－－The trading rules of the greatest traders, a useful and simple trading rule - 'Crocodile Principle'.

Your only chance of survival is to sacrifice one foot.

The Crocodile trading strategy is as follows:

1. Do your utmost to set aside idle money that you won’t need for a year;

2. Strictly select value coins and develop a good fund allocation plan;

3. Build positions in batches, no all-in! No all-in! No all-in!

4. Act according to the situation, reduce positions or even go flat during special market conditions;

5. Prevent missing out on long-term investments, make profits and average down for mid-term, seek small gains for short-term;

6. Must strictly follow the 'Crocodile 4321' trading strategy.

Crocodile 4321 trading strategy practical operation:

① 4: Leave at least 40% of total funds for averaging down on long-term coins, specifically through:

For each 10% drop in a certain long-term coin, average down by 10% of the total allocated funds for that coin (e.g., plan to invest 400,000 in BTC, initially buying 120,000, then averaging down 40,000 for each 10% drop).

② 3: Allocate 30% of total funds for long-term value coins, and under normal circumstances, only average down, not cut losses (e.g., plan total investment of 1 million, investing 400,000 in BTC, 300,000 in ETH, 300,000 in BNB, initially allocating 300,000, with 120,000 in BTC, 90,000 in ETH, and 90,000 in BNB);

③ 2: Allocate 20% of funds for mid- to long-term value coins, with a take profit and stop loss around 20%;

④ 1: Use 10% of funds for short-term trading, quick in and out, with a take profit and stop loss around 5%-10%.

Cryptocurrency trading is a complex, high-risk puzzle game. In this game, every piece of information can offer key methods, information, or capabilities to achieve profits. Among these pieces, trading volume is an essential yet often overlooked indicator that provides deeper insights into market dynamics. Today, we will introduce what trading volume is, discuss how to interpret this important trading indicator, and reveal the potential market sentiment it indicates.


In the field of cryptocurrency trading, 'trading volume' refers to the total number of tokens traded for a particular cryptocurrency within a certain period. This can be defined as trading volume over any time frame that suits your trading strategy, whether hourly, daily, weekly, or otherwise.

Trading volume is an important indicator of market activity and liquidity. High trading volume indicates strong trader participation and a large amount of capital in the market, making it relatively easier to enter or exit trades. Conversely, low trading volume may indicate insufficient interest among participants and potentially lower liquidity, making trading relatively more difficult.


Trading Volume and Market Efficiency

Market efficiency is an indicator that assesses the extent to which prices reflect available information and is the most important part of the Efficient Market Hypothesis (EMH). This hypothesis states that at any given time, asset prices fully reflect all available information. The impact of trading volume on market efficiency is substantial. High trading volume can facilitate a more efficient market in various ways.

Firstly, market efficiency reflects a greater number of trades, which means more information contributes to asset prices. This is because each transaction is a trader's actual action based on information they believe is related to asset value.

Furthermore, high trading volume means high liquidity. In a liquid market, fast buying or selling of assets occurs without significantly affecting prices, leading to more effective price discovery. However, it is worth noting that high trading volume does not always equate to market efficiency. Even if trading volume is high, factors such as market manipulation, information asymmetry, and market sentiment can still distort prices.

Relative Trading Volume

Relative Trading Volume, commonly abbreviated as RVOL, is a trading volume indicator used by traders to compare current trading volume with the average trading volume over a specific period. It measures trading activity on a specific date or time relative to average trading activity. Relative Trading Volume is a ratio. For example, if RVOL equals 2, it means the current trading volume is twice the average trading volume at the same time of day, indicating unusually high trading activity. It can provide useful insights into market dynamics and investor sentiment.

High RVOL values may indicate significant market events, such as earnings announcements that could impact asset prices, product launches, or news releases. Conversely, low RVOL values may suggest a calmer market with fewer active traders.

Combining relative trading volume with other volume indicators can help traders better understand market dynamics, predict potential price trends, and make more informed trading decisions.

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