Let me talk about myself. First, let me introduce myself. I was born in 1990, from Changsha, Hunan. I entered the cryptocurrency market in 2013, and started really playing in 2016. In 2017, I hit the big bull market and made my first 10 million right from the start. After that, I got carried away, lost all the money I earned, and also lost over 3 million of my parents' hard-earned savings. I even borrowed 500,000 from relatives and friends to trade, and lost it all in the market. In total, I lost over 8 million. My family was almost on the verge of collapse, and my beloved wife argued with me every day about this, threatening divorce. Under such immense pressure, I even thought about jumping off a building. Fortunately, at that time, my willpower remained strong, and I believed I could earn it back!
Let me share a truth: don't be jealous. Anyone who gains great wealth in the cryptocurrency market and holds onto it has not done so by chance; don't be unconvinced.
I won't mention the many pitfalls of ancient times; that was definitely more thrilling than now. Just talking about now, those who made a lot of money and held onto it, their actions regarding their large positions must have perfectly avoided all the following matters:
If you want to truly realize financial freedom in the cryptocurrency market, leapfrogging classes and achieving compound interest, methods, techniques, and forming your own profit system are crucial!
- Once you master it, the market will be like your 'ATM'; making money will be as easy as breathing!
After more than 10 years of trading cryptocurrencies, my wealth journey is summarized as follows:
The first million took the longest and was the most painful; the trading system kept being reshaped and polished, taking a year and a half.
The second million took three months.
The third million only took 40 days.
The fourth one made a million in just five days, with 75% of the funds earned in half a year.
First, the answer: there is an opportunity, but you can only do contracts, and a bit of luck is still needed.
In the cryptocurrency market, 3000 yuan is about 440u!
Recommended optimal strategy: contracts.
Each time using 100u, betting on trending coins, ensuring take profit and stop loss.
100 to 200, 200 to 400, 400 to 800.
Remember at most three times! Because the cryptocurrency market requires a bit of luck; each time you gamble like this, it’s easy to win nine times and lose once!
If you pass the three thresholds of 100, then the principal will reach 1100u!
At this time, it is recommended to use a three-fold strategy.
Trade two types of orders in one day: ultra-short orders and strategy orders. If the opportunity arises, then enter trend orders.
Ultra-short trades are used for quick strikes, trading at the 15-minute level.
Advantages: High returns.
Disadvantages: high risk.
Only trade at the Bitcoin aunt level.
The second type of trade, the strategy trade, is to use small positions.
For example, using 10x leverage to do 4-hour level contracts.
Using profits to save up and regularly investing in Bitcoin every week.
The third type is trend trades.
Medium to long-term trading, once you see it clearly, just go for it.
Advantages: Eat more meat.
Find the right point.
Set a relatively high cost-benefit ratio for your profit and loss.
Ultimately, the difficulty in making money is not the method, but the execution.
A trading system is a weapon that can help you achieve stable profits.
It can help you mark key levels, discover entry signals, and find trading opportunities that can make you money.
So to put it another way, as long as there is a stable trading system, when opportunities arise within the system, just act; if you lose, it’s okay to take revenge. Just do what you should do, leave the rest to the market; after all, in the end, you can always cover losses with profits.
However, 99% of people’s biggest problem is that they do not have their own trading system, so they fear losing money when trading because the lost money cannot be regained. Even if they regain it by luck, they will eventually lose it all by skill.
So how to have a trading system?
An excellent sniper must start developing a comprehensive plan from the moment they receive a task.
For example, how to select sniper positions, understand the habits and behaviors of target tasks, what equipment you need, your entry route, your escape route, what camouflage to use, and how to patiently wait for the target to enter your shooting range.
Thus achieving precise hunting! The same applies to a good trader; the most important thing is to find your sniper position, which is how to accurately find the main support and resistance levels.
This article collects my years of trading experience. Although it is lengthy, it is of great value. I strongly recommend friends who want to seriously learn the techniques to read it carefully; you will feel like you have found a treasure.
1. Identify the five secrets of key levels.
So how can we correctly identify the key level in candlestick charts?
Remember the following five conditions.
The more times it touches, the better.
Has had a strong reaction.
Very clear and easily visible.
Has been rejected multiple times.
At the same time, it has acted as both support and resistance.
The above five conditions.
It does not need to meet all conditions to be considered a key level.
But the more conditions met,
Represents that position is more powerful and effective.
Next.
I will break down the above five points step by step.
The more touches, the better.
Proving whether a certain price is a key level.
There is a very simple method.
It is the number of times the market has touched.
In our daily lives.
When you discover a situation that keeps occurring.
The first two times you might think it's just a coincidence.
But when this happens for the third or fourth time.
Do you think this is quite suspicious?
It seems that this matter has some purpose and reason for happening.
The same position.
At different times.
The price has failed to break through this level several times.
Have encountered resistance or support at this position.
We will doubt one thing.
This position is crucial for the market.
Is there a special meaning for its existence?
Is this position a key level?
Is it this year’s highs and lows?
In summary,
A position that has reacted once or twice.
It may really just be a coincidence.
But when this starts to happen frequently.
The probability of it being a key level will be much higher.
Has had a strong reaction.
We know that history always repeats itself.
If the price passes a certain position.
If there is no strong response.
Then how can we have a reasonable expectation?
Expecting the price to make significant reactions at the same position again in the future?
The market is actually like humans.
All have memories.
But usually we only remember some deeply impressionable things.
For example,
I will remember that day when BTC fell by 5000 points.
But,
I won't remember that day when ETH rose by 50 points.
Everything is based on a concept.
That is reasonable expectations.
When the market returns to a position that has previously experienced a significant rise or drop.
We will have a reasonable suspicion that the price will repeat its history.
Make a significant reaction at the same position again.
And that major reaction is our profit space.
And within this position.
In fact, many orders deployed by investment institutions have long been ambushed.
When the price returns to this key level again.
There will be opportunities to trigger their orders.
As retail investors.
If at this position the views of institutional investors are temporarily aligned.
The price will quickly move in the direction you desire.
Stay away from your stop loss.
Moving towards your profit target.
As the saying goes.
“Follow the big players, there’s a bull market every day.”
This is also what I have learned from my years in the financial industry.
One of the trader's mindsets I have learned.
Very clear and easily visible—a good key level.
One condition is that it must be very clear, very obvious, and easily visible at a glance.
Suppose one day.
When you open a chart.
You find a position that seems to be a key level.
It seems like it is not?
You see the price trying to encounter resistance there.
Or support.
The price seems to have reacted.
But if it does not react too much.
I advise you to give up this position immediately!
Immediately!
Immediately!
Because even if you barely find a reason.
Treat this as a key level.
In fact, your confidence in this position has been unconsciously influenced.
Why?
Because when a real trading signal appears.
You will definitely have hesitation.
Greatly affects your trading decisions.
Even if you really entered the market.
As long as the price line moves slightly in the opposite direction.
You will be very afraid.
Even if there is a strong WeChat account.
Prompted you to make this trade.
You may very well doubt this position.
But prematurely gave up the real key level.
Causing you to exit early.
Then you have given up your original trading plan.
This trade will end in failure.
Then you will not be able to achieve consistency with this major principle.
This market is never short of trading opportunities.
There are over 200 currency pairs in the cryptocurrency market for you to trade.
There are also different forex, futures, and securities products.
I’m never afraid of missing entry opportunities.
The most feared is not following your own trading plan.
Entering reluctantly due to lack of confidence.
Speaking of which,
It also involves trading psychology.
I will also compile and write some articles on trading psychology in the future.
I will explain in detail to everyone when the time comes.
Has been rejected multiple times.
When we pursue a girl,
The most painful thing is not being rejected by the object of your affection.
But instead, being rejected fiercely by the object of your affection.
Finding key levels is the same logic.
We need to find the pain points of the market.
We hope to see a certain position.
Has encountered multiple times at different times.
Or continuously encountering a situation of rejection.
This reaction repeats every time.
Our entry opportunities increase by one.
Simply put.
You will see candlesticks generate near this position.
Lines or several long upper or lower wicks.
Price will always move in the opposite direction after being rejected.
Indicating that the price has expressed its intentions many times to the market.
Has risen or fallen multiple times.
But has been rejected by the market.
Immediately pulled back by the opposing force.
This situation.
Indicates that there is strong power guarding this position.
Whenever this situation occurs.
Especially when the daily price successfully breaks through this area.
We will all regard this as a strong and effective key level.
At the same time, it has acted as both support and resistance.
In the world of trading.
There are no eternal friends.
There are no permanent enemies.
What we hope to see is a situation.
Yesterday's support level becomes today's resistance level.
Or yesterday's resistance level becomes today's support level.
Whenever the price breaks through previous resistance.
Many times it will return to the same position for a rebound.
And at this time if the price is rejected.
This represents that yesterday's resistance turned into today's support.
This situation also signifies that this position holds considerable status in the market.
Both black and white markets will give him face.
Both sides have once held this position.
Every time we see a certain position.
At the same time, having acted as both support and resistance.
We can judge it to be a key level.
The probability is generally right.
After explaining the five conditions for key levels.
Next, I will explain five applications.
Common mistakes many crypto friends will make.
And some practical tips for everyone.
2. Five incorrect demonstrations of finding key levels and how to avoid them.
Five incorrect demonstrations of finding key levels and how to avoid them.
Too many lines.
Reckless entry.
It is an area, not a line.
The range is too large.
Long-term charts are more accurate.
Too many lines.
In the application of finding key levels.
The first common mistake.
It is to draw a line for every so-called support or resistance level seen in all charts.
The more lines you draw,
Does not mean that your trading opportunities will increase.
Does not mean that the money earned will increase.
Because many of the lines you draw are just market noise.
Based on the five conditions mentioned earlier.
Here, many are not qualifying key levels.
If you make the chart like this.
In the end, it will only leave us dazzled.
Affecting our trading decisions.
Everyone should know one principle.
The basic point of viewing charts is to keep them simple and clear.
Ensure we can clearly see price action.
What we mainly want to see is the price's reaction.
If too many things obscure the candlesticks.
Distracting or causing hesitation.
Absolutely a reversal of priorities.
So we just need to focus on the most obvious and important.
And the nearest main support and resistance levels will be fine.
Reckless entry.
The second point is reckless entry.
We used a practical example.
When we find a key level (as shown in the figure).
We see that the last price reacted significantly downward when it touched this position.
Thus the price returns here again.
Never think that the price will go down again.
Enter immediately to short.
Doing this can greatly increase your chances of suffering a painful lesson.
We mentioned earlier.
There are no eternal enemies in the world.
Moreover, there are no eternal friends.
Yesterday's resistance level can absolutely become today's support level.
The key level is actually a balance point of the market.
Both sides want to break through or hold this level.
So both sides' forces usually clash at this position.
What we need to do is wait for the outcome of the market battle.
Observe the price's reaction to this position.
Deciding whether to enter based on the traces left by both sides’ clashes.
Why enter? When to enter? When to exit? A series of trading plans.
Simply put,
The best practice is to wait for a trading signal as confirmation.
You just enter.
And this signal can be technical indicators.
Can be chart patterns.
Can be candlestick patterns.
It can even be fundamental analysis.
There are thousands of different combinations that can serve as trading signals.
Due to limited space.
It's impossible for me to cover everything in this article.
So this matter will not be explained in detail here today.
I will only summarize two or three trading signals in the last part of this article.
For the future.
I will target different entry signals.
Write more detailed articles respectively.
Friends who are interested, remember to follow me.
Don't miss it.
It is an area, not a line.
We continue to explain the third incorrect usage.
This is the real key level.
It should be an area, not a line.
Although the market will continuously repeat its history.
But the process will never repeat 100% identically each time.
Moreover,
The cryptocurrency market.
Since its inception.
Less than 10 years.
The market cycle is like the circle drawn in the above diagram.
Every circle will have some differences.
It's hard to draw a perfectly identical circle.
It's not because I intentionally draw it that way.
But the market is filled with too many uncertainties.
Although the results are similar.
But there is a very small probability of completely replicating the previous process.
Taking this as an example.
The price shows a signal of rebound when it reaches this position for the second time.
When it returns here for the third time.
Based on your analysis.
You decide to enter.
Place the stop loss at the height of the previous backtest.
But today the price decides to probe lower.
Directly hit your stop loss.
If you draw this key level as an area.
This way, your stop loss will change to here.
Then your trade this time will be successful.
And bring you substantial profits; the difference between a successful and failed trade.
It's just a subtle area.
Draw the key level as an area.
Can help us avoid many failed trades.
At the same time, it can allow the price to hit our profit target.
This is the direction we want.
The chances of unexpected exits are greatly reduced.
I believe those who see this.
Friends who play contracts should feel this deeply.
The big market has clearly not changed.
Still developing according to your expected trend.
This is because of that annoying needle.
Liquidated.
The range is too large.
Sometimes we discover.
The drawn key level area is very large.
This situation.
Especially in larger ranges, the opportunities are greater.
As shown in the figure.
A trading signal appears within the candlestick.
Normally, if a signal appears at this position.
There are already enough reasons to enter and trade.
But because the range we drew here is too large.
It can make us hesitate.
Is this candlestick pattern effective?
A too large area will make us feel confused.
Even if there is a clear signal.
But there will be some unnecessary troubles.
Making us indecisive and missing opportunities.
When this situation arises.
We can try to connect as many points of the body line itself as possible.
Try to narrow this area down to a reasonable range.
Also ensuring at least three touches.
This will make the entire event much clearer.
Long-term charts are more accurate.
Long-term charts are more accurate.
You may have heard of it.
The larger the time frame, the more accurate it is.
In fact, the logic in this is quite clear.
If a matter spends more time brewing, planning, and preparing.
Its success rate will definitely be higher than in a very short time.
Spontaneous events will occur much more frequently.
When we look for key levels, it is the same.
Always start with larger time frames.
Here.
I will share a tip I have learned over the years.
This was also taught to me by a famous institutional trader.
From the weekly chart.
To the daily chart.
Then go to the 4-hour chart.
1-hour chart.
Layer by layer descending.
Analyze every currency pair.
Always start with larger time frames.
Formulate the trading plan for the next week.
When you understand the broader trend of the market.
Your opportunity to stand on the right side.
Will naturally increase.
If you belong to someone with little trading experience.
I suggest you start with larger time frames.
For example, when the daily or even weekly chart starts.
First, establish confidence in your trading.
Then slowly attempt to move to smaller time frames.
Take you to practically find the main support and resistance levels.
Finally finished explaining these five defining key level conditions and the five application errors and secrets.
You might think some of the things I just mentioned are subjective.
It is difficult to have a clear, quantifiable condition to define.
For example,
What is considered a strong reaction?
How many rejections are considered multiple? When is it called effective?
If you also have this doubt.
Congratulations! Your comprehension ability is amazing!
You may have already started absorbing and digesting this concept.
This is also why I classify this course as advanced technical analysis.
Indeed.
The concept of key levels is very subjective.
Including all technical analyses of price action.
Showing the same chart to different people.
The results may not be the same.
So the only way is to do backtesting yourself.
Practice more, observe charts more.
Action speaks louder than words.
Next,
Let me take you to see a few examples.
Immediately practice what you just learned.
OK!
Before looking at chart examples.
I first want to teach everyone how to draw a key level.
Step 1.
We use a line to draw the places where the most candlesticks touch.
And this line will follow one principle: the body is more important than the wick.
Why?
Because we need to focus on the price at the end of the candlestick.
That is the result.
And the wick means that previously.
Not the result.
Step 2.
Draw another line above and below the previous line.
The goal of these two lines is to touch the candlesticks as many times as possible.
Whether it is the body or not.
Whether it is the wick or the body.
Step 3.
Delete the middle line.
This way, you will derive a preliminary key level area.
If this area is too large.
You can follow the tips I just mentioned.
Adjust downwards based on the principle of connecting the most touch points.
Remember a principle.
The body is more important than the wick!
If there is a conflict between the body and the wick.
We will choose to sacrifice the wicks!
Next.
We officially start to look at some chart examples.
The first candlestick chart.
Can you guess where the key level is?
How many conditions does it simultaneously meet?
That's right!
This is it!
First, draw a line.
Try to let it touch more bodies.
Then above and below it.
Each draw one more line.
Form a draft.
Finally,
Let's make a slight adjustment.
This area is the key level.
Do you see this position crossing the line?
For us,
This is actually acceptable.
Because the market is usually not perfect.
There is a very small probability that it will be like those drawn in some books.
Has an identical pattern occurring.
As long as the flaw is not too large.
It will not affect its qualification as a key level.
Finally,
Let's see how many conditions this key level meets.
Very obvious.
This position meets three conditions.
Step 1.
It must have at least three touches.
Step 2.
We have all seen that the price has reacted strongly before.
Step 3.
It has acted as both support and resistance.
Alright, let's take advantage while it's hot.
Next, let's take a look at the second candlestick chart.
Let's try to find the key levels together.
Still the same drawing method.
Step 1.
Draw a line.
Try to connect to all the bodies.
Step 2.
Draw another line above and below it.
This way we find a preliminary key level.
Step 3.
Let's make a slight adjustment.
This key level meets four conditions.
First, it has more than three touches.
This second position is very obvious and can be seen at a glance.
The third one has had more than one strong reaction.
Step 4: We analyze through candlestick patterns.
Seeing that the price has been rejected multiple times.
Good.
Things don't happen more than three times!
Let's do the last set of exercises.
This chart seems a bit difficult.
If you see the price starting to stay in the lower half of this area.
It’s just that there is a bearish force saving strength.
Of course.
Today's breakout may fail.
Be careful of false breakouts!
Here’s a bit of advice for those who want to recover losses or make money through contracts:
Many people stay in the cryptocurrency market to recover losses, but the harsh reality is that most people cannot recover losses or make money, especially those who think they can recover losses through contracts are deluding themselves. Those who make money through contracts in the market are very rare, and it’s unrealistic to think you are that person. Honestly, if you want to recover losses through contracts, you aren’t cut out for it. No matter how much you lose, it won’t change. Even if you go bankrupt, you cannot recover losses through contracts. Therefore, I advise those who want to recover losses through contracts to quit contracts; in other words, quit gambling.
What should spot players do when losing money?
First, if you haven't lost much and have a relatively large principal, which means that the principal and loss are balanced, then recovery is relatively simple and easy, or in other words, those that need to be multiplied by five times or less to recover are possible, but the most important point is the entry point.
And selling points, if you are stuck at a high position, it becomes difficult. Most people can make money when the bull market starts, or during the main upward wave of the bull market, but lose money due to not understanding how to exit. After exiting, during the main distribution (exit) phase, repeatedly entering at high points leads to being harvested. Therefore, for retail investors, what position to sell is actually very important, but selling is not the most important thing.
Most importantly, after selling, being able to remain in cash and wait is something most cannot do—95% of retail players cannot do this. This is the root of most people's losses. If you can sell at a relatively high point, and not be influenced by analysts in the market or various positive news at high levels, and stick to being in cash, then that is truly realizing your profits.
Summarizing the losers.
1. Five times or less is good for recovery.
2. You need to know how to sell.
3. Know how to stay in cash.
Of course, it is the same for spot players. Less than 5% of retail investors make money because the trading market is a war against human nature—greed, fear, arrogance; those who can overcome these are few and far between.
So who are the ones who make money through trading?
Those who truly make money often learn just one trading method, can read the fundamentals, and when the market is at the bottom or consolidating, they buy in and hold. When it rises enough, they sell without focusing too much on the news; they do not blindly buy the coins they want, but when the bull market comes, all coins will rise.
In fact, especially many novices find it easier to make money playing spot.
In the cryptocurrency world, let’s first talk about two simple ways to make money:
The first type:
Making money through trading is actually so simple; just follow these three steps! Master them skillfully, and easily make your account grow tenfold!
Step 1: First look at the trend.
Step 2: Find key levels again.
Step 3: Find entry signals.
Entry, profit, closing, leaving.
Isn't it simple?
Let me explain in more detail below.
Step 1: First look at the trend.
A state of the market.
The big market has three possible outcomes: rising, sideways, falling.
What is a significant market movement? Look at time frames above 4 hours.
For example, 4 hours, daily, weekly (my personal habit is to look at 4 hours).
Buy when the price rises, sell when it falls, do not trade when it is sideways.
Step 2: Find key levels.
Whether the market is rising or falling, it will jump like a bouncing ball, level by level from bottom to top or top to bottom.
What we need to do is enter at the jump-off point and exit at the next drop point. How to find precise steps becomes key.
This is what we call key levels (main support and resistance levels).
(How to accurately find the main support and resistance levels can be seen in my previous articles.)
Step 3: Find signals.
Generally, if you find a market trend in the long term, you should look for trading signals in the short term.
Everyone has different strengths in trading methods; mastering one or two is enough.
More importantly, quickly formulate a trading strategy.
A complete trading strategy includes.
(1) Target - What to trade;
(2) Position - How much you hold.
(3) Direction - Long or short;
(4) Entry point - At what point to trade;
(5) Stop loss - When to exit losing trades.
(6) Take profit - When to exit profitable trades.
(7) Countermeasures - How to deal with emergencies.
(8) Afterhand - Operations after the trade ends.
The famous TLS technical analysis method: trend + key positions + signals = successful trades.
Always follow the process to formulate a strategy before making a trade; I believe you won’t lose too badly.
Form good habits, and over time you will discover the shortcomings in your trading process and strive to change them; that is success!
Finally, let’s say some heart-wrenching things.
And the market has no guaranteed profit secrets, only probability games. The principle of confirming pullbacks is to use rules to counteract human nature—calm when others panic, restrained when others are excited.
Playing in the cryptocurrency market is essentially a confrontation between retail investors and large players. If you lack cutting-edge news and firsthand information, you can only be cut! If you want to lay out plans together and harvest with the institution, feel free to contact me! 【Public Account: Cryptocurrency Community】 Welcome like-minded cryptocurrency enthusiasts to discuss~
There is a saying I strongly agree with: the boundary of knowledge determines the boundary of wealth; one can only earn wealth within their knowledge boundary.
The mindset for trading cryptocurrencies must be good. Don't let your blood pressure rise during big drops, and don’t become complacent during big rises; securing profits is crucial.
Continuing to fight alone and relying on luck to make money will ultimately lead to losing by skill, drowning in the market tide!
The market never lacks opportunities, the question is whether you can seize them. Following the right people is essential for long-term survival in the market and to earn more!
Want to double your account, want to make big profits, want to successfully recover losses.
Stay close to Sister Xin and seize the main upward wave of the bull market in advance!
