I have been trading cryptocurrencies for over ten years, from liquidating and losing 1 million to achieving financial freedom today! Mainly, I was fortunate to meet an elder who started with 10,000 and grew to over 100 million, who once told me what it feels like to grasp the essence of trading, and now I also understand that feeling.
The greatest benefactor in life is not finding money or winning the lottery, but meeting someone who breaks your existing thinking, elevates your perspective, and can lead you to a better stage. Life is similar; cognition determines wealth, and underlying logic determines the superstructure!
Before enlightenment, it is as difficult as climbing to the sky; after enlightenment, it is as easy as turning your hand.
Many stock market experts find trading cryptocurrencies simple after enlightenment, while many retail investors believe that experts making money in cryptocurrencies have done so through countless time spent learning and countless losses.
I share my personal experience
How to grow 40,000 in capital to 40 million in less than 2 years through compounding:
The first ten million took the longest time and was the most painful; the trading system underwent constant reshaping and polishing, taking a year and a half.
The second ten million took three months.
The third ten million took only 40 days
The fourth ten million took only 5 days, with 75% of the funds earned in the last six months.
I have been in the cryptocurrency world for over 10 years, and these eight iron rules are a must-read before entering the market every day, helping me avoid disaster during rounds of significant declines.
Today, I share this with like-minded friends, hoping to inspire you.
1. When entering the market, do not only look at the cryptocurrency K-line" trend, especially for short-term trading, it is necessary to look at the 30-minute K-line, and at this moment the overall market must stabilize and resonate before entering. For example, sometimes when you see a K-line with a long upper shadow, you feel there is no opportunity, but the next day it shows a big upward trend or even hits the limit. If you look at the 30-minute K-line, you will see the subtlety.
2. If the trend and order are not right, looking one more time is a mistake. You must go with the trend, and the order of the upward movement cannot be disrupted.
3. Short-term trades not in hot spots or potential hot spots are better left undone.
4. Give up all impulsive entries. Trade your plan, plan your trades.
5. Any person's opinions or views are merely references; you must have your own thoughtful consideration and careful analysis.
6. First lock in the direction and then select the coins carefully. If the direction is right, the effort will pay off; if the direction is wrong, the effort will be in vain.
7. Get involved with coins that are on the rise. Guessing the bottom is a major taboo; it always feels like a rebound is imminent, only to face an ultimate shakeout. Coin prices always move towards small resistance points; getting involved with coins that are on the rise means choosing a direction with less resistance.
8. After a big profit or loss, take a break, re-evaluate the market and yourself. Clarify the reasons for the big profit or loss before taking action again. Over years of trading cryptocurrencies, I have found that after a big profit or loss, taking a break has a success rate of over 90%.
Ultimately, the difficulty in making money is not the method but the execution.
A trading system is a weapon that enables you to achieve stable profits. It can help you identify key points, discover entry signals, and find trading opportunities that allow you to profit.
So, the point is, as long as there is a stable trading system, just act on the opportunities that arise within the system; if you lose, it’s okay to take revenge; do what you need to do, and leave the rest to the market. After all, in the end, you will always be able to 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 that money, if lost, cannot be regained. Even if they regain it by luck, they will eventually lose it by skill.
Here, I bring you pure dry goods: stepping onto the path of profitability: revealing the 8 key steps for traders to achieve profitability (suitable for both novices and veterans). Becoming a successful trader requires certain steps and skills.
For example, choosing a market that suits your trading style and schedule, developing or selecting a high-win-rate trading strategy or system, and having good risk management skills, etc. Over the past few years, we have seen too many traders come and go and have noticed similarities among those successful traders.
This is why we have compiled the eight steps that traders must go through to improve their trading and hope they can start making money in the market.
1. Choose your market First, you need to choose the market you want to trade in, such as currencies (forex), stocks, or futures. Each market has its advantages and disadvantages; there is no saying that one market is better than another, only that a market is more suitable for oneself. When choosing a market, consider personal preference and whether trading a specific market fits your lifestyle.
If you are very busy with work and cannot check charts and trades during the day, then trading in the domestic stock market may not be a choice, as the stock market usually opens from 9:30 AM to 5:00 PM. The forex and futures markets are open throughout the week (with some exceptions), which may provide greater flexibility.
For example, traders can trade international currency pairs or commodity futures after work in the evenings. Alternatively, traders can choose long-term trading methods, without needing to track charts during the day; checking trades once a day might be sufficient. Choosing the right market is crucial for how effectively you can monitor and manage the market and trades.
2. Find a trading strategy Now, you need a trading strategy. While there are thousands of trading strategies available online, how do you find the right one? In the initial 9 to 18 months, you need to try different types of strategies to understand various trading timings, management, and exit methods. It is recommended to try a new trading strategy every 3 to 4 months. This will provide you with enough time to gain a deep understanding of each trading strategy.
After testing 3 to 6 different trading strategies, you should have a good understanding of which strategy suits you best. At this stage, the important thing is not to find a trading strategy that can make the most profit, but to understand what type of trader you are and which analysis and trading methods fit your way of thinking.
Ensure that your trading strategy is "complete", including the following rules:
◎ Entry rules ◎ Stop-loss and profit-taking rules ◎ Exit rules ◎ Trade management ◎ Risk management
One common mistake many new traders make is focusing too much on trade timing and entry selection while neglecting other important aspects of trading strategy. As a result, once they enter trades, they lack rules for managing trades and responding to price changes. Inevitably, traders will lose money and attribute their failures to incorrect entry rules, unaware that there are other significant aspects of a trading strategy.
3. Do not always remain on the learning curve. There comes a moment when you need to choose a trading strategy and stop endlessly trying new strategies. It is important to realize that you will not "find a money-making trading strategy right from the start"; rather, it requires a process to make the trading strategy effective and adapt to your trading tools.
Additionally, you must become a trader who can effectively execute trading strategies without emotional interference. Initially, you may find that even with a complete trading strategy and reliable rules, you cannot execute trades in the best way. This is completely normal! Becoming a successful trader takes a process. At this stage, you may be tempted to abandon your trading strategy after experiencing a few losing trades.
You must resist this impulse, because in 99% of cases, it is not the trading strategy that needs to change, but you yourself. This may sound a bit strange, but the next point will delve deeper into this issue. Over the years, we have observed many traders and repeatedly seen that many traders struggle to accept the fact that even a profitable trading system will incur losses frequently. When traders cannot accept that a system may incur losses, even if it may be profitable in the long run, they are more likely to jump to a new strategy, hoping to find one that never loses. The sooner traders are prepared to accept the fact that “there is no perfect trading system” the better it is for their overall progress.
4. Learn from mistakes Regularly reviewing or revisiting your trades has two main purposes. First, most traders will realize that their losses are caused by themselves. This means that most losses come from deviating from their trading rules. Of course, sometimes you can do everything right, but trading still doesn’t work. However, in the initial stages, most of your trading losses are likely due to violating trading rules.
This is good news because it means that traders do not need to switch to a new trading strategy but must begin to work harder on self-improvement, build better coping mechanisms, and improve discipline. Review each of your recent trades to see if you made any mistakes and how you can improve your decision-making. Additionally, regular trading reviews or revisits can reveal problems in your trading strategy.
Recently, I spoke with a trader who said that although most of his trades succeed, 90% of the time, the price hits the stop-loss first before returning to the expected trade direction. In such cases, the stop-loss used by the trader may be too close to the price; by giving the trade a bit more room, he could turn some losses into profits. Such insights are invaluable and can only be discovered during the review process of trading. Unfortunately, most traders do not regularly review the issues in their past trades, thus never learning from their mistakes.
5. Backtesting - Accelerate the learning process Backtesting is another excellent way for traders to accelerate their learning process, aside from maintaining a trading journal. In backtesting, traders analyze historical price data by applying their trading rules to find trading opportunities. The goal is to assess how the trading strategy and specific trading rules performed in the past. Traders can gain important insights through backtesting, such as historical win rates, how many trading signals the strategy generates on average, and what the best risk-to-reward ratio is.
Additionally, backtesting can help traders enhance their ability to recognize chart patterns. Most traders use technical analysis, price action, and/or chart patterns in trading. However, in the initial stages, your chart pattern recognition skills may not be very good. But by reviewing a large amount of historical data and conducting multiple backtests, you will encounter various chart scenarios. This will enable traders to recognize good trading opportunities in real-time trading more effectively. The more backtests you conduct, the better; we recommend spending more time on backtesting, for instance, spending 30 minutes on a backtest for quick trading learning.
6. When to start real trading Real trading refers to the use of real money for trading. In the initial months, traders typically practice with a demo account, where they trade using virtual currencies with real market data. The question of when to transition to real trading always arises. Unfortunately, there is no objectively correct answer regarding the best time to start real trading. Before you start trading with real money, you should have a good understanding of your trading strategy and conduct backtesting on historical data to verify whether your trading rules would have been profitable in the past. However, this does not guarantee that the same rules will be profitable in the future.
7. Expectation management and risks Most traders start trading believing it is a way to make a lot of wealth in a short time. However, after some time trading, it becomes clear that making money in the trading market is not that easy. Nevertheless, many traders still cannot give up their dreams and continue to take risks. To make a lot of money, traders must take on significant risks. High risks often lead to more margin calls and greater losses.
Therefore, in your early trading period, you should practice risk management, especially position sizing. Generally, trading books and other esteemed traders recommend a 1% position size rule. This means you should not risk more than 1% of your trading capital on any single trade. This is a good starting point as it reduces the likelihood of large losses, thereby decreasing the chances of emotional trading, preventing traders from losing more.
Trading is a long-term process, and the saying "Rome was not built in a day" absolutely applies to trading. Initially, when you are not a full-time trader and still have a regular job, you have certain advantages. First, there is little (or very little) pressure to earn income from trading.
Your daily work income will provide you with trading funds and daily expenses, allowing you to trade easily. Additionally, you can start increasing your account funds by regularly depositing into your trading account. However, this should only be done after you have proven over several months that you can sustainably profit in the long term. You must acknowledge that accumulating capital is a long-term process, and it takes time to increase your trading account funds through a proper position-sizing strategy.
Many traders give up at this point because they hope to gain more quickly and become rich overnight. However, there is no need to rush; you cannot force the market to conform to your artificially set growth targets. Even if it may take 5 years or longer, the final result is still worth it, as shortcuts will not lead you anywhere. Finally, remember that trading carries risks, and no one can guarantee that every trade will be profitable. It is important to maintain profitability over the long term rather than in every single trade.
Continuous learning and improvement, staying cautious, can increase your chances of success in trading. At the same time, always invest only the risk capital you can afford to lose, and do not trade with money you cannot afford to lose. How to double profits in the cryptocurrency world! These points are very important! Can you make money in the cryptocurrency world? The answer is yes. Everyone can make money in this circle, but the prerequisites are to do two things: control risks and act against human nature. There are many lessons learned from those doing A-shares, trading crude oil and foreign exchange, and funds, including the wealth myths in the crypto world we have seen in recent years.
Those who enter the financial circle all have a philosophy: making money with money, the chicken lays eggs. Rather than selling one's labor for small rewards, this is the lowest form of making money. So, how to make big money in the cryptocurrency world and double profits? If summarized in three words, it is called: expectation difference! What is expectation difference? Simply put, your buying timing must be sufficiently low, and your selling timing must be relatively high enough. When can you buy? The market trend can be divided into bear markets and bull markets, and prices can be categorized as rising and falling.
If it's a bear market, do not buy if prices are declining in the short term; if prices stabilize and show signs of rebound, you can buy in moderation and do some short-term trading. If the bear market must go all the way down, and prices are oscillating within a small range, you can buy. In a bear market, choose to hold coins, waiting for an increase; in a bull market, choose the right time to sell. Points should be bought at support levels, where the cost of entry is the lowest and the possibility of chasing highs is also the lowest.
If it breaks below the support level, you can immediately stop loss. New investors can start with short-term trades first, then long-term, first spot trading, then futures. In general, during significant market trends, follow the trend to buy; it is better to miss out than to make a wrong move. In the investment process, how to choose the right investment coins, how to invest (how beginners can buy and sell), and how to choose the appropriate investment timing and position management are all very important.
Today I will teach you a naked K strategy with a success rate of up to 90%—a method I have used for many years and still frequently employ today. 1. Find K-lines, add image annotations, no more than 140 words (optional) 1. Pinbar has no color requirements, and the body cannot be too long; 2. The length of the opposite shadow must be; 3. Of course, there will be some deformed K-lines in actual trading that also fit, such as in the figure below; the other end of the K-line in the same direction can have a shadow, but it must be very short! With this, the first step is complete. To help with memory, we will give these two K-line shapes respective names.
From now on, tell yourself: Only enter trades when you discover shooting stars and hammer lines in K-lines; otherwise, just observe, and your win rate will greatly increase! Don’t think you will miss a lot of trading opportunities; the simpler methods often make the most money when you lack skills. Please note: Regarding finding Pinbar patterns, the two conditions mentioned above are necessary; do not force it. If you deliberately look for K-lines for trading, you will find a lot of Pinbars, but 80% of them will be false!
2. Find the location Although the single K-line Pinbar has no color requirements, it has very high requirements for its position. If the position is wrong, the effect is null! Therefore, the Pinbar must be in the correct position to have an excellent effect.
Please remember the following two points: The shooting star line must be at the top of an upward trend; the hammer line must be at the bottom of a downward trend. The Pinbar must be at a key position (main support or main resistance). Next, let’s learn the first point: the shooting star line must be at the top of an upward trend; the hammer line must be at the bottom of a downward trend.
We will look for several easy-to-understand examples in live trading: The hammer line appears during a small pullback in a downward trend, and the lowest point of the hammer line is also the lowest point of the downward trend segment. After several subsequent K-lines, none have breached the low of the Pinbar, leading to a swift price reversal and new highs.
This Pinbar is an effective K-line; the position of this hammer line is textbook-like. If you are doing intraday trading and often look at minute charts, it is equally applicable. Of course, this method is not limited to Bitcoin but is more applicable to other cryptocurrencies.
Even stocks, foreign exchange, futures, etc. We will now look for real cases of shooting star lines. As shown in the figure above, during a not-so-dramatic upward trend, a shooting star Pinbar appeared, and the market instantly began to reverse, plunging.
3. Develop a trading strategy After learning how to find Pinbars, the next step is to learn how to enter the market and make money! It is said that those who can buy are apprentices, while those who can sell are masters.
A complete trading system includes the underlying asset, position sizing, direction, entry point, stop-loss point, take-profit point, strategy, and follow-up... We will discuss each one. The underlying asset and position sizing I do not need to elaborate on; let’s focus on when we discover an effective Pinbar pattern.
How to quickly seize entry opportunities Generally, there are two breakthroughs for entry: reverse breakout signal stop-loss, retracement exceeding 50% of the signal stop-loss, profit-taking placed at a position equidistant from the Pinbar or moving stop-loss. Enter at 50% of the retracement signal, reverse breakout signal stop-loss, profit-taking placed at an equal distance from the Pinbar, or moving stop-loss.
Examples: We can verify in the first part of the live trading when to take profits? Remember two points: the profit-loss ratio must be greater than 1:1.5, at least eat from the highest point of the Pinbar to the lowest point. What is the profit-loss ratio greater than 1:1.5?
This means that every time I invest my principal for trading, I can only lose 1 yuan, but I must earn at least 1.5. This is a 1:1.5 ratio. If you encounter an excellent bullish entry opportunity, and the entry price is 2000, the stop-loss price is 1900, then your take-profit should be at least above 2150. As long as your profit-loss ratio is strictly maintained above 1:1.5 in the long term, you only need a 40% win rate to guarantee that you earn 100%, not to mention the strategy I taught you today has a win rate of up to 90%.
I know you may have some knowledge of the technicals, and you know that Pinbars can be subdivided into engulfing patterns, inside bars, hanging man, gravestone doji, dragonfly doji, morning star, evening star...
And so on, but as my title states, this strategy is suitable for beginners; you do not need to remember so much, nor does it need to be overly complicated; simplicity is key. This pattern is indeed rare; for Bitcoin, one or two occurrences a week is reasonable, aiming to reduce trading frequency. If your skills are not great but you trade frequently, you are likely to suffer significant losses!
What does the second point mean? At least eat to the amplitude of the single K-line of the Pinbar. As shown in the figure, the amplitude of a single K-line = highest price - lowest price. This Pinbar's amplitude is 4833 points, so you should at least aim to gain 4833 points when going long here. However, in reality, the situation climbed nearly 10,000 points.
The two profit-taking methods above are both relatively common, and the market is likely to hit those levels. Another situation is that sometimes the market can surprise you. You might only want to take 2000 points, but the market gives you 5000 points, yet you have already taken profit and exited, often feeling regretful.
For such situations, you can learn more advanced profit-taking methods: three-line profit-taking method! (Moving stop-loss) Of course, there is no holy grail in the trading market; the Pinbar strategy I discussed today will also fail at times, so entering has risks, and trading requires caution! But I believe it is enough for beginners, and strict stop-loss must be enforced.
Four major high-risk operations in the cryptocurrency world, beware! Don’t let investments turn into losses! In the world of digital currency, investment opportunities coexist with risks.
Especially for some common high-risk operations, a slight mistake could lead to losses of millions. Today, let’s explore these operations together and remind everyone to stay highly vigilant.
Operation 1: Blindly following trends and chasing highs and lows The cryptocurrency market is unpredictable, following trends and chasing highs often makes one a high-position trader, while blindly selling may lead to selling at the market's lowest point. Therefore, investors must conduct thorough research before making decisions, maintain calm judgment, and not be swayed by the market's short-term fluctuations. Remember, investing is a marathon, not a sprint; stability and patience are the keys to winning.
Operation 2: Overly focusing on short-term gains The short-term fluctuations in the cryptocurrency market are significant; over-focusing on short-term gains often leads to neglecting long-term investment value. Frequent trading not only increases costs but also easily misses long-term investment opportunities. Therefore, investors must have a long-term vision, adhere to value investing, and hold long-term to achieve more stable returns.
Operation 3: Ignoring risk management Risk management is crucial in cryptocurrency investing. Ignoring risk management and putting all funds into one project is undoubtedly a risky move. If the market changes unfavorably, investors may face significant losses. Therefore, it is essential to emphasize risk management, reduce the risk of a single project through diversification, and set reasonable stop-loss points to protect the principal from losses.
Operation 4: Believing in rumors In the world of digital currencies, rumors abound. However, these messages are often unverified, and blindly believing them can lead to major losses. Therefore, investors should base their decisions on reliable information and rational analysis, rather than blindly following trends or believing in rumors.
Only by insisting on independent thinking and prudent judgment can one avoid being misled. So, how can investors preemptively ambush potential coins to maximize profits? This requires investors to have deep market insights and rich investment experience. It is recommended that investors fully understand key factors such as project background, team strength, and technological progress before layout, and make rational judgments in conjunction with market trends.
At the same time, you can also pay attention to some professional cryptocurrency media to obtain more valuable information and advice. In short, investing in cryptocurrencies is a high-risk, high-return game. For investors to succeed in this market, they must remain vigilant at all times, avoid blindly following trends, over-focusing on short-term gains, neglecting risk management, and being overly credulous about rumors and other high-risk operations.
Only rational investing, long-term holding, and focusing on risk management can lead to steady progress in the world of cryptocurrencies and achieve wealth appreciation. In conclusion: those who make money in the cryptocurrency market belong to this category; it is not about what techniques and methods are used, but about your self-discipline. Trading in the cryptocurrency market is sometimes not a battle of strategies but a battle of time and patience.
In the cryptocurrency world, it is essentially a contest between retail investors and the big players. If you do not have cutting-edge news or first-hand information, you can only be at a disadvantage! If you want to work together to layout and harvest from the big players, feel free to follow me!
Welcome like-minded cryptocurrency enthusiasts to discuss together~ There is a saying I strongly agree with: the boundary of knowledge determines the boundary of wealth; a person can only earn wealth within the boundary of their knowledge.
The mindset for trading cryptocurrencies must be good; do not let blood pressure rise during a significant drop, and do not become complacent during a big rise; taking profits is essential. For those with limited resources, being steady is the unshakeable way to survive.
Giving roses to others leaves a lingering fragrance in hand; thank you for your likes, follows, and shares! Wishing everyone financial freedom by 2025!