For traders, market strategies vary widely, but in terms of timing, they can be roughly categorized into short-term, medium-term, and long-term trading.
Each type of trading corresponds to different market cycle changes and corresponding investment strategy methods.
Generally speaking, an investment (including buying and selling) is completed within a day, or within 3-5 days, 1-2 weeks, and not exceeding one month is considered short-term trading.
Short-term trading is typically characterized by buying low and selling high, testing the investor's ability to monitor the market within a day; this is also the method used by most people in the market.
Medium-term trading generally lasts for 2-4 weeks to 1-3 months, and longer trends can extend up to 6 months.
Medium-term traders do not care about short-term price movements but focus on stage-wise market trends, predicting future trends based on the current market to layout their strategies in advance.
Long-term trading refers to buying and holding for at least 6 months, or more than 1 year, to obtain substantial profits through long-term market trends.
From the perspective of trading methods, short, medium, and long-term trading are merely methods and strategies; there is no distinction of better or worse, only the ability to apply them flexibly.
For investors in the market, individual differences are significant; people can have different opinions about the same cryptocurrency. Some believe in long-term investment, while others think only short-term trading is viable, and some feel it’s best not to invest at all.
Therefore, one cannot generalize; it is important to differentiate based on one's understanding and analysis of the project and to choose a strategy that suits oneself.
Many people in the market lose money by chasing highs and selling lows, buying high and selling low, and not understanding when to take profits or cut losses. Many face problems due to timing strategies, holding on to coins they believe in despite average quality, unwilling to sell when prices rise, ultimately resulting in a scenario where not only do they lose their paper profits, but they also get their principal deeply trapped, and cutting losses does not help.
There are also excellent coins that one fails to recognize the value of, buying in at low prices and then selling at lows, only to see the price rise significantly, leaving behind regret and disappointment.
As for the current digital currency market, it is small, incomplete, lacks regulation, and the quality of projects varies greatly. Therefore, there is a basic principle: for long-term trading, only hold Bitcoin and Ethereum; for medium-term trading, focus on mainstream or popular coins.
More altcoins can only be played short-term; do not have blind faith or adopt a Buddha-like attitude of holding coins until death. For medium-term and long-term trading, the best strategy is to choose coins with strong certainty, then invest regularly, starting in the mid-to-later part of a downturn to reduce the average holding cost as much as possible and increase position size, then gradually sell during the uptrend.
For short-term trading, one must proceed with caution, as the short-term price movements of coins are difficult to predict. For each transaction, from the moment of buying, you need to have a clear plan on what price to buy, what price to sell, set time limits for profit-taking if your prediction is correct, and determine how much to cut losses if your prediction is wrong. You must execute this plan strictly.
Do not extend your holding time due to greed or continue holding in the hope of a rebound due to aversion to losses; these behaviors can turn short-term holdings into a passive wait for medium to long term, ultimately leading to an inability to recover.
Of course, there is an exception: when you gradually discover that the coins you hold are potential or high-growth coins based on market judgment, you can transition from short-term to medium to long-term strategies. Besides that, strictly adhere to trading discipline. There are several technical indicators that are quite suitable for medium to short-term trading.
For example, the BoI line: when the market reaches the middle track position, observe it; buy when touching the lower track and sell when touching the upper track, practicing short-term buying low and selling high.
For example, the SAR parabolic indicator: in a small range (within 4 hours), when the K-line moves above the SAR curve, it signals a buy. When the trend moves along the SAR curve upwards and the SAR curve also moves upwards, it indicates a strong uptrend forming a strong support line, allowing you to hold or buy on dips.
When the K-line breaks down from above the SAR curve, it forms a strong pressure zone, at which point selling is the primary action.
The indicators I often use are the MA moving averages, applicable for both short and long-term trading, with a focus on the MA60 moving average trend, while the MA30/MA90 moving averages can serve as auxiliary references. Generally, when the K-line is above the MA60 moving average, it can be considered a support line, and you can buy in moderation near the support line. When far from the moving average, you can sell in moderation.
The MA60 moving average shows particularly significant effects when used for medium to long-term price analysis, as seen in the daily chart of Bitcoin below. After the price breaks below the daily MA60, the MA60 becomes a resistance level. After a period of adjustment, when the K-line breaks above the MA60, it signifies a change in trend and the beginning of a rebound.
Whenever the market pulls back near the MA60 moving average, you can buy in moderation.
During an upward cycle, if the market breaks below the MA60 moving average again, it indicates entering a high-level consolidation phase, at which point you can sell your holdings in moderation.
Of course, when using various technical indicators to analyze market trends, one must apply them flexibly, mastering one indicator or skillfully using multiple indicators depending on personal preference and proficiency. Overall, trading is an art of thinking, highly practical, testing personal abilities and levels, and feedback is particularly fast; any thought or decision you make can quickly receive feedback and validation.
At the same time, due to the complexity and variability of the market, it is impossible to blindly copy others' experiences. It tests your ability to adapt based on market conditions, making investment a very personal affair that requires you to invest a lot of energy and money to fill the gaps. Easy gains or trusting others are not advisable.
The above is a summary of my 10 years of practical experience and techniques in trading cryptocurrencies. It may not apply to everyone; each person must combine their practice with these summaries. As a trader, the most frightening thing is not having technical problems but lacking awareness, falling into these trading traps without realizing it! There is no invincible trading system, only invincible use of trading systems by people! This is the truth that trading systems ultimately return to the individual!
