If your available funds do not exceed 500,000, and you wish to stand out in the digital currency field through short-term operations, please pay close attention to the following content. After reading it, you may gain a clear understanding of the essence of short-term trading!
Having passed my thirties, I have been in the investment world for ten years, six of which have been spent trading coins to support my family. Not having pursued a finance major has always been a regret in my academic career. Since college, I have developed a strong interest in stocks, finance, and foreign exchange through the online world; the intertwined red and green screens are like a palette of life that fascinates me. Carrying an infinite yearning for the market, in my sophomore year, I resolutely opened an investment account and gradually stepped into the crypto space, where Bitcoin and other digital currencies came into my view. Thanks to a classmate's introduction, I gained a deeper understanding of this field, which further fueled my interest, and thus began my investment journey.
When I first entered the crypto space, like many newcomers, I was obsessed with technical indicators, constantly reviewing historical data in an attempt to find patterns; I was keen on investing in low-priced coins or coins that had significantly retraced, believing they were safer. However, this understanding of the market was one-sided and wrong.
After weathering the storms, I gradually realized that to quickly reap benefits in the market, short-term trading is the way to go. Of course, the compounding effect of medium to long-term investments cannot be overlooked; both should complement each other.
My experience tells me: Never let temporary profits cloud your judgment. You must understand that sustained profitability is the hardest problem to solve in the investment world. We must carefully review and analyze the success and failure of each trade, whether it was due to luck or skill. Only by establishing a stable and suitable trading system can we find the golden key to continuous profitability.
There is a saying that I will always remember: "If you do not occupy the ideological territory, it will be occupied by others."
Today, I am willing to share the valuable insights I have accumulated during my trading career with everyone selflessly. These insights are the essence of why I have been able to stand firm in the market for a long time. As long as you study seriously, you will definitely gain a lot, and your understanding of trading will undergo a revolutionary change!
I've been trading coins for 10 years now, from significant losses to substantial gains. I have summarized 10 iron rules to give all retail investors a piece of advice! If you want to play in the crypto space for the long term, please carefully read this heartfelt article! Newcomers must keep this in mind to navigate the market with ease.
The crypto space is a world full of opportunities and risks, especially for newcomers. How to survive and profit in a volatile market is a discipline that requires constant learning and practice.
1. Hot coins in a bull market fall the fastest.
Coins that are hotly speculated, especially those with severe manipulation, often burst their bubbles quickly. The more a coin attracts a large number of retail investors chasing after rising prices, the greater the risk. It's like inflating a balloon: the bigger it gets, the quicker it pops. Popular coins in a bull market are often favored by short-term speculators, but they are also the traps that can lead to significant losses.
Recommendation: Don't blindly chase after rising prices, especially for coins that have surged significantly in a short time. Stay calm to avoid becoming a 'bag holder.'
2. The strategies of altcoins are generally similar. The typical approach for altcoins is to first heavily dump, create panic, then gradually pump up, attracting retail investors, and finally switch methods to continue harvesting. This strategy has proven effective time and again, and newbies can easily fall victim. Recommendation: Be psychologically prepared for altcoins, don’t be misled by short-term price increases, and don’t easily over-invest.
3. Long-term market trend is upward. Although the crypto space experiences severe short-term fluctuations, if you extend the timeline, the overall trend is upward. The historical performance of mainstream coins like Bitcoin and Ethereum has proven this. Recommendation: If you are a long-term investor, don’t be frightened by short-term ups and downs; patiently hold quality assets, and time will reward you.
4. Coins with potential are often not hyped. Truly promising coins usually remain unnoticed at the bottom, rarely mentioned. Meanwhile, those that are crazily hyped are often tools used by manipulators to harvest. Low-key coins may quietly explode at some point. Recommendation: Pay more attention to projects with solid technology and reliable teams that have not yet been hotly speculated by the market; they may be the dark horses of the future.
5. Be cautious with newly listed coins. Coins newly listed on exchanges, especially those that experience dramatic rises and falls, are often traps set by manipulators. These coins typically lack actual value support and exist purely to cut leeks. Recommendation: Be wary of new coins, especially those that experience significant volatility in the early stages; do not enter easily.
6. Ups and downs are commonplace. It's normal for prices to drop after buying and rise after selling in the crypto space. The market is highly volatile, and short-term fluctuations do not fully reflect a project's value. Recommendation: Maintain a good mindset and don’t panic due to short-term volatility. Formulate your investment strategy and stick to it strictly.
7. The strongest rebounds do not represent potential. The coins that rebound the most aggressively are often not truly promising but are speculative plays that have been pumped. These coins usually lack fundamental support; they rise quickly and fall just as fast. Recommendation: Do not be misled by short-term surges; truly promising coins usually have more stable fluctuations and an upward long-term trend.
8. Be careful of getting cut during sudden pullbacks. If the coin you bought suddenly retraces after a rise, this may signal that manipulators are starting to sell. Manipulators typically raise prices to attract retail investors and then sell at high levels. Recommendation: When encountering sudden pullbacks, take profits or cut losses in a timely manner to avoid becoming a 'bag holder' for manipulators.
9. Coins that explode in the second half. In a bull market, coins that perform moderately in the early stages may explode in the second half, experiencing multiple-fold increases. These coins are like marathon runners, gathering strength in the early stages and exerting power in the later stages. Recommendation: Do not overlook those coins that performed mediocrely initially but have solid fundamentals; they may be the dark horses in the later part of a bull market.
10. Coins that have been consolidating for months may explode. In a bull market, some coins may consolidate for several months after experiencing several folds of increase. This consolidation usually indicates that manipulators are gathering strength, waiting for the next opportunity to explode. Recommendation: Keep an eye on coins that have been consolidating for a long time; they may be the stars of the next market wave.
In conclusion, the two key aspects of surviving in the crypto space.
If you feel confused or at a loss during operations, remember the following two points:
1. Strong action is necessary: Opportunities are fleeting; decisive actions are needed to seize them.
2. Stay online: Information in the crypto space changes rapidly, so timely access to the latest news and making responses is crucial. The crypto market is filled with challenges, but as long as you master these iron rules and maintain calm and rationality, you can find your opportunities in this market. Remember, investing is a marathon, not a sprint; patience and strategy are the keys to success!
Sharing practical tips for short-term trading in the crypto space!
Some may argue that short-term trading is mere speculation! First of all, let me clarify that short-term trading is not speculation. Real short-term trading involves mastering certain market operation rules and requires strong skills as an investment behavior. Short-term trading truly tests one's skills and patience. Those proficient in short-term trading must have seen many K-line charts, studied their trends, and summarized general rules.
Besides reflecting short, medium, and long-term fluctuations, the most macro point of K-line charts is that they can tell you which projects have good market value management and which projects falter after being dumped, purely cutting leeks. For example, we have mentioned multiple times that there are many forked coins of BTC, but in reality, aside from BCH, the K-lines of other forked coins are hard to analyze.
The K-lines of these forked coins have been on a downward slide since the upper hand began, showing almost no fluctuations—like sliding down a slide—giving no opportunity for retail investors to escape. From their K-line charts, it can be seen that manipulators no longer hold a large number of coins; these coins are concentrated in the hands of retail investors, so there is no one to pump the price, and they have basically become dead assets. Many retail investors trading these coins have gone from short-term trading to medium-term and then to long-term, eventually turning them into dead assets.
In addition to being able to read K-line charts, we also need to adhere to several key principles of short-term trading, the first being the principle of profit withdrawal: when buying a coin, if it gains over 10% after purchase, we must start implementing the principle of capital protection (if it subsequently drops to the purchase price, sell unconditionally immediately). If it gains around 20%, then we stipulate that this trade must earn at least 10% before selling, in order to maximize profits. When gaining 20%, we set rules that this time's earnings must not drop to only 10% before we sell, unless we are very certain of a technical peak; otherwise, we don’t sell.
Next is the principle of capital protection: When purchasing a certain coin, if it gradually loses 15% after purchase (this number varies by individual; many recommend 15% as the most suitable), then cut losses and exit. This is to stop losses in a timely manner; if it rises again later, that’s fine—after all, that time your entry point was incorrect, which was a wrong trade. Mistakes come with a price, and that price is the loss, which will help you remember not to chase after losses.
In short, short-term operations should adhere to some basic principles, especially noting that quick entry and exit does not mean frequent trading, chasing hot trends does not mean making blind choices, taking profits does not mean being timid, and holding cash does not mean staying away from the crypto space; trading points should not insist on the lowest or highest prices.
Some strategies or points to note for short-term investments:
1. Position Size: Don't make short-term positions too large, at most 10% of the total position, while the rest is put into long-term or used for averaging down. After all, long-term positions are the foundation of our profits.
2. Coin Types: Although it’s short-term trading, try not to touch coins you are unfamiliar with. Prioritize those you are familiar with and can understand. If it’s during a bear market, it’s recommended to only trade mainstream coins or even Bitcoin, as these coins will only temporarily result in losses and being stuck, whereas altcoins may result in permanent losses.
3. Time: Personally, I define short-term as within half a month or even a month. Unless you can constantly monitor the market or have relevant automated software, I do not recommend attempting short-term trading that lasts only a few hours. The specific short-term time frame depends on market trends, varying from a few days to around ten days.
4. Take profits and cut losses: I have found that significant losses in short-term trading often arise from not taking profits or cutting losses in a timely manner, so everyone should have a rough plan for taking profits and cutting losses when participating in short-term trading. This plan doesn’t have to be very detailed; having a rough direction is enough, and then adjust according to market changes.
In addition to sharing some tips for short-term trading, I have also summarized some tips for trading coins, hoping to assist all investors.
1. Familiarize yourself with various technical analyses of K-line charts.
2. Do not go all in or all out in a short period.
3. Set strict rules for yourself to take profits and cut losses in a timely manner.
4. Try not to operate during rapid price fluctuations.
5. Don’t put too much pressure on yourself; maintain a balanced mindset.
6. Don't look at too many other people's analyses; everyone has different opinions. Price trends are affected by numerous factors, and predictions about the future are often fifty-fifty, half right and half wrong. Just believe in yourself.
7. Overtrading can affect your health, but when a significant rise or drop occurs, you must use your wisdom to go long or short to make money.
Trading without reviewing is futile, even with a fortune. While there is time, I’ll share four iron rules, and only after understanding them can one trade coins to support a family!
Recently, the market has been unpredictable, and many opportunities are fleeting. "When soldiers come, block them; when water comes, dam it" is what a qualified crypto trader should possess. With ten years of trading experience, I've summarized six iron rules for the crypto space to share with everyone!
The only enemy on the road of trading coins is yourself.
Investing is indeed a high-threshold industry, but you only need a smartphone/computer, a phone number, and an ID card to enter the CEX crypto trading market. However, this does not mean you can make money. The cryptocurrency market is ultimately a market composed of people, where human greed, anger, ignorance, arrogance, and doubt are all vividly displayed.
01 About Gambling and Altcoins
Playing with altcoins is gambling; holding onto Bitcoin is the right path. This is a rather peculiar saying in the current market, and dollar-cost averaging into Bitcoin is strongly recommended by many experts. However, early successes of these big shots often involve altcoins or even CX coins.
Listening to experts advocating for dollar-cost averaging into Bitcoin, then starting to do so without understanding the rationale, is not that different from gambling.
It doesn't matter what type of coin it is; the essence of a gambling mentality lies in ignoring current trends and acting based on one's greed, fear, and hopes. For many, the crypto space is simply a big casino, just as many believe the A-shares market is a casino.
Viewing the market and the crypto space with this mindset means these people have no need to stay here; wouldn’t it be better to have some fun in Macau? Looking at the market with a gambler's eyes will undoubtedly lead to a tragic outcome. The moment you step into the market with a gambler's mentality, you are already ensnared by the web of karma; thus, a tragic conclusion is predetermined, no matter what you do.
Returning to Bitcoin and altcoins, there are always those who belittle the altcoin community. Without the early altcoin Ethereum, would Bitcoin have today's achievements? Bitcoin, as the pioneer, and later altcoins have a symbiotic relationship, not a competitive one. Bitcoin itself cannot fully unleash the potential of blockchain; it needs altcoins to extend and expand. Comparatively, for ordinary investors, quality altcoins are often a better choice because they have relatively higher odds.
But there is a basic fact: over the long term, the gains of altcoins that can outperform Bitcoin are rare. Of course, in any market and any era, only a small handful can become legends.
02 About Contracts and Technical Analysis
Like altcoins, contracts are also a double-edged sword; futures contracts in the crypto space are basically equivalent to a casino.
I had not previously encountered contracts, and the external narrative was that playing contracts was like giving away money for free, with numerous cases of complete financial ruin reported, leading to a huge misunderstanding of contracts. It wasn't until I started dealing with contracts at the beginning of this year that I realized they are a great tool.
The main criticism of contracts is liquidation, which depends solely on the individual. I only invest a small portion of my total capital in contracts, dividing the contract capital into 10 parts for operation, and setting stop losses every time I open a position. Although I haven’t made a profit, having played hundreds of times, I haven't faced liquidation. Most people engage in trading without a trading system; for instance, once a reverse market occurs, they have no stop-loss mechanism in place, instead fantasizing about an immediate reversal – if it doesn't crash, who will?
As a tool, contracts themselves are neither good nor bad; it depends on the user.
Since I got involved with contracts, I inevitably had to engage with technical analysis. Like everyone, I previously thought technical analysis was nonsense, just hindsight wisdom. However, it was only after I got involved that I realized it was not the case. Technical analysis is not about making predictions; that would be pseudoscience.
The essence of technical analysis:
Technical analysis is essentially a translator; there are too many factors influencing coin prices in the market. You may not know which factor carries the most weight, but all factors will form a definite result, which is the price. Technical analysis describes what has happened in the market through price; this is the value of technical analysis, a language that people can understand.
The biggest change brought to me by technical analysis is knowing how to mitigate risks. For example, I recently bought an IEO coin that surged nearly 8 times. In the past, I would either panic and sell halfway through, losing significant later profits, or hold on and get stuck after reaching the peak; now this coin has dropped by half. This time, using a simple long-short moving average system, I found that this coin had shifted from a bullish market to a bearish market on a larger timeframe, indicating a high risk of decline, so I sold in time and preserved the vast majority of my profits.
People are easily influenced by external voices and tend to reject or favor something they have never understood; this is a flaw that must be corrected.
03 On Greed and Fear
Rejoicing in external gains, lamenting personal losses. When prices rise, it’s a revolution; when they fall, it’s a scam. Emotions are always the biggest obstacle on your investment journey because they disrupt all your plans. In fact, many people have trading plans; they sell promptly when their planned selling point arises and buy when their planned buying point appears. However, the addition of emotions often leads to the opposite outcome.
For example, during the crash on March 12, many people said their trading systems had already signaled sell signals before March 12, but due to the market's fervor and infinite expectations for Bitcoin's halving at that time, they did not want to miss out on the halving's big trend. Greed completely took over, and March 12 became the biggest retribution; infinite joy turned into infinite sorrow.
There are no trends worth fearing or being overly joyful about. If you still feel fear or joy towards any trend, it indicates that you are still being controlled by emotions, and you should continue to refine yourself in the current trend, letting all this fear and joy dissipate.
How to eliminate greed and fear? The most common method is through continuous market testing. Here I have a better and more convenient method—Zen's koan practice.
I consider myself a half-hearted Zen enthusiast, meditating daily while pondering the koan 'Who is chanting the Buddha's name?' but internally questioning and contemplating exactly who is chanting the Buddha's name. This is the essence of koan practice; this method can also be applied to various thoughts, such as 'Who is instigating greed?' and then chasing down that thought. You will quickly have a question: Where did this thought originate? In fact, at this point, the greed of the moment has already vanished.
The same logic applies to 'Who is in fear?' and 'Who is happy?' etc.
04 Summary
People are easily disturbed by external factors, leading to an inexplicable rejection or preference for something they have never understood. Emotionally, they can easily develop biases towards K-line fluctuations, while the true voice of the market is always in the present.
Investing is very similar to cultivation; each person uses their own methods to hone their character and pierce through the layers of fog to comprehend the truth. Investing is a path of cultivation, and on this path, your only enemy is yourself.
Still the same: if you don't know what to do in a bull market, click on my avatar, follow me, for free sharing of bull market spot planning and contract strategies.
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