Within a year, using 10,000 to earn 1 million through trading, there is only one method to achieve this: rolling positions + investing in promising altcoins!
Through my tested method, in 11 months of 2024, I turned 10,000 into over 1.8 million, multiplying it almost 180 times!
If you also want to get a piece of the pie in the crypto world, then take a few minutes to read this article, and you will be just one step away from millions!
In 2017, with a try-it-out mentality, I bought my first Bitcoin with 1,000 RMB. At that time, the price of Bitcoin was still hovering around a few thousand RMB, and I didn’t expect it to rise much. However, in just a few months, the price of Bitcoin skyrocketed, turning my 1,000 into tens of thousands.
Having tasted success, I began to delve deeper into blockchain and digital currencies, and sequentially invested in mainstream coins like Ethereum+ and Litecoin+. I learned to read K-line charts, analyze market trends, and even participated in some early-stage project's private sales.
In 2018, the crypto world welcomed a bull market, and my assets also soared. I seized the opportunity, decisively liquidated some digital currencies, and bought my first house in the city center.
Of course, the crypto world is not always smooth sailing. The events of 2019 caused me significant losses, but I did not give up; instead, I chose to continue learning and accumulating knowledge. I firmly believe that blockchain technology is the trend of the future, and the value of digital currencies will ultimately return.
In 2020, the rise of DeFi (Decentralized Finance) reignited enthusiasm in the market. I keenly captured this trend and actively participated in liquidity mining+ and staking+, reaping substantial rewards.
Now, I have achieved financial freedom, but I still maintain my passion and exploration for blockchain technology. I know that the crypto world is full of opportunities but also hidden risks. Only by continuously learning and staying rational can one navigate the turbulent seas of cryptocurrencies.
My experience sharing:
Learning is fundamental: understanding blockchain technology, the principles of digital currencies, and market trends is a prerequisite for investment.
Rational investment: Do not blindly follow trends; invest according to your own risk tolerance.
Diversify investments: Do not bet all your funds on a single project; diversifying investments can reduce risk.
The cryptocurrency market is highly volatile, and holding quality assets for the long term is more likely to yield substantial returns.
Stay calm: Don't be swayed by market emotions; maintaining a calm mind is essential for making correct decisions.
While stories of getting rich in the crypto world are certainly enviable, the risks and sacrifices behind them cannot be ignored.
I. MACD is the most commonly used indicator among experts.
The MACD indicator has a particularly unique role in technical analysis, and it can be said to be an essential part of learning technical analysis. Its importance can be summarized in the following points.
First, the MACD indicator is the most effective technical indicator tested by historical trends and is also the most widely used indicator.
Second, the MACD indicator is derived from the EMA moving average indicator and has very good application effects for grasping trending market conditions. Trend investors generally refer to this indicator in practice.
Third, the top and bottom divergence of the MACD indicator is recognized as the best method for 'buying at the bottom and selling at the top'; this method is an important tool for the concretization of trend theory and wave theory.
Fourth, many veterans have had this experience: when they first entered the field, they began learning the MACD indicator, then gradually discarded it, and after a long period of study and comparison, especially after practical testing, they eventually returned to the MACD indicator. This illustrates the uniqueness of this indicator.
Fifth, the application of the MACD indicator in quantitative trading is also extremely widespread.
It is precisely because of these advantages that the MACD indicator has become the most commonly used technical indicator among professional traders.
II. The Concept and Algorithm of the MACD Indicator.
The MACD indicator, or Moving Average Convergence Divergence, was created by Gerald Appel and is used as a technical analysis tool to track price trends and assess K line buying and selling opportunities. This indicator is commonly used in market software and is known as the 'king of indicators.' As shown in [Figure 1].
The MACD indicator in the crypto world consists of the DIF fast line, DEA slow line, MACD line, and the zero axis, referred to as 'three lines and one axis.' Investors analyze price movements through the crossing, divergence, breakout, support, and resistance of these 'three lines and one axis.' The MACD indicator is often listed as a preferred indicator in many market software, indicating its widespread application, which also suggests that this indicator is one of the most effective and practical indicators tested by history.
III. MACD's Golden Cross and Death Cross
The 'golden cross' and 'death cross' patterns are extremely important forms in technical indicator analysis. The golden cross, also known as a golden crossover, refers to when a relatively short-term indicator line crosses upwards and surpasses a relatively longer-term indicator line (of the same type), often signaling the emergence of short-term buying opportunities. If the golden cross occurs at: ① after a short-term rapid decline during a downward trend; ② after a pullback during an upward trend; ③ after a consolidation during an upward trend, especially when the golden cross appears at a phase low, it becomes a more reliable buy signal.
The death cross pattern, also known as the death cross, refers to when a relatively short-term indicator line crosses downwards and surpasses a relatively longer-term indicator line (of the same type), often signaling the emergence of short-term selling opportunities. If the death cross pattern appears after: ① a consolidation phase during a downward trend; ② a rebound during an upward trend; ③ a short-term rapid increase during an upward trend, especially when the death cross pattern appears at a phase high, it becomes a more reliable sell signal.
After understanding the golden cross and death cross patterns, we can specifically examine the golden cross and death cross patterns of the MACD indicator. The appearance of these crosses in different positions will reflect different market implications.
Situation One: Buying Point of Low-Level Golden Cross.
When the golden cross of the DIFF line and DEA line occurs below the zero axis and is far from the zero axis, this golden cross is referred to as a low-level golden cross. Investors should view this golden cross merely as a short-term price rebound, and whether the K line can form a real reversal still requires observation and confirmation with other indicators.
As shown in the above diagram:
On August 27, 2019, in the 10-minute BTC K line chart, a low-level golden cross appeared with the price's retracement, followed by a rebound of 200 dollars. Short-term investors can seize the opportunity to enter.
Situation Two: Buying Point of Golden Cross near the Zero Axis
If an upward trend has formed and the golden cross of the DIFF line and DEA line occurs near the zero axis, it is often an excellent buying opportunity for investors.
This is because after an upward trend forms, a golden cross near the zero axis indicates that the adjustment phase has completely ended, and a new round of upward momentum has begun. If this is accompanied by a golden cross in the volume line, it indicates that the price increase is supported by transaction volume, making the buy signal even more reliable.
Once this buying point appears, investors should absolutely not miss it, or they will miss the opportunity for a significant rise.
As shown in the above diagram:
On August 19, 2019, at 09:30, in the 5-minute BTC K line chart, Bitcoin broke through the 30-day moving average, indicating that an upward trend has preliminarily formed. For a period afterward, the price almost continuously operated above the 30-day moving average.
On August 19, 2019, at 14:00, the MACD indicator formed a golden cross near the zero axis, indicating that the market is about to experience a significant upward trend. Investors can buy decisively.
Situation Three: Buying Point of High-Level Golden Cross.
If the golden cross of the DIFF line and DEA line occurs above the zero axis and is far from the zero axis, then this golden cross is referred to as a high-level golden cross. High-level golden crosses generally appear during the consolidation phase of rising K lines, indicating that the consolidation has ended and the K line will soon resume its previous upward trend. Therefore, once a high-level golden cross appears, it is a good signal to increase positions.
In practice, when an upward trend forms, and the K line rises steadily for an extended period, once the MACD indicator forms a high-level golden cross, it often foreshadows that the K line will soon accelerate upward.
Because of this, high-level golden crosses can also be used for wave trading. Investors can utilize the MACD indicator to continuously target upward waves in an upward trend.
As shown in the above diagram:
On June 25, 2019, in the 3-hour BTC K line chart, the price of Bitcoin rose again after a period of consolidation during an upward trend, while the MACD indicator showed a high-level golden cross. This indicates that the pullback has ended, and the price will resume its previous upward trend. Investors should pay attention to seizing this opportunity to increase positions.
Situation Four: Selling Point of Low-Level Death Cross
A low-level death cross refers to a death cross that occurs far below the zero axis. This low-level death cross often appears at the end of a rebound in a downward trend, hence it is a sell signal indicating the end of the rebound. At this point, investors in the market should observe, while those deeply locked in should consider selling first, then buying back after the price drops to lower costs.
As shown in the above diagram:
The MACD indicator of Litecoin showed a low-level golden cross, and the price experienced a slight rebound on July 14, 2019, before quickly declining.
Subsequently, the MACD indicator showed a death cross below the zero axis, after which the K line began a new round of downward trend. Spot investors can sell positions at the death cross level and then buy back to lower their holding costs.
Situation Five: Selling Point of Death Cross near the Zero Axis.
If the previous market direction has been a downward trend, at this time, when the DIFF line breaks below the DEA line near the zero axis, it is referred to as a death cross near the zero axis, indicating that significant downward momentum has accumulated near the zero axis, and the appearance of a death cross suggests that downward momentum in the market is starting to release, and the K line will continue the original downward trend, serving as a sell signal.
As shown in the above diagram:
On August 12, 2019, in the BTC 1-hour K line chart, the DIFF line of Bitcoin broke below the DEA line near the zero axis, forming a death cross. This indicates that downward momentum in the market is beginning to release, serving as a sell signal, and investors should sell their positions decisively; otherwise, they will be deeply locked in.
Situation Six: Selling Point of High-Level Death Cross
When the DIFF line crosses below the DEA line at a considerable distance above the zero axis, it is referred to as a high-level death cross. This type of death cross pattern is sometimes accompanied by a MACD divergence at the peak, manifested as: during a continuous upward trend, the price keeps reaching new highs, but the MACD indicators' DIF and DEA lines no longer continue to rise or push higher, instead diverging from the price trend and gradually moving downward.
Above the zero axis, when the DIF line crosses below the DEA line forming a downward crossover pattern, it constitutes a death cross, which is a relatively reliable sell signal.
As shown in the above diagram:
On August 23, 2019, in the TRX 1-hour K line chart, after a preceding upward wave, the price continued to reach new highs, but the DIF line and DEA line no longer continued to rise, leading to the formation of a death cross, signaling to sell.
IV. MACD and K Line Divergence
Divergence is a term in physics that describes kinetic energy, and in technical analysis, it is a widely used analytical method with a high success rate. In a downtrend, when the price makes a new low, but the indicator line does not, it is called a bottom divergence, indicating that upward momentum is building, which is a buy signal. In an uptrend, when the price makes a new high, but the indicator line does not, it is called a top divergence, indicating that downward momentum is accumulating, which is a sell signal.
I. Bottom Divergence
(1) Bottom Divergence of MACD Histogram and DIFF Line
The bottom divergence between the DIFF line and price refers to a downward trend where the price makes a new low, but the DIFF line does not. This indicates that during the price's decline, the rate at which the DIFF line declines is less than that of the price, meaning that upward momentum is accumulating in the market, and the price is likely to stop falling, with a higher probability of an upward trend in the near future.
The MACD histogram is hidden behind the DIFF line and is divided into red and green sections. Its divergence from price is an important use of the MACD indicator and is widely applied in practice. The bottom divergence between the MACD histogram and price refers to when the price continues to make new lows, but the MACD histogram does not follow suit. This indicates that upward momentum is accumulating, and the price is likely to stop falling, with a greater likelihood of an upward trend in the near future.
When a bottom divergence occurs, investors can grasp specific buying points through two methods.
(2) Specific buying timing.
The bottom divergence between the DIFF line, MACD histogram, and price is not a specific point in time, but rather a pattern that occurs over a period of time. However, the specific timing for investors to buy is a specific moment indicating that the price is about to stop falling. Therefore, to seize the specific buying opportunity, when the DIFF line, MACD histogram, and K line exhibit bottom divergence, investors must combine the bottom divergence with other technical analysis tools to concretize the buying points.
First: Change in color of the histogram or the MACD golden cross.
The change in color of the histogram indicates that upward momentum in the market has begun to gain the upper hand. It generally appears after the 'histogram shortens,' although it may be slightly delayed, it is more reliable. When a bottom divergence occurs and the histogram successfully changes color or forms a golden cross, investors can buy.
As shown in the above diagram:
On August 26, 2019, in the 15-minute Ethereum (ETH) K line chart, the price of Ethereum made a new low during a downtrend, but the MACD histogram did not create a new low, forming a bottom divergence pattern between the histogram and price. This indicates that upward momentum in the market is beginning to accumulate, and the price is likely to show an upward trend soon.
Following the change in color of the histogram, these two sequential buying signals combined increase the reliability of the upward implication, allowing investors to enter when the histogram changes color.
Second: Combining with other technical analysis tools and K line reversal patterns.
Combining bottom divergence with K line reversal patterns, such as 'single needle bottom search' and 'three soldiers at the bottom,' is a specific application of the 'multiple indicators combination' principle.
As shown in the above diagram:
On August 26, 2016, in the 30-minute BTC K line chart, the price of Bitcoin made a new low, but the MACD histogram did not create a new low, forming a bottom divergence pattern between the histogram and the price, indicating that upward momentum in the market was continuously strengthening.
Accompanied by the price's downward reversal, forming a buying signal of 'MACD histogram and price bottom divergence + K line single needle bottom search.' Afterward, the price experienced a wave of upward trend.
Work, top divergence
(1) Top Divergence of MACD Histogram and DIFF Line.
The top divergence between the MACD histogram and the K line refers to an upward trend where the price reaches a new high, but the MACD histogram does not. This indicates that downward momentum is accumulating in the market and that the price may drop at any time.
The top divergence between the DIFF line and the K line refers to an upward trend where the price makes a new high, but the DIFF line does not. It indicates that downward momentum is continuously accumulating in the market, and there is a significant likelihood that the price will exhibit a downward trend.
(2) Specific selling timing.
Similar to bottom divergence, in practice, according to the principle of combining multiple indicators, investors can use the following methods to make sell signals more specific.
Second: Change in color of the histogram or the MACD death cross.
Once the top divergence between the MACD histogram and the K line forms, if the histogram suddenly shortens significantly, it indicates that downward momentum in the market is beginning to release. Investors should pay attention to selling in a timely manner. A change in color of the MACD histogram indicates that downward momentum has gained the upper hand, usually appearing after the histogram has been continuously reduced. If, after a top divergence between the histogram and the K line, the histogram changes color or a MACD death cross occurs, investors should pay attention to exiting in a timely manner.
