The core of trading #币圈 consists of only three points: trend, position, and entry model. In fact, after trading for so long, trading is nothing more than revolving around these three core points:
1. Observe the trend
2. Observe the position
3. Find entry models to enter
Understanding these three steps will make your trading mindset simple and clear, no longer swayed by market emotions.
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Step One: Observe the Trend
The major trend determines the direction, while the minor trend finds opportunities.
I focus on the structure of high and low points; continuously rising highs = bullish, and consistently falling lows = bearish. However, in my trading system, the prerequisite is that at least a 0.382 retracement must be satisfied to consider it a turning point.
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Step Two: Observe the Position
Key support and resistance levels are the first choice for entry. For example:
Fibonacci retracement levels (like 0.382, 0.618)
Enter when the price retraces to key levels, rather than chasing at market highs. I usually wait for the current wave to retrace to 0.382 to see if there is a reversal in the small time frame to find an opportunity to trade.
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Step Three: Find Entry Models
My commonly used entry model: the red arrow indicates a downtrend; when the downtrend turns to an uptrend, I start looking for a favorable risk-reward ratio to enter. I usually wait for the M15/M30 structure to change before considering a trade, entering only when there is a suitable risk-reward ratio, at least 2:1. If the risk-reward ratio is poor, I abandon this trading opportunity. Target levels are the previous highs and lows; if broken, I must reduce my position.
Trading is not a complex technical game, but a simple process.
Remind myself of this.
