Trading coins is simply about repetition. When you reach the top, you will suddenly realize it. Today, I will wholeheartedly share the trend charts of trading with those climbing up the mountain, hoping these 8 images and texts will help you understand the truth and essence of trading!
As the old saying goes, 'No wealth without risk, no fat horses without night grass.' I believe many people's initial intention for entering the crypto world is to make a big profit and then reach the peak of life. However, many end up losing money due to a lack of proper methods, ultimately losing both their loved ones and their capital. Thus, many people start their learning journey, such as buying books, researching materials, or learning from experienced individuals.
It can be said that I have tried 80% of the methods and techniques in the market. I will share with everyone the most practical strategies from real combat—common K-line combinations and patterns along with the following iron rules, which have proven effective! A monthly profit of 30%.
After much trial and error, I have summarized 8 iron rules. The content is not extensive but is highly valuable. If you find it unreasonable after reading, feel free to say whatever you like!
1. Divide your funds into five parts; only invest one-fifth each time! Control your stop-loss at 10%. If you make one mistake, you only lose 2% of your total funds. If you make five mistakes, you will lose 10% of your total funds. If you are correct, set a take-profit of over 10%; do you think you will be stuck?
2. How to improve your win rate again? In simple terms, it's two words: go with the trend! In a downtrend, every rebound is a lure to buy; in an uptrend, every drop creates a golden opportunity! Which is easier to profit from: bottom fishing or buying on the dip?
3. Don't touch coins that have surged rapidly in the short term, whether mainstream or altcoins; there are very few coins that can make a series of major upward movements. The logic is that after a short-term surge, it's quite difficult to continue rising. When it becomes stagnant at high levels, it will naturally decline later—this is a simple truth, yet many still want to take a gamble.
4. Use MACD+ to determine entry and exit points. If the DIF line and DEA form a golden cross below the O-axis and break through the O-axis, it is a solid entry signal. When MACD forms a dead cross above the O-axis and moves downwards, it can be seen as a signal to reduce positions.
5. I don't know who invented the term 'averaging down,' but it has caused many retail investors to stumble and suffer huge losses! Many people keep averaging down while losing, which is the biggest taboo in trading; it puts you in a dead end. Remember, never average down when in loss; do it when in profit.
6. Volume and price indicators come first; trading volume is the soul of the crypto world. Pay attention to volume breaks at low levels during consolidation, and decisively exit when high levels show volume stagnation.
7. Only trade coins in an upward trend; this maximizes your chances and saves time. A 3-day moving average turning upwards indicates a short-term rise, a 30-day moving average turning upwards indicates a mid-term rise, an 84-day moving average turning upwards indicates a main upward trend, and a 120-day moving average turning upwards indicates a long-term rise!
8. Persist in reviewing weekly, check if your coin holding logic has changed, technically observe whether the weekly K-line trend matches your judgment, and if the direction has changed, promptly review and adjust your trading strategy!
The trading operation rules of excellent operators in the crypto market:
First, buy horizontally and buy pits, don’t buy vertically; the selling point is at the peak. The crypto world resembles a turbulent mystery sea, where virtual currency prices fluctuate like waves.
In this field filled with opportunities and risks, excellent operators know that trend judgment must come first. Just as sailing requires a compass to guide direction, closely monitoring moving average indicators is key to understanding market trends. Carefully study the subtle changes in each moving average and the tug-of-war between supply and demand; this will allow you to grasp the situation early and lay a solid foundation for subsequent operations.
Second, continuous small rises are real increases; continuous large rises require exiting. Once you accurately capture the signs of a trend, the timing of entry becomes crucial. This is like a hunter waiting for the best moment to strike; the operator must be as focused as an eagle locking onto its target, closely watching for unusual volume changes. The flow of funds in the market is like a hidden current; once the volume shows abnormal fluctuations, it often indicates that the market is about to start. However, at this time, you must not be impatient; patiently wait for the price to stabilize after a correction. Confirm that this is not a false signal before decisively acting; you must not let a temporary surge cloud your judgment and blindly chase high prices, or you will easily fall into the trap of being stuck at high positions.
Third, a sharp drop with low volume is intimidation; a gradual drop with increasing volume means you should withdraw quickly. Entering the crypto market requires setting stop-loss and take-profit levels as two solid defense lines to protect wealth, which must be set cleverly and precisely. Each order must involve weighing the risks and rewards in advance, clarifying the maximum loss you can tolerate. This is the basic principle for survival in the market. At the same time, when facing profits, always remain clear-headed and not blinded by greed; set reasonable profit targets and take profits when available. Don't be greedy, or you may lose what you have worked for.
Fourth, a significant surge must be followed by a pullback; don’t dig deep holes and don’t buy too much. Reasonable planning of trading positions is another essential skill for an excellent operator. This is akin to military strategy; the allocation of troops is crucial. You must never rashly commit all your 'troops,' i.e., funds, to a single coin, as this all-in approach is extremely risky. If the market reverses, you will suffer severe losses. Conversely, using a phased entry and exit strategy is much more sophisticated; gradually adjust your positions according to market changes, which can reduce risk and flexibly respond to various emergencies, ensuring safety amid the turbulent crypto market.
In the process of trading in the crypto world, never trade emotionally. Don't panic and sell when you see the market drop; don't rush in when you see it rise. Such emotional trading often leads to deep regret. Calm analysis and rational operation are the hard truths; trading is not just a contest of skills and strategies but also a test of the operator's mindset!
If you plan to trade coins long-term but don't understand the technology and haven't found effective trading tips, you might as well try this super simple 'foolproof' strategy. Even if you're a novice, you can easily get started with a success rate of up to 80%. Whether buying or selling coins, just follow the steps.
First, you need to choose coins that are rising or at least stable; those that are falling or obviously trending down should be passed over.
Then, divide your money into three parts. When the coin price surpasses the 5-day moving average, carefully buy one-third first. Once it surpasses the 15-day moving average, buy another third. If it can surpass the 30-day moving average, also invest the last third. This step must be strictly adhered to; don’t be lazy.
Next, if the coin price surpasses the 5-day moving average but lacks the strength to continue towards the 15-day moving average and instead falls back, as long as it doesn't break below the 5-day moving average, hold steady. If it does break, sell quickly.
By the same logic, if the coin price surpasses the 15-day moving average but lacks momentum to continue rising, as long as it doesn't break below the 15-day moving average, continue holding. If it breaks, sell one-third first; if the 5-day moving average remains stable, keep holding that portion. If the price surpasses the 30-day moving average and then falls back, still follow the previous rules: sell when it's time to sell.
Conversely, do the same when selling coins. If the coin price is high and breaks below the 5-day moving average, sell one-third first. If it doesn’t fall further, continue holding the remaining 60%. However, if it breaks through the 5-day, 15-day, and 30-day moving averages, sell everything without hesitation.
This foolproof strategy, while simple, crucially requires following the rules. After buying, the rules for buying and selling must be established. Only by strictly adhering to the rules can one earn money!
Methods to avoid losing money in the crypto world:
Many friends experience two states after losing money in the crypto world:
First, having an irresponsible attitude towards money; losing money yet comforting oneself, thinking wealth is external and can be lost due to bad luck, completely relying on luck for such a professional matter signifies a lack of true understanding and respect for money.
Second, after losing money, I never thought about why I lost it and wouldn’t summarize the reasons for my losses. Thus, I continued making the same mistakes, running hard down the wrong path, drifting further from my correct goals.
So actually, losing a certain amount of money is not the worst part; the worst part is losing money without knowing how it happened! If you can't avoid the reasons for losing money, you'll keep losing.
My experience and investment strategy in the crypto world over one year:
The first major principle: selection and timing: study good targets and thoroughly research how to buy them.
The main indicators for buying good targets include several factors:
1. Fundamentals; if the fundamentals are good, you can hold long-term. At worst, you might be stuck for 3-4 years, but in the next bull market, you can still make several times your investment.
2. Price; the price you buy at is not high and is at a relatively low level.
3. Timing; if a trend is forthcoming, recovery will be quicker, for instance, buying at the end of a bear market is better than at the beginning because in early bear markets, your money might be tied up for 1-3 years. Buying at the end of the bear market allows the trend to rise quickly, and your money will increase several times in no time.
The second major principle: thoroughly research top indicators, and make large positions based on low buying and high selling throughout the entire bull market cycle.
I personally use the core top indicators for bull markets within internal communities.
1. Bitcoin market cap ratio: if we reach the peak, there’s a high chance it will break below the previous low of 36. If it breaks below 40, pay special attention, as 9.7 was a significant drop after hovering around a market cap ratio of 40.
2. The ETH/BTC ratio; if it breaks above 0.1, the target is around 0.12, and it may even reach 0.14-0.2. Pay close attention to the risk of a significant pullback if it breaks above 0.1.
The third major principle, coin-based valuation, is a very important core idea for me.
I use coin-based valuation to earn coins through grid trading.
I use Bitcoin-based valuation. Although many buy various altcoins, ultimately 96% of people cannot outperform Bitcoin. Therefore, my goal is to profit from Bitcoin's price fluctuations by selecting the right assets to earn Bitcoin. Using a quantitative grid trading strategy, I open Bitcoin-based grid positions, which lowers my risk. When other coins rise relative to Bitcoin, I will sell them in batches to buy Bitcoin. When the market falls, I will sell Bitcoin to buy these coins (as Bitcoin tends to fall less than others).
The fourth major principle: combine long and short trading systems. For example, my long positions are for holding coins, and I absolutely avoid short-term high-selling and low-buying. My short positions use quantitative grid trading to automatically help me do high-selling and low-buying. The profits from grid trading are similar to those from my holding coins.
The fifth major principle: patience; position yourself at low levels and hold your coins patiently without chasing highs.
You must have patience; valuable coins will certainly rise. It's just that sectors rotate, and you can't catch all the surging coins. When your coins are stagnant and you want to sell them to chase other coins, take the time to study the coins you bought: their teams, business models, sectors, official websites, and communities (Twitter, Instagram), etc.
Don't sell just because you've waited too long and then see a slight rise; after waiting so long, you end up missing out on the larger increase. As the saying goes, it's harder to hold onto coins than to hold onto a widow; the best way to hold coins is actually to implement grid trading, especially coin-based grid trading, which can outperform simple accumulation with relatively lower risk.
The sixth major principle: your trading rhythm and trading cycle must be well thought out.
Many people look at the market every day but do not know what cycle they should be observing. If they look at the minute charts, they will see minute-to-minute fluctuations between bull and bear, which leads to insomnia and loss of appetite.
Generally speaking, start by looking at larger cycles before moving to smaller cycles.
If you are a long-term holder, look at the weekly chart, then the daily chart, and the four-hour chart. Occasionally check the 1-hour and 30-minute charts mainly to determine buying opportunities. Generally, you should avoid looking at the 1-minute and 5-minute charts. I used to make a big mistake by often looking at the 1-minute and 5-minute charts, leading to anxiety. Short-term trading will likely result in fewer coins; many people can't even make money in fiat, let alone increase the number of coins they hold.
Look at the time cycle of the K-line to determine the maximum holding time: 1 minute for tens of minutes; 5 minutes for a few hours; 15 minutes for one or two days; 1 hour for a few days; 4 hours for several weeks.
In this mysterious field filled with opportunities and challenges, some become rich overnight while others lose everything.
When you grow from tens of thousands to hundreds of thousands, you will touch on some ideas and logic about making big money, and your mindset will also stabilize significantly.
Afterward, continuously replicate successful experiences.
Don't always fantasize about millions or even billions. Start from your actual situation and avoid empty talk; after all, boasting will only make you feel good.
Two years ago, I met a senior in Shanghai who easily withdrew more than twelve million in the crypto world using the simplest method. He taught us that the simplest way is always the best. If you complicate trading too much and consider too many factors, your judgments will become less accurate.
Those who lose money trade coins like this. Wanting to profit is actually simple: just find a method that suits you and that you are good at, and repeat it. Before you know it, your account balance will increase.
Here are a few rules he shared. If you can learn them, even if you can't multiply your money dozens or hundreds of times like your predecessors, at least making some pocket money should be no problem.
First, wait for the highs and lows before acting. When the market is in a horizontal consolidation phase, it’s best to observe for a while, as consolidation will lead to a change in trend. Wait for a clear trend before taking action.
Second, don't get attached to hot positions; frequently change your holdings. From start to finish, it's a complete emptying. All short-term hot positions are speculative; once the heat passes, funds will immediately leave. If you run slowly, you will be left alone in the wind.
Third, a rising gap means hope for a big increase. The K-line gradually rises, showing a high opening bullish line with increasing volume, indicating that the market is entering an acceleration phase. At this point, we must remain calm, hold our positions tightly, and wait for a big profit.
Fourth, don't get attached to large bullish candlesticks; exit decisively at the end of the trading session. Regardless of whether at high or low levels, after a large bullish candlestick appears, there will always be a pullback, even if it hits the limit. We must prevent profit withdrawal.
Fifth, buy on bearish candlesticks, but if you buy incorrectly, sell on bullish candlesticks even if it’s wrong. Here, 'candlesticks' refer to moving averages or important support or resistance levels.
Short-term traders generally only look at daily moving averages and daily attack lines. I don't like to procrastinate; short-term trades usually only last three days, at most not exceeding a week, regardless of how things look afterward.
Sixth, don’t chase high prices, don’t sell, don’t panic sell, and don’t buy during a downturn; remaining motionless is a basic principle for survival in the crypto world. If you want to survive in the crypto world for a long time, this sentence is something you must remember.
Seventh, prepare to buy. It’s better to enter less than more. No matter how confident you are, you cannot invest all your funds at once because the only constant in the crypto world is change.
Eighth, learn to observe the news and interpret market information. Major market news usually coincides with the largest price fluctuations in cryptocurrencies, which could lead to significant rises or falls. Traders need to make judgments; for novices, it is advisable to maintain a wait-and-see attitude during major news events.
Ninth, learn to analyze the technical side and master technical indicator knowledge. The study of technical indicators requires long-term accumulation; set a learning plan for yourself to study moving averages, KDJ, Bollinger Bands, K-lines, volume, fund flow, etc.
Tenth, make a good trading plan. Don't trade frequently; frequent trading not only incurs high fees but also affects your trading mindset, leading to a loss of rational judgment.
Lastly, I advise everyone not to be arrogant after making money. Suppose you hit a hundred-fold coin out of sheer luck; you should find a way to safeguard your wealth. That isn't your skill; money made by luck can be lost through ability! Stay away from easily brainwashed individuals who often talk about surpassing Bitcoin and blockchain revolutions but don't even understand what a block is. They are typically very stubborn; even if you tell them the truth, they will still say you lack understanding.
