On technical indicators, I often use MACD. When the DIF line and DEA line cross below the zero axis and then break through it, that is a buy signal. If they cross above the zero axis and then go down, you should reduce your position. Don't easily try to average down. If you incur losses, do not average down; many people end up losing more as they average down and end up with nothing. Remember, losses should be cut, and profits can be added.
Trading volume is also crucial. When the coin price breaks out from a low position, if the trading volume increases, it could be a significant opportunity.
The key is to go with the trend and seize it. Combine daily and monthly charts for a comprehensive judgment; when a line turns upward, you know how to operate.
In short, trading coins carries both risks and opportunities. I hope my experience can help everyone, but I still want to remind you to invest cautiously!
The basic principles of Dow Theory, when applied to the crypto circle, can be summarized in the following six points:
First, average prices encompass and digest all factors. Fundamentals, policies, news, and funding can all influence supply and demand, and all of this is reflected in the market, which ultimately digests and absorbs these changes through price movements.
Second, the market has three trends. Dow classified trends into three categories: major trend, necessary trend, and short-term trend.
The major trend is like the tides of the ocean, belonging to a long-term trend, similar to the cyclical seasons in the crypto circle, with bull and bear cycles having no beginning or end.
Minor trends are the waves in the tide, representing pullbacks in major trends, usually retracing to 38%, 50%, and 62%, the three important Fibonacci levels. Short-term trends are ripples, referring to subtle fluctuations that have high uncertainty and change rapidly.
Third, the major trend can be divided into three stages. The first stage is the accumulation phase, similar to the yin giving rise to yang, indicating that the bear market is nearing its end. Although everyone is bearish, the prices have dropped as low as they can, and the main forces begin to accumulate gradually.
The second stage is the bullish attack phase, where favorable news starts to emerge, and most retail investors with some technical knowledge gradually enter the market, causing prices to rise step by step.
The third stage is the climax sprint, where major media begin to flood the market with good news, boldly predicting continued price increases. Retail investors actively buy, as no one wants to sell, all fearing to miss this once-in-a-lifetime opportunity to make money. However, in reality, the main forces that bought at the bottom have begun to sell off.
Fourth, various average prices must mutually verify each other. For example, if both Bitcoin and mainstream coins exceed the previous peak of the medium trend in their joint rise, it can be called the arrival of a large-scale bull market! Similarly, if both Bitcoin and mainstream coins drop below the neck line of the high-level oscillation phase in a bull market.
Fifth, trading volume must validate the trend. Dow believed that volume is the second most important factor in technical analysis; when prices are moving in line with the main trend, trading volume should also increase correspondingly.
Sixth, only after a clear and undeniable reversal signal occurs can we determine that a given trend has ended. A significant trend has inertia and will generally continue to move in the primary direction for a while longer, so it is important to wait until the trend confirms a reversal, for example, a head and shoulders pattern confirming a break below the neck line is considered a trend reversal.
Dow Theory is a macro technical analysis system, aimed at capturing the most significant segment of market movements in actual trading, which is the juiciest part in the belly of the fish.
Its advantage in determining the major bull and bear trends is relatively successful; however, its disadvantage is also quite apparent, with signals usually being delayed, generally missing out on 20%-25% of profit space.
Share trading insights:
1. Regularly invest in mainstream coins and leading coins. Regular investments have a higher probability of profit than going all in at once. If you go all in and the price drops afterward, it becomes harder to average down. Watching the low prices but not being able to stock up on coins is particularly uncomfortable; missing the opportunity to lower costs is regrettable. Even in a bull market, your returns will be significantly less.
2. Improve your ability to earn money outside the market.
In the market, the main thing is to buy coins and stock up. If you want to hold coins, you also need to enhance your ability to make money outside the market. Your ability to earn money depends on your job; if you have a lot of time at work, invest more in yourself, learn more, and acquire more skills. Following me to do Twitter KOL can turn traffic into cash.
3. Invest more in familiar fields.
Invest more in areas you are familiar with, as this allows for better risk control. If you invest in things you do not understand, you are likely to incur more losses. Investing in familiar areas increases cash flow; with cash flow, you can gain more returns and will not have to sell your valuable coins due to a price drop.
4. In-depth study of the skills of speculative trading.
Familiarize yourself with the development trajectory of historical hundredfold coins. You need to establish your own profitable trading strategy and continuously optimize your coin selection and timing in practice.
Tips for learning to trade coins:
1. Invest with spare money, avoid borrowing to trade coins - invest money + invest effort.
2. Rigorously screen valuable coins and develop a reasonable capital allocation plan based on reality - the Sunny Investment Strategy.
3. Average down - it is normal to have pullbacks after entering the market, so it is important to allocate funds reasonably and enter in batches.
4. Refuse to go all in, allocate positions reasonably; do not put all your eggs in one basket to effectively reduce risk.
5. Keep an eye on various news - pay attention to the latest updates in the crypto circle and financial news; knowing early helps you understand early and earn early.
6. Think contrarily; do not go against the market or the trend. Go with the flow and follow the trend.
7. Open contracts with less than full positions, leverage below 5 times, do not easily use 100x leverage; it is best to avoid leverage and not seek to get rich overnight, but rather pursue steady profits.
8. Control your income well - managing your position is more important than anything; if you are unsure, do not operate easily. Not operating means no risk and no loss; frequently check your assets to see if they are managed and if the management is reasonable.
9. The bottom is in your heart, the top is in your heart, do not fear, the crypto circle will only make you grow; mindset is more important than operation. Remember the coin trading mantra, there’s no worry about not making money!
Investment is not a competitive game, but a person's life cultivation.
In fact, there is another saying: every penny you earn is a realization of your understanding of the world.
Spend an evening sorting out 6 iron rules for trading coins; the content is not much, but it's filled with practical insights. If you plan to stay in the crypto circle for the next three years, these 6 iron rules will help you significantly!
Follow Su Ge closely, use precise strategies for analysis, and select with huge capital and AI big data to ensure you remain undefeated? The market never lacks opportunities; the question is whether you can seize them. By following experienced and right people, we can earn more!