With three thousand, it’s suggested to roll positions. Before doing so, first understand what rolling positions means. For example, if you only have 50,000, how to start with 50,000? First, this 50,000 must be your profit. If you are still at a loss, don’t look at it.
If you open a position in Bitcoin at 10,000 with 10 times leverage, using a margin of only 5,000 (which is 10% of the total position), that actually equals 1 times leverage with a 2% stop loss. If you hit your stop loss, you only lose 2%, which is just 200. How do people go bankrupt with a 10,000 position? Even if you go bankrupt, wouldn’t it just be a loss of 5,000? How could it all be lost?
If you're right, and Bitcoin rises to 11,000, you continue to open 10% of your total funds, also set a 2% stop loss. If you hit the stop loss, you still profit by 8%. What about risk? Isn’t the risk very high?
Rolling positions sounds scary, but if you put it another way, it’s just adding to your position with unrealized profits. This way of saying it is much better; adding to your position with unrealized profits is just a common method in futures trading. You don’t need to maintain 5 or 10 times leverage, just two or three times is enough. The goal is to maintain a total position of two or three times with unrealized profits. Trading Bitcoin should be relatively safe, right?
You need to have enough patience; time is your friend. The profits from rolling positions can be huge. As long as you can roll successfully a few times, you can earn at least tens of millions or even hundreds of millions. Therefore, you cannot roll easily; you need to find high certainty opportunities: high certainty opportunities refer to a situation where after a sharp decline, the price consolidates and tests the bottom several times before breaking upward. At this point, the probability of following the trend is very high.
To earn 1 million, you only need to invest 50,000, and this 50,000 can also be done without risk. You can first invest 100,000, wait for an opportunity when the market kills the retail investors, enter and buy the spot to earn a profit of 100,000, then use 50,000 from the 100,000 profits to bet. To make a lot of money, you must take risks. When good opportunities arise, roll positions, using two or three times leverage once or twice to roll out.
Gambled away 50,000 in profits, then invested another 50,000 to gamble. If all profits are lost, stop and continue to use 100,000 in capital to earn profits to gamble.
Easier said than done, but it requires unimaginable patience. Such a model allows you to exist in the cryptocurrency market with the potential for sudden wealth without bearing the risk of catastrophic losses. Don't trust any national cryptocurrency; without sufficient off-exchange earning ability, surrounding the cryptocurrency is just deceiving retail investors. If someone has 100 BTC and you only have a few BTC, isn’t that ridiculous? The volatility of BTC has significantly decreased; you must use leverage to have the potential for sudden wealth. Those who surrounded cryptocurrencies two years ago have just returned to break even, and dollar-cost averaging won't yield several times returns at the peak of a bull market.
Why can experts make profits? What preparations do they make for trading?
Before placing an order:
1. Does it align with the current trend?
2. Is there a K-line pattern support?
3. Have you analyzed the Bollinger Bands oscillation indicator?
4. Is the planned order size too large?
5. Have you set a stop-loss price?
6. Have you planned the level to increase your position (in case of unrealized profits)?
7. Have you set a take-profit price?
8. Place Order.
After placing an order:
1. When reaching the stop-loss level, strictly enforce the stop-loss price, regardless of whether the position turns out right or wrong later.
2. After closing a losing position, never reverse your position; adjust your mindset before analyzing re-entry.
3. After failing to add to a winning position, strictly adhere to the principle of 'not leaving until earning 10,000, and leaving when earning the last cent'; 4. After making a huge profit when closing a position, avoid immediately entering the market again; analyze and enter after calming down from the joy.
Three minutes to help you understand the king of technical indicators—MACD.
In recent days, many within the community have mentioned that the current market is in a volatile state. How can one 'foresee the future' in order to adjust positions in advance? Today, I will introduce the king of technical indicators in the secondary market of cryptocurrencies—MACD. Those who have traded stocks will not be too unfamiliar with technical indicators because these indicators can help determine market trends and follow the cyclical changes in trends for trading decisions in stocks and all financial derivatives. However, the cryptocurrency market is different from the stock market. The maximum daily increase in the stock market is just a few percent, but in the cryptocurrency market, the minimum is also a few percent, and it’s normal to see it halved several times or doubled several times in a day. For those who haven’t entered the cryptocurrency circle, do you think I’m joking? Isn’t this gambling? To tell you the truth, the current cryptocurrency market is gambling, but besides luck, isn’t there also skill in gambling? Yes, and it's the same in the cryptocurrency market. Aside from luck, one can only find consolation through data, information, and various K-line technical indicators. Well, no more nonsense; in this article, I will explain the meaning of the king of technical indicators, MACD, and its basic usage methods and techniques.
Before learning, let’s first understand the benefits of studying MACD indicator analysis:
1. After learning, do not entrust investment strategies to others; take control of your own destiny.
2. Universally applicable in global financial derivatives; learn one skill to excel in the financial circle.
Experts can have the short-term 'predictive ability' for the future.
(PS: But remember, regardless of which market, indicators can only be an auxiliary tool, not the absolute truth for decision-making.)
In this article, I will interpret several aspects for you:
1 What is MACD
2 Using Practical Examples to Explain the Application of Golden Cross and Death Cross
3 Top Divergence and Bottom Divergence
4 Explanation of Trading Terminology in the Cryptocurrency Market
5 Teacher's views on MACD
NO.1 What is MACD
MACD stands for Moving Average Convergence Divergence, which is a technical indicator generated after a series of sophisticated processes on the closing prices of stocks using the principle of moving averages. It is usually used to predict trends and judge buy/sell points, making it the most frequently used technical indicator in investment analysis, hence earning the title of 'King of Indicators.'
Composition of MACD:
MACD
MACD is mainly composed of two intertwined curves (yellow and white) and the red-green bars in the middle. The white line is called DIF, also known as the daily divergence; it is the smoothed average price of the short-term 12-day moving average minus the smoothed average price of the long-term 26-day moving average. The yellow line is called DEA (some exchanges use red), also known as the average divergence, which is the smoothed average price of the daily divergence over 9 days. The red-green bars are called bar charts, reflecting the distance between the DIF and DEA lines. The combination of these three is what is referred to as MACD. The white line in the middle is called the zero line, which is the dividing line between the bulls and bears in the market. Investors can use the intersection, divergence, breakout, support, and resistance of the three lines and one axis to judge trends and price direction.
NO.2 Using Practical Examples to Explain the Application of Golden Cross and Death Cross
(I) Golden Cross
Golden Cross
A MACD golden cross is formed when the DIF line (white line) crosses above the DEA line (yellow line) and both are moving upward. At this point, the bulls are in control, and the MACD golden cross is a good buying signal for the medium to long term. However, if it occurs while both the DIF line and DEA line are below the zero line, it indicates that although the bulls are currently in control, caution should be exercised for a potential rebound.
(II) Death Cross
Death Cross
The MACD death cross occurs when the DEA line (yellow line) crosses down through the DIF line (white line), with the DIF being lower than the DEA and moving downward. At this point, the bears are in control, and the MACD death cross is a good selling signal for the medium to long term. If the death cross occurs above the zero line, there are two possibilities: a temporary pullback followed by continued upward movement, or the beginning of a major correction.
NO.3 Top Divergence and Bottom Divergence
Divergence literally means deviating from the original or normal track. In the cryptocurrency market, it refers to a situation where the price is in an upward or downward trend, but the technical indicators are moving down or up, meaning the technical indicators do not follow the price changes, which is called divergence.
Essentially, this is due to certain reasons causing price and indicators to show different trends, resulting in indicators being unable to synchronize with price.
Divergence is divided into two types: top divergence and bottom divergence.
Top divergence refers to the price continuously rising while the MACD technical indicator shows a pattern composed of red bars where each peak is lower than the previous one. This is called top divergence, indicating that the bears’ strength is increasing and is a good signal to exit at the top.
Bottom divergence refers to a situation where the price is continuously declining, but the MACD technical indicator’s DIF line is declining less than the price, or even rising, which is called bottom divergence. At this time, the bulls’ strength is increasing, making it a good signal to buy the dip.
(PS: The DEA line will be more accurate, but it requires a longer period, and the process is slower.)
NO.4 Terminology Explanation in Cryptocurrency Trading
There are many terms in the cryptocurrency circle. If you don’t understand what they mean, even if others give you the operating details, you won’t understand, so it’s important to know these terms. The teacher has picked some practical ones to share with you.
Pending Orders
2, Spot Trading
It refers to the trading method where payment and delivery are made simultaneously, or adopting a barter trading method.
Futures Trading 3,
Refers to an advanced trading method developed based on spot trading and modeled after forward contracts.
4, Hedging
Refers to simultaneously executing two trades that are related to the market, with opposite directions and equal amounts, offsetting profits and losses.
5, Good News
Refers to news that brings mainstream media attention to a specific coin or its developers, or related investors and partners, or breakthroughs in certain technology applications that stimulate price increases, all of which are referred to as good news.
6, Bad News
News that prompts the coin price to drop, such as national control, central bank suppression, or technical issues in the market.
7, Trading Volume
Reflects the quantity of transactions and the number of buyers and sellers. A stock is measured by transaction volume and transaction value.
8, Arbitrage
Recharge cash to platform A where the coin price is lower, then buy BTC/ETH; then withdraw BTC/ETH from platform A, and after receiving it, immediately recharge to platform B where the price is higher; after recharging BTC/ETH to platform B, sell it immediately, withdraw the cash received immediately, and repeat the steps.
9, Leverage Trading
As the name suggests, it involves using a small amount of capital to conduct investments several times the original amount, hoping to achieve several times the return on investment or incur losses.
10, Closing Position
Refers to a futures trader buying or selling futures contracts with the same variety code, quantity, and delivery month as their held futures contracts, but in the opposite direction to close the position.
11, Double Spending
In simple terms, it refers to double spending. If a user attempts to perform two payment operations with the same electronic currency asset, this is double spending. In cryptocurrency trading, the payer may attempt double spending, and if the payee does not wait for enough transaction confirmations (typically 6), the transaction may be recognized, leading to a double-spending attack and resulting in losses.
12, Position
Refers to the ratio of actual investment to actual funds.
13, Full Position
Invest all funds to buy virtual currency.
14, Reducing Position
Sell part of the virtual currency but not all of it.
15, Heavy Position
Available funds compared to virtual currency show that the share of virtual currency is large.
16, Light Position
Available funds compared to virtual currency show that the share of available funds is large.
17, Empty Position
Sell all the virtual currency held, converting it entirely into cash.
18, Take Profit
After obtaining certain profits, sell the held virtual currency to secure profits.
19, Stop Loss
After incurring a certain degree of loss, sell the held virtual currency to prevent further losses.
20, Bull Market
The price continues to rise, and the outlook is optimistic.
21, Bear Market
The price continues to decline, and the outlook is bleak.
22, Bullish (Going Long)
Buyers believe that the coin price will rise in the future, buying coins and waiting to sell at a high price for profit after the price rises.
23, Bearish (Going Short)
Sellers believe that the coin price will drop in the future and sell the coins they hold (or borrow coins from the trading platform), waiting to buy back at a lower price for profit after the price declines.
24, Position Building
Buy virtual currency.
25, Averaging Down
Buy virtual currency in batches, such as first buying 1 BTC, then buying another 1 BTC.
26, Full Position
Invest all funds in one go to buy virtual currency.
27, Rebound
When the coin price drops, it may rebound due to a rapid decline.
28, Consolidation (Sideways Market)
Price fluctuations are small, and the coin price is stable.
29, Downtrend
The coin price slowly declines.
30, Plunge (Waterfall)
The coin price drops rapidly with a large amplitude.
31, Cutting Losses
After buying virtual currency, if the price drops, sell the virtual currency to prevent losses from expanding.
32, Trapped
Expecting the coin price to rise, but after buying, the price drops; or expecting the price to drop, but after selling, the price rises.
33, Unwinding
After buying virtual currency, a temporary paper loss occurs due to a price drop, but the price later rebounds, turning losses into profits.
34, Missed Opportunity
After selling virtual currency due to a pessimistic outlook, the price rises all the way, and failing to buy back in time results in lost profits.
35, Overbought
The coin price continues to rise to a certain height, and the buying power is basically exhausted, about to decline.
36, Oversold
When the coin price continues to decline to a certain low point, the selling pressure is basically exhausted, and the price is about to rise.
37, Inducing Long
The coin price has been consolidating for a long time, and the possibility of a decline is relatively high. Most bears have sold their virtual currencies, and suddenly the bears drive the price up, inducing the bulls to think the price will rise and buy in, resulting in the bears suppressing the price and trapping the bulls.
38, Inducing Short Selling
Bulls buy virtual currency and then deliberately suppress the price, making the bears believe that the price will drop, causing them to sell off, leading them to fall into the bulls' trap.
NO.5 Views on MACD
The MACD indicator has been tested by historical trends and is relatively the most effective technical indicator, also the most widely used. It has a good application effect in grasping trending markets, among which top divergence and bottom divergence are recognized as relatively the most effective methods for buying the dip and selling at the top.
1, The golden cross in the 15-minute chart can predict the trend for half a day.
2, The golden cross and death cross in the 30-minute chart can predict the trend for one day.
3. The golden cross in the 60-minute chart can predict the trend for two days.
Using minute K-line charts to select buy and sell points is much more precise than daily charts; the smaller the selected period, the more accurate the buy and sell price levels.
5. Every indicator has its limitations and lag; it's best to combine multiple indicators and consider the broader information environment, especially since the cryptocurrency market involves factors controlled by large players, making it relatively more complex.
6, In the minute chart, the red volume bar means that the volume during this minute has pushed the price up, which can be understood as the buying volume.
In the minute chart, the green volume bar means that the volume during this minute has pushed the price down, meaning it's the selling volume.
In the minute chart, the white volume bar means that during this minute, the stock price did not fluctuate, meaning that the trading volume did not affect the price fluctuations, hence it is white.
As I said, if you don’t know what to do in a bull market, click on my profile, follow me, for planning in the bull market, contract passwords, and free sharing.
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