Ten years ago, I entered the crypto world with only 50,000 yuan. After experiencing various pains, confusion, and self-doubt, I ultimately achieved a great understanding, simplifying trading techniques, and finally achieving stable profits. Now, life is relatively comfortable; in my spare time, I fish, play ball, and occasionally meet friends for drinks! Today, I will share my methods with everyone!
In the crypto world, many newcomers may not know how to read K-Line charts, and even those who do only understand a little. It is often said that mastering one skill can lead to success. It's not difficult to grasp a technique that you can understand; what's difficult is the unwillingness to learn. Trading cryptocurrencies isn't for others; it's for yourself. If you are willing to invest time and effort to master it, trading stocks won't be as hard as you imagine.
Before discussing technical strategies, I strictly adhere to the following seven iron rules of trading:
1. Why do most retail investors suffer losses? It's not that retail investors can't choose assets; a significant reason is that they can't operate effectively. They either trade too frequently or invest all their capital without understanding the overall trend in the market. They monitor the market whenever they have time; when they see a decline, they panic and want to act, resulting in missed major trends. Sometimes, even when the downtrend is clear, they stubbornly hold on, turning short-term trades into long-term holds, ultimately increasing their losses. The correct operation is to choose a project with good fundamentals and growth potential; as long as it is in an overall uptrend, you can continue to support it.
2. Falling out opportunities, rising out risks. Retail investors often like to chase up, fearing falls. When they see their assets not rising for a day, they feel uneasy and want to chase rising assets, ultimately getting stuck at high positions. When their assets face significant adjustments, they can't bear it, ignoring the overall trend, which results in missing out on strong assets and major profits. In fact, falling is an opportunity, especially during volume-reducing pullbacks in an uptrend; such opportunities are golden pits.
3. Only engage in operations within your system. Once you have your own trading system, you will find trading cryptocurrencies becomes much easier, and you won't be swayed by market trends; instead, you'll remain calm. For instance, if I focus on trend-value trading, I will only look for undervalued sectors with strong fundamentals, add them to my watchlist, and wait for market funds to enter before I follow suit, taking profits and moving on to the next target cleanly. Therefore, I rarely get stuck at high points; the only time I may exit is if the price trend does not meet expectations.
4. Set Profit and Loss Limits. Trading cryptocurrencies is inherently a probabilistic event with successes and failures. For most traders, setting profit and loss limits is very important. When the price trend does not meet expectations or breaks below a trend, one should unconditionally cut losses and not just hold on. Similarly, if the price has gained significantly, exiting the market at any time is a good decision; don't feel regretful, as very few people can exit at the peak; exiting at a relatively high point is sufficient.
5. Learn to diversify your portfolio; do not put all your eggs in one basket. For example, if you are very optimistic about a particular asset and invest all your capital, ending up with a 10% loss leaves you helpless. However, if you enter with only 30% of your capital, you can choose to add to your position or exit since the loss won't significantly affect your overall situation.
6. Be patient; waiting is also a strategy. We are not gods; it is not possible to enter the market and immediately profit. Many times, waiting is necessary, and time can compensate for operational errors. If your trading skills are lacking, then use time to make up for it.
7. The gold emerges from the sand; in a weak market, it's easy to identify truly strong assets. When the index drops significantly, if your asset rises against the trend or only drops slightly, it indicates there is strong backing for that asset, which can be held long-term, with significant future potential.
So how to excel in cryptocurrency trading? Once a person enters the financial market, it's difficult to turn back. If you are currently losing and still confused, but plan to treat cryptocurrency trading as a second career, you must understand the 'simplest K-Line chart techniques.' Understanding and comprehending them will save you from many detours; these are personal experiences and feelings, so it's recommended to save and ponder repeatedly!
What is a K-Line Chart?
K-Line charts are a method of tracking the historical prices of assets over time. Each K-Line represents a specific time period, and its length depends on the time frame chosen by the trader. For example, if you set a daily chart, each K-Line represents one day.
The following key components can help understand the use of K-Lines, making price analysis more intuitive.
K-Line Body
K-Line bodies represent the opening and closing prices of the asset. The position of the opening or closing price depends on whether the K-Line indicates a bullish or bearish trend during a specific time period. In a bullish market, the closing price will be above the opening price, while the opposite is true in a bearish market.
K-Line Shadows
Each K-Line usually has two so-called shadows, although this is not a fixed rule. Shadows represent the highest and lowest prices during a specific time period. The upper shadow represents the highest value, while the lower shadow represents the lowest price reached. Sometimes, a K-Line may have only one shadow when the other shadow overlaps with the opening or closing price, aligning with the body on the same horizontal line.
K-Line Colors
The color of the body indicates the direction of price movement. Typically, green (or white) bodies indicate a price increase, while red (or black) bodies indicate a price decrease. Most platforms display bodies in green or red. Therefore, if the body is green, the highest point of the body will indicate the closing price.
16 Popular K-Line Patterns:
K-Line patterns are diverse, and in this article, we will introduce some of the most popular and reliable patterns, starting with bullish patterns that appear after a downtrend and indicate an impending upward reversal. Cryptocurrency traders typically open long positions when these patterns appear.
1. Hammer Line
Hammer K-Line consists of a short body and a long lower shadow. The reason this pattern is called a hammer is that the shape of the K-Line resembles an upright hammer. Generally, hammer lines appear at the bottom of a downtrend, indicating that buyers have resisted selling pressure during this period and pushed prices higher. Hammer patterns can be green or red, but green hammers indicate a stronger bullish trend than red hammers.
2. Inverted Hammer Line
The Inverted Hammer is similar to the standard hammer pattern but has a longer upper shadow and a very short lower shadow. This pattern indicates strong buying power, while short sellers attempt but fail to lower the price. As a result, buyers return with greater pressure, pushing prices higher.
3. Bullish Engulfing
Unlike the previous two patterns, the Bullish Engulfing pattern consists of two K-Lines. The first K-Line should be a short red body, and the next larger green K-Line engulfs it. The opening price of the second K-Line is below that of the previous red K-Line, increasing buying pressure and reversing the downtrend.
4. Piercing Pattern
Another double K-Line pattern is the Piercing pattern, which may appear at the bottom of a downtrend at support levels or during a pullback when a bullish trend is expected.
This pattern consists of a long red K-Line followed by a long green K-Line.
The key to this pattern is that there is a significant gap between the closing price of the red K-Line and the opening price of the green K-Line.
The closing price should at least cover half the length of the previous day's red K-Line body. The closing price of the green K-Line is much higher than the opening price, indicating buying pressure.
5. Morning Star
The Morning Star pattern is more complex as it consists of three K-Lines: a long red K-Line followed by a short body K-Line and a long green K-Line. The Morning Star pattern indicates that selling pressure from the first period is weakening, and a bull market is forming.
6. Three Hundred Soldiers
Another pattern consisting of three K-Lines is the Three White Soldiers.
This pattern consists of three long green K-Lines, usually with short shadows.
The main condition is that there are three consecutive green K-Lines, with both the opening and closing prices above the previous period.
This pattern is regarded as a strong bullish signal following a downtrend.
Next, we will discuss a set of bearish patterns that are expected to reverse an uptrend, typically appearing in resistance areas.
These patterns typically prompt traders to close long positions or open short positions.
7. Hanging Man Line
The Hanging Man Line is a K-Line with a very short body and a long shadow, which can be green or red.
Typically appears at the end of an uptrend, indicating an impending sell-off. However, short sellers may temporarily push prices higher before losing control.
8. Shooting Star
The Shooting Star is the opposite of the Inverted Hammer. This pattern consists of a short body with a long upper shadow and is a red K-Line.
Generally speaking, the market will gap up at the opening of the K-Line and will spike to a local high, with the closing price slightly lower than the opening price. Sometimes the body may be almost nonexistent.
9. Bearish Engulfing
The Bearish Engulfing pattern is the opposite version of the Bullish Engulfing, where the first K-Line's green body is smaller and is completely engulfed by the subsequent long red K-Line. This pattern appears at the peak of an uptrend, indicating a potential reversal.
The lower the closing price of the second K-Line, the greater the bearish momentum.
10. Evening Star
The Evening Star represents a specific three K-Line pattern.
It consists of a middle K-Line with a short body, flanked by longer green K-Lines on both sides and a larger red K-Line, where the closing price of the third K-Line is lower than the midpoint of the first green K-Line.
This pattern typically appears at the top of an uptrend, suggesting a possible reversal.
11. Three Black Crows
The Three Black Crows pattern consists of three long straight red K-Lines with short or almost nonexistent shadows.
The opening price of each new K-Line is essentially the same as that of the previous K-Line, but each closing price drops significantly.
This is a strong bearish signal.
12. Dark Cloud Cover
The Dark Cloud Cover pattern is similar to the Piercing Line but is the opposite.
This pattern indicates a bearish reversal, consisting of two K-Lines, where the opening price of the red K-Line is higher than the previous green K-Line body, and the closing price is lower than its peak.
This pattern indicates that short sellers have taken control of the market, driving prices down.
If the K-Line has short shadows, traders can anticipate a strong downtrend.
In addition to predicting bullish and bearish trend reversals, there are also neutral K-Line patterns that indicate bullish or bearish trend continuation.
These include: Doji Star, Spindle Line, Falling Three Methods, Rising Three Methods
13. Doji Star
The Doji K-Line has a very small body and long shadows.
This pattern is often seen as a continuation pattern, but traders should also be cautious as it may indicate a reversal.
To avoid confusion, wait for a few K-Lines to appear after the Doji before opening a position when the situation is clear.
14. Spindle Line
The Doji Star is similar, and the Spindle Line is also a K-Line with a short body. However, the shadows at both ends of this pattern are of equal length.
This pattern also indicates sideways movement and may imply that prices are consolidating or correcting after a significant rise or fall.#香港稳定币条例
15. Falling Three Methods
Falling Three Methods consists of five K-Lines arranged in a specific way, indicating a continuation of the downtrend.
This pattern consists of two longer red bodies at both ends and three smaller green bodies in the middle.
The bodies of the green K-Lines are completely covered by the bearish red bodies, indicating that the bulls do not have enough strength to reverse the downtrend.
16. Rising Three Methods
The Rising Three Methods pattern is the opposite of the previous pattern and typically appears during an uptrend.
This pattern consists of two longer green bodies at both ends and three smaller red bodies in the middle.
How to Read K-Line Charts
K-Line charts contain a wealth of historical data and information, making them easy to read when combined with practice. Besides the K-Line patterns discussed above, there are many K-Line charts formed by specific arrangements, such as double tops and double bottoms, flags, and triangular flags.
Even novice or experienced traders can read K-Line charts by visually assessing the overall trend. These visual materials often provide sufficient#币安HODLer空投LA
insights to help traders identify specific patterns in K-Lines and their components, especially at resistance and support levels.
Common Terms in K-Line Charts
The following terms related to K-Line charts are provided for your reference during trading: Opening Price - Opening price of the K-Line; Closing Price - Closing price of the K-Line; Highest Price - The highest price covered by the K-Line during the period; Lowest Price - The lowest price covered by the K-Line during the period.
Advantages of Using K-Line Patterns
K-Line patterns help cryptocurrency traders better understand potential future trends. In other words, K-Line patterns serve as signals to help
traders decide when to open long or short positions and when to enter or exit the market. For example, swing traders view K-Line charts as indicators to determine reversal
and continuation trading patterns.
K-Line charts and their patterns can help traders determine trends, understand momentum, and stay updated on current market sentiment.
Mnemonic Methods for K-Line Patterns
To quickly recognize K-Line patterns, traders need to familiarize themselves with K-Lines by observing charts and trading with small amounts. A good#SECETF审批
A good starting approach is to focus on learning single K-Line patterns and carefully analyze patterns formed by two K-Lines.
It's best to start with one pattern until you gain confidence in easily identifying that pattern during price fluctuations.
Finally
every cryptocurrency trader should master K-Line patterns, including cryptocurrency day traders, because K-Line patterns are as effective in this market
as they are in the forex and stock markets. No matter how diligent a fisherman is, he wouldn't go fishing in stormy weather but would focus on safeguarding his fishing boat, knowing that the storm will pass and sunny days will come! Pay attention to the feast and learn both how to fish and the fishing method; the door to the crypto world is always open. Following the trend is the key to a prosperous life, so remember this!
