Not choosing a financial major in college is one of the biggest regrets in my life. I started to learn about stocks/finance/foreign exchange, etc. from the Internet when I was in college. The red and green screens were full of life, which fascinated me. Under the infinite longing for the market, I opened an account ignorantly in my sophomore year, and later slowly learned about the currency circle, the things about Bitcoin, and then through the introduction of a classmate, I learned more and more, and I felt very interested and started my investment career from then on.
Like most friends who have just entered the market, at the beginning, they will be fascinated by technical indicators, constantly using currencies to do retrospectives and find patterns; they are keen on entering low-priced currencies, or currencies with large retracements, thinking that their safety is higher. In fact, these are completely wrong understandings of the market.
I only understood later that if you want to get returns quickly in the market, you must do short-term trading. Mid-to-long-term compounding, cooperate together!
The summary is: don't be blinded by the blood of profit, you must know that the most difficult thing in the world is how to continue to profit, you must carefully review, whether it is luck or strength, a stable trading system that suits you is the king of continuous profit.
A sentence impressed me deeply: if you don't occupy ideology, others will occupy it.
Today, the coin speculation secrets I share with you are the essence of my long-term stability in the market. If you study hard, you will definitely gain a lot and your understanding of coin speculation will undergo earth-shaking changes!
I believe that many people will encounter a problem when trading: the cycle is not well grasped.
For example, I am used to doing one-hour charts, but when the one-hour chart does not have room for profit, I want to go to the five-minute chart to find opportunities. Jumping from a large cycle to a small cycle, I am still used to placing orders according to the previous position size. At this time, a problem will occur: small profits and big losses. And I will not control the position, and I do not know how many positions I should place each time.
Then today we will learn how to calculate the size of the position, and how to use and obtain the free calculator.
1. The conversion of the trading cycle is prone to small profits and big losses
Why does the profit-loss ratio remain the same, but you earn less in the five-minute chart than in the one-hour chart? Let's use Figure 1 as an example.
Figure 1
On the one-hour chart, we can eat more than 400 points with a profit-loss ratio of 1:2, but on the five-minute chart in Figure 2.
Figure 2
We can only eat 153 points. Under the same position, the money earned in the five-minute chart and the one-hour chart is different. If you switch from a one-hour chart to a five-minute chart, there will be small profits and big losses.
2. Position Management
Many people know nothing about position management except for the profit-loss ratio. For example, if you go long at the position in Figure 3, the profit-loss ratio is 2.41. Apart from using TradingView's tools to derive the profit-loss ratio, there is nothing else you can do.
Figure 3
Some people pull the position to the maximum for each transaction, and place as much money as they have in their account. They cannot clearly locate how much position they should place each time, and they do not know how many times the leverage should be opened. They do not even know what it means to determine the position based on the stop loss.
So for ease of use, I made a calculator myself, as shown in Figure 4.
Figure 4
How to obtain and use this calculator will be explained later.
In fact, we trade to eat volatility points. If we are doing daily-level low-leverage contracts, if we do not control the position well, it will lead to a lot of losses.
The positions placed on the daily chart and the one-hour chart are different. Let's compare them. Suppose you are only willing to lose 1000 US dollars at most each time.
Daily chart:
As shown in Figure 5, the percentage of stop loss on the daily chart is 7.52%, and the take profit is nearly 30%.
Figure 5
One-hour chart: In the one-hour chart in Figure 6, the profit-loss ratio is set at 1:2.
Figure 6
At this time, the stop loss ratio is 1.22%, and the take profit will stop if it rises to 2.55%.
Five-minute chart:
Then, under the same conditions in the five-minute chart, my profit-loss ratio will be like this in Figure 7.
Figure 7
The stop loss is only 0.45%, and the take profit is 1.06%.
Then, comparing these three cycles, do you still think that the same position can be opened in different cycles? Of course not. Because we are eating volatility. The profit-loss ratio of each cycle is the same, but the size of the volatility is different. Therefore, when the expected loss and return are the same, our position should be inversely proportional to the volatility.
3. Use and Description of the Calculator
For ease of use, I have made a calculator to calculate the size of the position. You can use the calculator in Figure 8 before entering the market.
Figure 8
For all transactions, you must first think about how much money you are prepared to lose. The "expected loss" in the calculator is the risk control ratio, and the position risk adopts a fixed percentage mode.
Only the numbers corresponding to the yellow box need to be filled in the calculator, and the other numbers will be calculated automatically as the entered numbers change. Do not manually change any numbers other than those corresponding to the yellow box.
For example, if I have 1000 US dollars in my account, and I am only willing to lose 5% each time, then I need to lose 20 consecutive times to lose all the money. Then multiply the risk ratio by the current account balance (5%*1000), and the result is the number that should be filled in the "expected loss" space (50).
Five-minute chart:
Let's use the 5-minute chart in Figure 9 as an example, and now we want to go long at the market price.
Figure 9
Then, as shown in the figure, the stop loss ratio is 0.19, the take profit is 0.31, and the profit-loss ratio is 1.66. From the perspective of the profit-loss ratio, this transaction can be done. So fill in the corresponding numbers in our calculator, as shown in Figure 10.
Figure 10
Fill in 0.19 for the stop loss ratio and 50 for the expected loss, and you can calculate that the actual position now needs to open 26315 US dollars, which is the number corresponding to "actual position". If you do contracts, you need to add leverage, and you need to look at the data behind it. Add a few times the leverage depends on the corresponding number, but my suggestion is to use a small amount of leverage.
So how much money can we make? From Figure 9, we can see the opening price and the take-profit price (latest price). Then fill in 16494 for the corresponding opening price and 16546 for the latest price. As shown in Figure 11.
Figure 11
That is to say, when the market rises to 51.26 (Figure 9), the expected return of this transaction is 82.96 US dollars. The opposite is true for shorting. Subtracting the subsequent handling fee is the final actual profit.
Daily chart:
Figure 12
Fill in 6.61 for the stop loss ratio, 16444 for the opening price, and 18254 for the latest price (take profit price), as shown in Figure 13.
No matter which cycle we do, as long as we control the position, we can ensure the same profit and loss. Especially for novices, don't make the position too complicated. This calculator is enough.
Of course, this calculator is for my own convenience and does not take into account the problem of replenishment. Our old version of the calculator can calculate replenishment.
If you often do short-term trading, then you will definitely have to deal with trading ranges. Today, we will analyze K-lines one by one to learn how to trade within the trading range.
Let's use Ethereum's 15-minute chart as an example. The first thing to do is to look at the overall trend pattern of the market, as shown in Figure 1.
Figure 1
We can see that the overall market is in a downward trend. It is a big short trend, and it has just experienced a round of rapid decline. Next, let's look at Figure 2.
Figure 2
From Figure 2, we can see that K-line 1 that has just come out is a doji star with volume. A doji star in the process of falling cannot explain anything, but if it is a doji star with volume, it may be about to reverse (volume and price analysis knowledge point). From the perspective of volume and price analysis, K-line 1 is a stopping behavior.
At this time, we need to pay special attention. It is not that a reversal will occur immediately, and it is not that we can immediately "go all in" when we see K-line 1. It is at this moment that we need to pay close attention to the market. This short may be suspended.
Next, let's look at K-line 2 in Figure 3. K-line 2 is still a doji star with a long upper shadow line, so does K-line 2 count as high 1?
Figure 3
K-line 1 is a bullish signal K-line, and K-line 2 is indeed high 1, because the high point has broken through. But K-line 2 is a non-trend K-line, not a bullish trend K-line.
A bullish signal K-line must be followed by a bullish trend K-line, so K-line 2 is an invalid high 1. According to price behavior, K-line 2 is not a very good entry K-line, so we do not enter the market and continue to wait.
Next, let's look at K-line 3 in Figure 4.
Figure 4
The K-line behind K-line 3 also forms a high point breakout, but it is not an entry K-line either, and it is also invalid. Moreover, K-line 3 and the K-line in front of it do not constitute a bullish K-line themselves.
Then K-line 4 in Figure 5 appears. K-line 4 is a strong bullish trend K-line, engulfing the previous three bearish trend K-lines with one engulfing three, and is almost about to break through the highest point of the previous rebound. Then this K-line 4 is both a signal K-line and an entry K-line.
Figure 5
First of all, K-line 4 and the previous K-line constitute a bullish engulfing, and then the high point of K-line 4 breaks through the high point of the previous K-line from a long distance, so K-line 4 is both a signal K-line and an entry K-line.
If you only regard it as a signal K-line, and you want to be more secure and wait for another bullish trend K-line as an entry K-line, that is also possible.
Next, let's look at K-line 5 in Figure 6. Why does this big negative line appear at position 5?
Figure 6
Because the yellow line in the figure has a consensus, and smart money also knows that the take profit is at this position, so it is very important to leave for a short-term take profit. We are following in the footsteps of smart money. Then K-line 5 is the first short signal.
But according to my own trading habits, I will not enter the market here. I will wait for the second signal to appear.
Next, let's look at Figure 7. Is the doji star behind K-line 5 low 1? Is it the entry K-line we are looking forward to?
Figure 7
Using naked K knowledge to interpret it, it means that the shorts continue to exert force and break through the low point of the previous short trend K-line (K-line 5), trying to continue the power of the shorts. But it only went this one K-line and stopped. So it is not a very good entry K-line, not a bearish trend K-line.
Next, let's look at K-line 6 in Figure 8. After K-line 6 appears, can the decline from K-line 5 to K-line 6 be regarded as a simple retracement of the rise from K-line 4 to K-line 5?
Figure 8
Yes, but be careful.
The signal K-line 6 is very long. If you place an order like this, you either wait for an entry K-line. And the take profit can only see the previous high point, and there is no space above. The take profit can only see the high point of K-line 5. Only after it breaks through K-line 5 powerfully can we see the next take profit line.
Next, look at K-line 7 in Figure 9.
Figure 9
Now the decline from K-line 5 to K-line 7 is a two-stage adjustment and has created a lower low. Then, can it be seen as a complex retracement of K-line 4 to K-line 5? Look at Figure 10.
Figure 10
K-line 7 is a small short-term line and does not exceed 61.8%, so it can be regarded as a complex retracement. Let's continue to look at Figure 11.
Figure 11
K-line 7 plus the K-line behind it tells us a piece of information: this complex retracement has been completed, and now the entire trend 2.0 is about to start, and ideally it should go equidistantly.
Next, look at K-line 8 in Figure 12. The rise from K-line 7 to K-line 8 is the 2.0 era of the trend from K-line 4 to K-line 5, but did this 2.0 era fail?
Figure 12
It's too early to say that. But we can draw a preliminary conclusion that it may have failed and needs to be verified.
Still the same sentence, smart money knows to take profit at the position where they should take profit, so it will definitely bring a wave of supply power, and it is itself a big short trend.
When we see K-line 9 in Figure 13, are we sure that this trend 2.0 has failed?
Figure 13
It is indeed confirmed that it failed. In the structure from K-line 8 to K-line 9, K-line 8 is the first short signal, and K-line 9 is the second short signal.
If you are biased towards right-side trading, wait for another bearish trend K-line to be more stable; if you are biased towards left-side trading, enter the market at the market price now.
Logically speaking, K-line 9 is both a bearish signal K-line and a bearish entry K-line.
If we short now, the stop loss and take profit should be placed at the position in Figure 14.
Figure 14
Next, let's look at K-line 10 in Figure 15. Similarly, K-line 10 is the first short signal.
Figure 15
Either place a pending order to enter the market, or wait for another good-looking entry K-line.
Next, let's look at K-line 11 in Figure 16. A very good Pinbar was collected here at K-line 11. It is a bullish signal K-line, and it made a false breakout of K-line 10. If you collect a high 2 now, can you enter the market? (Because this is the second time a bullish signal K-line appears, so it is high 2)
Figure 16
Similarly, left-side traders can enter the market now, and right-side traders wait for the appearance of high 1. However, high 1 does not have a profit-loss ratio, so you cannot have both, so make your own choice.
Then, does K-line 12 in Figure 17 count as a new bullish signal K-line?
Figure 17
K-lines 10 and 11 are both bullish signal K-lines. K-line 10 is the morning star of the 12 golden K, and K-line 11 is the hammer line of the Pinbar. K-line 12 is also on the white key position, and the prototype of a new trading range has been formed.
The original trading range was the upper track and the lower track, as shown in Figure 18.
Figure 18
Now a new trading range has been created in the mid-track, as shown in Figure 19.
Figure 19
Then we can only treat it according to the new trading range.
K-lines 11 and 12 form a wave on the small cycle in Figure 20.
Figure 20
Lower lows and lower highs have formed, so you can recount.
Suppose we enter the market long at the Pinbar position of K-line 11, our take profit should be placed at the position in Figure 21.
Figure 21
Of course, there are reasons for putting it anywhere, but the profit-loss ratio of putting it here is very good. Together, it has a mathematical advantage.
Let's look at Figure 22. When the market goes to the white line position, supply appears, and many people take profits and leave the market. However, the demand side continues to exert force and raises the price again. The bulls continue to exert force. From a price behavior perspective, the three K-lines in Figure 22 are a simple retracement, or an FB structure.
Figure 22
Currently, the market has come to the key pressure level of the previous high again. K-line 13 is the first short signal.
For safety's sake, we will not enter the market for the first opportunity, and wait for the second entry opportunity, waiting to see a small double bottom or a small double top before entering the market.
Then the market goes to Figure 23, and K-line 14 appears. K-line 14 is another bearish signal K-line.
Figure 23
There was indeed a low 1 or low 2 produced later, but it is not a very good bearish trend K-line. Moreover, a true breakout has already occurred, breaking through the pressure level of the yellow line 1, then we need to find the next pressure level, which is the yellow line 2 above.
After K-line 15 in Figure 24 appears, it forms an evening star with the previous one, forming the second short opportunity.
Figure 24
If a bearish trend K-line is formed behind K-line 15, we can determine that it was a true breakout at the previous position, but K-line 15 is a false breakout of K-line 14.
Then K-lines 14 and 15 can form a small double bottom, which can be entered. Then our take profit should be placed at the previous low, which is the position of the previous yellow line 1.
K-line 15 is not the entry K-line we are looking forward to either. It is a non-trend K-line.
In fact, the methods I use when analyzing K-lines one by one are all the content we have learned. The purpose is not to let everyone enter the market to trade according to what I said, but to understand why I analyze this way, and learn the analysis ideas and analysis technical methods.
Today, the left-side trading and right-side trading, simple retracement and complex retracement, small double bottom and small double top, volume and price analysis - doji star with volume, 12 golden K - morning star, which are mentioned a lot in the article. To learn trading technology, you need a lot of practical experience, but more importantly, you need to read books, find your own trading path from books, and simplify complex problems. I hope everyone can understand.
Still the same sentence, if you don't know how to do it in a bull market, click on Brother Kui's avatar, follow, bull market spot planning, contract password, free sharing.
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