I know an elder who invested 100,000 yuan in the cryptocurrency circle, and now it's worth 42 million. He once told me something that made me ponder deeply. He said, 'In this market, everyone is a group of ordinary people. You just need to control your emotions, and this market will be a cash machine!'
In the cryptocurrency circle, the trading strategy is your 'secret weapon.' The following sayings are the crystallization of practical experience; be sure to collect them!
Entry Section: Test the waters in the cryptocurrency circle, prepare to proceed; enter steadily, refuse to rush.
Flat Section: Buy low during flat periods; heavy positions for bottom fishing are timely; sell decisively at high levels during upward fluctuations, do not hesitate.
Volatility Section: Sell at highs, quickly enter during sharp declines; observe during flat periods to reduce trading. Flat periods mean replacing declines; hold your chips tightly, a rise may be just a second away; during rapid rises, be alert for sharp declines, always ready to secure profits; a slow decline is a good time for gradual accumulation.
Timing the Market Section: Don’t sell at highs; don’t buy at lows; avoid trading during flat periods. Buy on bearish lines, sell on bullish lines, operate counter-trend to stand out, buy during morning dips, sell during morning surges; don’t chase highs in the afternoon, buy on the next day after an afternoon drop; don’t cut losses during morning dips; if the market is stable, rest; accumulate to seek breakeven, and avoid excessive greed.
Risk Awareness Section: Calm lakes can have high waves; there may be big waves to follow; after a big surge, there must be a pullback; K-lines may present a triangle for several days. In an upward trend, look for support; in a downward trend, look for resistance. Trading with a full position is a major taboo, and stubbornness is not advisable; in the face of uncertainty, know when to stop, and seize the timing to enter and exit.
Trading with a mindset of trading is actually a mindset of trading. Greed and fear are major enemies; chasing after rising prices and killing falling prices requires caution, and only a calm mind can bring freedom.
In addition to the sayings, I have also organized several extremely practical trading methods that can benefit both novice beginners and experienced players.
Oscillation Trading Method: Most markets are in an oscillating pattern, using high sell and low buy within the range is the foundation for stable profits. Use the BOLL indicator and box theory, combined with technical indicators and patterns to pinpoint resistance and support. Follow short-term buying and selling principles, and avoid greed.
Breakthrough Trading Method: After a long period of consolidation, the market will choose a direction. Entering after a breakout can yield quick profits, but precise breakout identification is required.
Unilateral Trend Trading Method: After the market breaks through the range, a unilateral trend will form. Trading in the direction of the trend is key to making profits. Enter positions during pullbacks or rebounds, referring to candlesticks, moving averages, BOLL, trend lines, etc., and only with proficient use can you navigate easily.
Resistance and Support Trading Method: When the market encounters key resistance or support levels, it often gets blocked or supported. Entering at this time is a commonly used strategy to utilize trend lines, moving averages, Bollinger Bands, parabolic indicators, etc., to accurately judge resistance and support levels.
Pullback Rebound Trading Method: After significant rises and falls, there will be temporary pullbacks or rebounds. Seize the opportunity for easy profits, primarily based on candlestick patterns; a good market feel will help you accurately grasp high and low points.
Time Period Trading Method: Morning and afternoon sessions have small fluctuations, suitable for conservative investors. Although the time for placing orders and making profits is long, the advantage is that the market is easier to grasp; evening and midnight sessions have large fluctuations, suitable for aggressive investors, able to gain quick profits but with high difficulty, requiring strict technical and judgment ability.
7 Habits of Highly Profitable Traders
1. Discipline is Key: Adhere to your trading plan.
A clear trading plan is the foundation of any successful trading strategy. Profitable traders understand the importance of discipline and avoid making hasty impulsive decisions due to emotions or external influences. They have clear entry and exit criteria, risk management strategies, and position sizing rules, and consistently adhere to these rules.
2. Risk Management: Protect your capital.
One of the fundamental principles of trading is to protect your capital at all costs. Profitable traders are aware that protecting trading funds is crucial for long-term success. They employ strict risk management strategies, such as setting stop-loss orders and managing position sizes, to limit potential losses and ensure they can continue trading in the market.
3. Master the Art of Patience.
In the fast-paced trading world, patience is a virtue that separates the elite from the mediocre. Profitable traders understand that chasing every potential opportunity can lead to disaster. Instead, they practice patience, waiting for suitable trading opportunities that align with their strategies and risk tolerance, avoiding the temptation of quick profits, as the pursuit of 'get-rich-quick' can ultimately lead to losses.
4. Continuous Learning: Stay Ahead.
The market changes rapidly, and successful traders recognize the importance of continuous learning to maintain an edge. They actively seek educational resources, understand market trends and economic data, and continually refine their trading strategies based on new insights and information.
5. Emotional Control: Stay Calm.
Trading is inherently an emotional activity, and the ability to manage emotions is a key trait of profitable traders. They understand the dangers of fear and greed, which can lead to impulsive actions and poor decisions. Instead, they cultivate emotional control, making rational decisions based on their trading plans and market analysis rather than being swayed by emotions.
6. Learn From Mistakes: Every Trade is a Learning Opportunity.
Even the most successful traders experience losses, but what sets them apart is their ability to learn from mistakes. They carefully analyze each profitable and losing trade, identify areas for improvement, and refine their trading strategies accordingly. Every trade is an opportunity for learning and growth, and profitable traders embrace this mindset.
7. Engage Socially: Share Knowledge and Strategies.
Trading can be a lonely pursuit, but profitable traders understand the value of building social connections. They actively seek like-minded individuals to share knowledge, strategies, and experiences. This collaborative approach fosters growth, provides diverse perspectives, and creates a context that is invaluable for navigating the challenges of the trading world.
Warren Buffett has a famous saying: 'You only need to be rich once.'
In the cryptocurrency circle, the reason I can seize big bull runs every time and steadily profit in spot and contract trading is due to these 7 methods that can increase the win rate by 60% (turning point trading). Once mastered, you will navigate the cryptocurrency market like a fish in water; the market will be your 'cash machine'!
Turning point trading is one of the most effective trading methods.
Unlike trend trading, it focuses on discovering signals of trend exhaustion, identifying potential turning points in advance, thus increasing the likelihood of capturing a new round of trend.
The reliability of turning point trading lies in the fact that if you can correctly identify a turning point, even if you do not enter the market at the first opportunity, you can still achieve a good trading price, greatly reducing operational risk.
So, how can we correctly identify turning points?
1. Normal Uptrends/Downtrends
Normal uptrends/downtrends are one of the most commonly used trading methods in classic Dow Theory.
According to Dow Theory, if the lows in a market continuously rise, it is an uptrend. If the highs also continue to rise, it is an even more effective signal; conversely, it indicates a downtrend.
If during this process, the highs and lows do not continuously create new highs/new lows, it indicates that the uptrend/downtrend has ended and is likely a signal of trend reversal. The previous low or high may well be a turning point.
2. Three-Line Reversal
The three-line reversal is a method proposed by trading master Conflass. It is very similar to normal trends but can identify turning points earlier.
According to the definition of three-line reversal, if the closing prices and opening prices of three consecutive candlesticks (or more) keep rising, the lowest price of the earliest candlestick among the last three candlesticks is set as the previous low. If the following candlestick directly breaks through this price, it confirms the top turning point.
In actual trading, it is common for three consecutive candlesticks to rise, followed by a candlestick that quickly declines; however, for a valid three-line reversal, it must be a candlestick breaking through the preset low. (Invalid three-line reversal)
(Valid three-line reversal)
In addition to the main driving force, it is usually related to data trends and black swan events, especially key market expectations and data, which may allow the market to easily break through key resistance and support levels.
It is worth mentioning that if there is a change in the body shape during the formation of a three-line reversal, it is often a more effective signal.
For example, in the figure below, if the peak is a small bullish line without shadows, and if a subsequent large bearish line simultaneously breaks through three candlesticks, it is a more effective three-line reversal pattern.
3. Long Doji Star Turning Point
The doji star is a very important candlestick for predicting top and bottom signals. However, this does not mean that the appearance of a long doji star necessarily indicates the emergence of a turning point.
Generally speaking, the appearance of a long doji star indicates that the market maker has shown signs of offloading. However, before completing the offloading, the market may not necessarily continue to decline and may even create a false impression of a decline through partial offloading, followed by a rebound in the market.
There are two scenarios for a long doji star.
The first scenario is shown in the figure below. If a doji star is followed by a small bullish line, do not immediately short, but observe if there are signs of further increases, as this may instead be a continuation signal.
The second scenario is if a large bearish line appears after a doji star, or if a bearish line is formed near the end of the doji's lower shadow, or even if a gap down bearish line forms. In this case, the position of the doji star is a clear turning point.
Generally, the doji star itself carries the nature of choosing a direction. When a doji star appears at a relative peak, combined with key data and news, it greatly increases the accuracy of predicting the doji star.
4. Large Bearish and Bullish Lines
Generally, large bearish or bullish lines are often signs of strong market action and are likely to be breakout signals.
However, in actual trading, there are often buying peaks or selling peaks. Taking a large bullish line as an example, if the market has been rising for quite a long time, but suddenly a large bullish line appears at the peak position.
This could be a breakout signal, but it is more likely that the bulls' chips are nearing exhaustion, so they quickly used up their chips for the last pull-up, attracting follow-up buying to push up for offloading, making the top of this large bullish line a turning point.
To determine whether a large bullish or bearish line is a buying peak or a selling peak, focus mainly on the next 2-3 candlesticks.
Generally, if a large bullish line is followed by 1-2 candlesticks that engulf the large bullish line 213 or even all of it, it can basically be confirmed as a signal of a market peak.
If 1-2 candlesticks only engulf 1/3 of the large bullish line or less than 113, then pay attention to whether the lower support level is reliable, which means the market maker has not completed offloading, and the market may maintain a high-level consolidation or even show a slight rebound. In this case, entering the market is not recommended, as the probabilities of moving up or down are very high.
If after a large bullish line appears, a series of small bearish and bullish lines form slightly above the high of the large bullish line, and the support near the high of the large bullish line is confirmed, then it is confirmed as an effective breakout, typically stabilizing afterwards, with the potential to continue rising. Therefore, the top of this large bullish line cannot constitute a turning point.
5. Moving Averages
Moving averages reflect the average price level of the market. Generally, the market will oscillate around the moving averages, which is also the principle behind many smoothing indicators.
Therefore, if a market continuously operates above the moving average or even significantly deviates from it, it indicates that the overall market is bullish. Once the market falls below the moving average, a corrective turning point is likely to occur. Thus, when breaking through key support levels, one can consider entering the market.
Moving averages can also be analyzed through combinations of moving averages.
Similar to how we use golden crosses and death crosses for judgment, we can utilize a combination of short-term and long-term moving averages. Generally, if the short-term moving average continuously runs above the long-term moving average, when a death cross forms and the candlestick is pressured below both moving averages, it is an effective selling signal.
It is important to note that golden and death crosses can also have false signals. If a golden cross and death cross form simultaneously, and the candlestick fails to cooperate by moving strong or weak, it is a signal that needs attention and is likely a continuation signal.
Generally, if a short-term and long-term moving average combination forms a golden cross or death cross, and there is news to support it, it is often an effective signal.
6. Double Top / Head and Shoulders Top
Double tops and head and shoulders tops are also very classic patterns for identifying turning points.
If after a period of rising, the market begins to decline, tests a price level, then rebounds again to slightly below the first peak position, but subsequently declines again and breaks through the previous support level, that is a typical double top pattern.
If after the rebound, a new high is created, but then declines again to test the support level, and then rebounds again to a slightly lower position before falling back and breaking through the support level again, this is a head and shoulders top.
Double tops and head and shoulders tops are not difficult to understand, but the height of each top hides other price signals.
First is the double top pattern. In a standard double top pattern, the right top should be level with the left side and the highest point should be lower than the left side.
However, if the right top is obviously higher than the left side, it is likely to become a head and shoulders top or even a continuation pattern, so caution must be exercised.
The head and shoulders top is slightly more complex than the double top, but the principle is not much different.
In a standard head and shoulders top, the right shoulder and left shoulder should be level, or preferably slightly lower than the left shoulder.
Additionally, when using the head and shoulders top, it is best to analyze it in conjunction with trading volume. Generally, the trading volume at the left shoulder is the largest, followed by the head, and the right shoulder has the least. This indicates that the market's driving force is gradually weakening, and once there is a lack of chips, a downward trend will often occur.
In the analysis of head and shoulders tops and double tops, the position of the neckline is crucial. Generally, breaking through the neckline usually means trend confirmation. However, in some extreme cases, some markets may quickly pull back from below the neckline, breaking through the neckline and then rising again. Therefore, we can adopt a phased entry strategy.
When the market breaks through the neckline and pulls back to test the neckline resistance, if the neckline resistance is significant, then one can consider adding positions.
7. Position Distribution
In addition to the technical analysis above, position distribution is also a commonly used method for finding turning points.
Generally speaking, if there are too many open orders in the market, it will form very strong resistance and support. As active buy and sell orders cannot absorb the market's pending orders, they often sell off their orders, leading to a reverse market movement.
The above are several commonly used trading methods for finding turning points. In actual trading, based on turning point analysis, one can better grasp changes in market sentiment, whether capturing market movements or exiting positions, which is of significant help.
The ten iron rules of the cryptocurrency circle, remember them well, newcomers.
1. Popular coins in a bull market decline the fastest. Those coins that are heavily speculated and have severe control will burst quickly. The more people chase them, the more dangerous it is. Like blowing up a balloon, once it's inflated, it will inevitably burst.
2. The tricks of altcoins are generally similar. The typical approach is to first slam down, then slowly pull up, and continue to harvest in different ways. This is how altcoin trading works; be mentally prepared.
3. The market has a long-term upward trend. If you look at it over a long period, the curve of the cryptocurrency market is relatively stable. Short-term fluctuations are normal, while the long-term trend is generally a gradual rise.
4. Coins with potential are not being speculated. Truly promising coins are often quietly unnoticed at the bottom, with few people mentioning them. Instead, those low-key coins quietly rise, like C98 and LEVER.
5. Be cautious of newly listed coins. Newly listed coins that experience violent rises and falls should not be touched; this is essentially a trap designed by market makers, and entering means getting cut.
6. Price fluctuations are common. Buying will lead to declines, selling will lead to rises; this is too normal in the cryptocurrency circle. If you can't withstand this volatility, you really need to practice.
7. The most intense rebound does not represent potential. The coins that rebound the most are often not the ones with potential, but rather speculative plays that have been hyped up. Don’t be misled by appearances; truly promising coins have more stable fluctuations.
8. Be careful of getting cut after sudden pullbacks. If you buy a coin and it rises, then suddenly pulls back, it may mean the market maker is starting to offload. Be careful not to get harmed.
9. Coins that explode in the second half of a bull market. Coins that perform poorly in the early stages may explode in the second half, like marathon runners who exert effort in the latter stages.
10. Coins that have been flat for months may explode. Some coins may experience several times the increase and still remain flat for months, indicating they are likely waiting for the next wave of explosion. You need to keep a close watch on these coins. If your operations are not smooth and you feel lost, remember two things: first, act quickly and decisively; second, stay online and react promptly to incoming news!
In the cryptocurrency circle, it's essentially a battle between retail investors and market makers. If you don't have exceptionally strong professional skills, you can only be cut! If you want to collaborate on strategies and harvest from the market makers, join (Public: Liang Ge's Crypto Diary). Welcome like-minded individuals in the crypto circle to discuss together~
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