I have been trading cryptocurrencies for over ten years, from liquidation to achieving financial freedom, supporting my family through trading. In 2024, my capital has increased by 50 times; if it weren't for withdrawing funds twice to buy a house, it should have increased by 85 times.
Today I will share my trading strategies and insights with friends in the cryptocurrency community.
There is a saying, standing on the shoulders of giants can save you ten years of effort.
At the end of the article, I will also discuss the most important skills and methods.
For friends who have the fate to see this and want to improve their cryptocurrency skills, you must read more and study carefully; it is recommended to bookmark!
Survival rules:
Use 2% of your position to test (maximum loss of 2000 for every 100,000).
Set automatic take-profit and stop-loss (do not trust your own hands).
Establish a trading journal (record the emotions of each operation).
Weekly review (analyzing which operations were influenced by emotions)
Path of evolution:
▫️Beginner: Crying from being bullied by the market (90% fail here)
▫️Intermediate: Learn to trade with discipline (6% can achieve this).
▫️Advanced: Unmoved by rises and falls (0.9% of ultimate players).
▫️God-level: Harvesting emotions (0.1% at the top of the food chain)
The market will not punish you, but it will definitely teach you.
Some say the market is the fairest teacher. It won't punish you for making mistakes, but it will repeatedly give you the same lesson until you truly learn.
Trading has no 'secrets', and the market has no 'shortcut'.
Do not let momentary gains or losses break your defense; the cryptocurrency space is both a game against the market and a game against oneself.
The fluctuations of K-lines in the cryptocurrency market not only reflect the trajectory of investment funds but also record the changes in investor sentiment. The fear of missing out leads people to buy at highs, while fear leads them to sell at lows. Those who can survive and thrive in the cryptocurrency space are often those who can control their emotions and persist.
These investors have clear trading strategies and strict entry and exit standards, which is what many refer to as an investment system, rather than just focusing on immediate gains, being led by the market's short-term fluctuations. A gambling mentality may allow such people to win once, but they cannot survive long-term in the cryptocurrency space.
I will teach you how to draw accurate trend lines and refuse to be a '韭菜' (a term used for inexperienced investors who are easily manipulated)!
1. Descending trend line
I believe many friends know about trend lines, but what is their main function? Today I will explain it to everyone. Trend lines are mainly used to judge medium to long-term trends. The basic points are: to mark support and resistance levels.
Take a look at this chart: This is the BTC 4-hour chart, and the straight line is the descending trend line. Every time the price approaches the red circle, it falls back, so this descending trend line is currently a resistance level for the price.
From the above image, we can see that the current price is not far from the straight line. If the price comes near the line in 4 hours, without needing to ask or think, it is definitely a short position since this line is a descending trend line. The descending trend line is used to judge the downward trend of the market.
2. Ascending trend line
Look at the chart below, this is the HT 4-hour chart. From the chart, we can see that every time the price falls back, the low points are above the blue line. After touching the blue line, it means it will rise. Therefore, the blue ascending trend line is an important support level for the price.
Then when the price falls back to the ascending trend line, will it find support? Once it stabilizes, we can consider entering and laying out long positions, following the upward trend.
3. How to draw lines
After introducing the ascending and descending trend lines, everyone may be curious, how do we draw these trend lines?
Two points connected form a line. This is the simplest way to draw lines! However, this method has obvious drawbacks and lacks reference significance.
To draw high-quality trend lines, a good method is to find three clearly formed points, which should be the peaks or troughs of price fluctuations that can connect to form a clear line. For example, in the BTC 4-hour chart below, we draw a line through two points in the chart.
Next, we need to verify whether this descending trend line is useful and valuable! So we need to find a third point for verification.
We extend the trend line, and we can see the third point: the green circle, also on this trend line. Thus, we can determine that this blue descending trend line is indeed significant and valuable for the current market situation!
The more points on the trend line, the more significant the line is! The fewer points, the less significant it is!
Trend lines drawn from larger cycles have more significance than those drawn from smaller cycles! This is due to the effect of the cycle! For example, a 4-hour trend line has more impact than a 15-minute trend line.
Comparing the 15-minute BTC trend in the chart below, the descending trend line was broken by price, and contrary to the chart, it led to a rise; what is the reason?
The reason is that the 4-hour trend line has not been broken, so the 15-minute and 4-hour charts should be viewed in combination. The longer the cycle, the greater the significance; short-term trend charts are mainly used for short-term trading or contracts.
Fourth, the approach to capturing trend line breakouts.
A breakout of a trend line signifies strong support or strong resistance. Therefore, if this market structure is broken, significant breakthroughs may occur. To catch trend line breakouts, I commonly use the closing price method, which is to see if the closing price also breaks the trend line!
Because prices often pierce through trend lines, but if the closing price still adheres to the trend line, this is a common false breakout, and many friends may fall into this trap.
We can analyze it together. In the chart below, lines 1 and 2 are well drawn and significant. However, one must pay attention to the fact that if these lines no longer apply to the current market situation, they should be removed to avoid misleading.
The third oscillation range is not drawn perfectly; you can see in the chart below that I have divided it into two oscillation ranges.
Everyone can determine trend breakthroughs using the closing price method to ascertain whether the trend has broken! In the 4-hour BTC market, after the K-line closes at midnight, everyone can check if this line has been broken.
In fact, personal line drawing is achieved through countless practices on the market. Practice makes perfect. For line drawing, this is also key! Once you are proficient, you can draw correctly, effectively, and profitably.
Five, interactive Q&A.
1. Question: Regarding today's sharp decline, I feel it has already reached a short-term bottom, what do you think, Feitian?
Answer: I think it should refer to a big market trend, which will arrive around November. In the next few days, we will see if it stabilizes; if it does, we can start building positions now, which is relatively suitable. Because mainstream coins have been rising for several consecutive days, then falling back, we can open some short positions for hedging. Those with holdings can open short positions for hedging, and those without can start building a part of their positions now, or wait for it to drop a bit more before adding to their positions. At this time, your necessary position in mainstream coins must be maintained; otherwise, if there is a sudden surge, you may miss out and feel anxious.
2. Question: When will GXC rise?
Answer: For GXC, I suggest maintaining a low position or reducing positions, as it has recently attracted a lot of attention. Focus on whether the operational team is still functioning.
3. Question: Generally, do we build positions or reduce positions immediately after breaking through the trend, or wait a while to see if it stabilizes?
Answer: Generally speaking, if you have positions, it is easier to operate. For example, if you establish a three-layer position, if it rises, you can add to your position; if it falls, you can retain a certain position, and when it falls by about 10 to 20 points, you can add more to lower your holding cost.
4. Question: Can the teacher only connect the pressure line to the highest candlestick points? Can it not connect to the closing price? How are the high and low points determined?
Answer: The highest point is just a form. The most important thing is to mark the high and low points within a certain range. The highest price with volume among the highest candlesticks is the peak. Conversely, the low points follow the same principle.
Many people say that short-term trading is speculation.
Firstly, it must be said that short-term trading is not speculation. Real short-term operations are a type of investment behavior that requires a mastery of certain market operating rules and strong skills. Short-term trading really tests a person's skills and patience.
1. Formulate a clear investment plan. If you want to do short-term trading in cryptocurrencies, first set a clear investment plan for yourself, determine how much capital to use, and how much return you can expect each month. This needs to be planned according to your risk tolerance.
2. Ensure you have enough time and energy. Intraday short-term trading focuses on the frequency of profits, not the size of single profits. Develop your own trading principles and habits; don’t place orders just to place orders, and don’t feel an itch to trade if you aren’t.
3. Because short-term investments generally involve frequent trading, choosing the right coins is very important; trades must be continuous.
4. When holding a profitable position, close it as soon as it reaches your psychological point; do not aim to capture everything. Also, pay attention to position and leverage control, and learn to strictly control your position according to the leverage of the products you trade and your own capital.
5. Use technical indicators: There are countless technical indicators in the market, at least over a thousand. They all have their focuses, and investors can't cover them all; just familiarize yourself with a few. Common technical indicators include KDJ, RSI, etc.
6. Use moving averages: Short-term trading generally refers to the 5-day, 10-day, and 20-day moving averages. When the 5-day moving average crosses above the 10-day and 20-day moving averages, and the 10-day moving average crosses above the 20-day moving average, it is called a golden cross, which is a buying opportunity; conversely, it is called a death cross, which is a selling opportunity.
7. During rapid rises and falls, try not to operate.
8. Do not look too much at other people's analyses; everyone says different things. The price trend is influenced by many factors, and all predictions about the future are fifty-fifty, half right, half wrong. Just believe in yourself.
I have distilled eight golden rules specifically to help retail investors quickly grasp the essence of investment. Although brief, each word is deeply meaningful. Once understood, it may help you avoid years of detours in your investment journey.
These rules stem from my years of exploration and practice in the market. Today, I wish to share them all, hoping every reader can draw wisdom from them, reduce the hardships of exploration, and write their own brilliant chapter in the cryptocurrency space as soon as possible.
Learn to release the inner burdens, do not be overjoyed by profits or discouraged by losses. Actively put down your phone and computer, reduce excessive focus on market trends, and face each trading challenge with a calm and determined heart.
Still the same, when in a bull market and not sure what to do, click on my avatar, follow me, for bull market spot planning, contract passwords, and free sharing.
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