations; after fluctuations, there will definitely be a change in the market. Do not bet at extreme positions; wait for signals to act.
The market is not short of opportunities; what is lacking are those who can endure, wait, and survive. You may think that experts rely on luck, but in fact, they have taken the 'foolish methods' to the extreme.
In the cryptocurrency space, using candlestick charts to determine entry timing is an important technical analysis method. Here are some methods based on candlestick charts to judge entry timing:
1. Identify trends
• Uptrend: If multiple bullish candles (green) appear consecutively in the candlestick chart, and each candle's closing price is higher than the previous candle's closing price, it indicates that the market is in an uptrend.
• Downtrend: If multiple bearish candles (red) appear consecutively, and each candle's closing price is lower than the previous candle's closing price, it indicates that the market is in a downtrend.
• Trend reversal signals: Certain specific candlestick patterns such as hammer, inverted hammer, morning star, engulfing pattern, etc., usually appear at trend reversals and can serve as signals for entry.
2. Pay attention to support and resistance levels
• Support level: When the price drops to a certain range and repeatedly stops falling and rebounds, that range is the support level. If the price approaches the support level and a bullish candlestick pattern (such as a hammer) appears, one can consider entering the market to go long.
• Resistance level: When the price rises to a certain range and repeatedly stops rising and falls back, that range is the resistance level. If the price approaches the resistance level and a bearish candlestick pattern (such as a hanging man) appears, one can consider entering the market to go short.
3. Volume-price coordination
• Volume-price coordination in an uptrend: If the price rises accompanied by increasing trading volume, it indicates strong buying power in the market, and one can consider entering the market to go long.
• Volume-price coordination in a downtrend: If the price drops while the trading volume increases, it indicates strong selling power in the market; one can consider entering the market to go short.
4. Special candlestick patterns
• Hammer: Appears at the bottom of a downtrend, with a long lower shadow, at least twice the body length, indicating that the market may reverse upwards, signaling an entry to go long.
• Inverted hammer: The pattern resembles a hammer, but the shadow is on top, indicating that the market may reverse upwards, suitable for going long.
• Three white soldiers: Composed of three consecutive bullish candles, each closing price is higher than the previous candle's highest price, indicating strong market bullishness, suitable for going long.
• Bullish engulfing: A longer bearish candle is followed by a shorter bullish candle, and the bullish candle is completely within the body of the bearish candle, indicating that the downtrend may be ending, suitable for going long.
5. Combine technical indicators
• Moving average crossover: When a short-term moving average (such as the 5-day MA) crosses above a long-term moving average (such as the 10-day MA), a golden cross is formed, indicating that the market may enter an uptrend, signaling an entry to go long.
• MACD indicator: When the short-term MACD line crosses above the long-term MACD line, a golden cross is formed, indicating that the market's bullish trend is strengthening, suitable for entering the market to go long.
6. Risk management
• Set stop-loss: When entering the market, it is recommended to set a stop-loss point to control risks. The stop-loss point can be set outside key support or resistance levels.
Years in the cryptocurrency space have allowed me to accumulate about a million in profits, with a principal of 80,000; I have traded cryptocurrencies full-time for 10 years. During this time, I have experienced many ups and downs, but I have truly made big money by seizing two bull market opportunities. Here, I share some of my experiences and lessons:
1. Control the risk of each trade within 10% of the principal; it is not advisable for beginners to take risks, and it is best to control the risk within 2%-5%.
2. Once you enter the market, do not close positions due to short-term fluctuations or impatience; the market needs time to prove itself, and you must have patience.
3. Execute according to the plan in trading to avoid overtrading; otherwise, it is easy to make mistakes.
4. After making a profit, gradually adjust your take-profit and stop-loss points, boldly follow market trends, and strive for maximum gains.
5. Never cancel your stop-loss point, as this can effectively control risks.
6. It is not advisable to increase positions when the market is going well; greed often leads to significant risks.
7. Switching positions from long to short requires extremely high technical skill; not everyone is suitable for casually changing positions.
8. Even when trading feels smooth, do not easily increase your position; excessive confidence can easily lead to major mistakes. The insights above are experiences I have summarized from years of struggles in the cryptocurrency space, and I hope they help you.
Many people compare cryptocurrency trading to gambling, believing that once they get involved, it’s hard to quit, not knowing that these people have held a deeply rooted gambler's mentality from the start. Cryptocurrency investment is not gambling, just as exploration is not the same as taking risks.
It is precisely because of this high risk that you cannot focus solely on getting rich overnight; such low-probability events will only disturb your mindset. Strictness, caution, and discipline are the qualities you need to possess.
Treat cryptocurrency investment as a job, regulate your trading with the discipline of a daily commute, discard the gambler's greed, and adopt a devotee's piety. Only then can you walk the long and far path of cryptocurrency investment!
Having traversed the market for many years, I deeply understand the opportunities and pitfalls. If your investment is not going well, and you feel reluctant about your losses, leave a 999 in the comments! I will share my insights.
