Having been through many ups and downs in the cryptocurrency space, I understand that many people long to find a reliable method for trading coins to accumulate wealth. Today, I will share my 'simple method' that has allowed me to go from 60,000 to over a million since I started with cryptocurrency in 2017, and now, using coins to achieve financial freedom. This method is simple and practical; as long as you are willing to take the time to learn, it may help you steadily advance in the cryptocurrency space towards the goal of 30 million.

At the beginning of 2017, I stumbled upon cryptocurrency, and since then I've formed an inseparable bond with this opportunity-filled market. During the bull market of 2017-2018, I invested 60,000 and ultimately gained over a million; during the bull market of 2020-2021, with nearly 10 million in capital, my maximum floating profit reached over 20 million. At the end of last year, I took 200,000 for a small trial, and it has now turned into 20 million, achieving a hundredfold profit effortlessly.

Once you gain insight into trading coins, it feels as if you have a cheat code, and with this method, I reached an eight-figure sum in just one year. I only trade one pattern, entering the market when the opportunity arises, and I never trade without a suitable pattern. My win rate has consistently been above 90% for five years. More often than not, I go fishing or work out without having to monitor the market constantly while still making steady profits.

I. Iron Rules for Trading Coins: Guard the Bottom Line to Go Further

Capital management is fundamental

Divide your funds into five parts, investing only one-fifth each time while controlling a 10% stop-loss. This way, if you make one mistake, you only lose 2% of the total capital; if you make five mistakes, you only lose 10% of the total capital, greatly reducing the risk of significant losses from consecutive mistakes, giving you more room for error and chances to recover in the market.

Going with the trend is the supreme principle

Always remember that every rebound in a downtrend may be a trap for buyers; do not enter lightly. Conversely, every drop in an uptrend is often a golden opportunity to buy. Following the major direction of the market allows you to trade with more confidence.

Avoid short-term surge cryptocurrencies

Avoid those cryptocurrencies that have rapidly surged in the short term; after a high plateau, a decline is inevitable. Blindly chasing highs will only make you a bag holder.

Use MACD to determine entry and exit points

A stable entry signal is when the DIF line and DEA form a golden cross below the zero axis and break above it; a reduction signal is when the MACD forms a death cross above the zero axis and moves downward. Strictly follow indicator signals; this can help reduce many unnecessary mistakes.

There are rules for increasing positions and stop-losses

Never add to a losing position; instead, add to your position when you are in profit. Volume-price indicators are also crucial. Pay special attention when prices break out on high volume at low levels and exit decisively when high volume stagnates at high levels. Only trade assets in an upward trend; the 3-day, 30-day, 84-day, and 120-day moving averages turning upward represent short-term, medium-term, main upward wave, and long-term rises respectively. Following these trends will greatly increase your chances of profit.

Persist in weekly reviews

Timely adjustment of trading strategies is essential; the market is constantly changing, and only by continuously adapting to the market can you maintain consistent profits.

II. Backtesting Strategy: Creating a 'Magical Tool' for High Win Rate Trading

Many people trade blindly without appropriate backtesting, which is akin to gambling in a casino; you might win a few times, but in the long run, you will inevitably suffer significant losses. Backtesting helps you fine-tune trading strategies before taking risks, ensuring they perform relatively stably under various market conditions.

What is Backtesting

Backtesting is a method of analyzing the performance of current trading strategies over a certain past period; it helps you assess the behavior of the strategy in retrospective market scenarios, determine its strengths and weaknesses, and serves as an important tool for validating trading models. Its concept is based on the theory of financial market cycles, which states that strategies that were viable in the past may still apply in the future, while strategies that failed in the past are unlikely to succeed in the future.

Why Backtest

Backtesting quantifies risks and returns and their relationship, allowing you to understand how strategies perform under real market conditions, simulate trading ideas, and test risk management mechanisms to identify strategy weaknesses, enhancing risk management tools to achieve more satisfactory results in actual applications.

Preparation Before Backtesting

First, ensure the data and backtesting methods are as unbiased as possible to avoid optimization bias, look-ahead bias, survivor bias, etc. Then choose suitable backtesting software; if you trade through a specific brokerage, their platform may have built-in backtesting features, or you can subscribe to third-party platforms. If you have technical skills, you can even write scripts yourself.

Steps of Backtesting

Step 1: Provide carefully selected historical data and specify the training set and alternative time period data to verify strategy reliability; Step 2: Set initial capital, risk capital, commission, and other parameters, as well as specific parameters for the trading strategy such as stop-loss and profit levels; Step 3: Backtest the test dataset and run multiple times to eliminate potential bias.

Evaluate Backtesting Results

Do not judge the quality of a strategy solely based on returns; consider the risk as well, and choose strategies that achieve satisfactory returns under low risk, with a high Sharpe ratio. Additionally, pay attention to volatility and asset correlation; excessive volatility may trigger stop-loss or profit orders, while excessive asset correlation means insufficient diversification in the portfolio, resulting in weak risk resistance.

III. Investment Prerequisites and Methods: Laying a Solid Foundation for Profit

Investment Prerequisites

Ensure your own and your family's financial security; do not invest emergency funds, borrowed money, or credit card money. Use spare cash for investment and keep a certain amount of cash for emergencies. This is a crucial foundation for maintaining a stable mindset during the investment process.

Investment Methods

  • Full-time investment: ample time, skilled business, significant capital, can invest more in high-risk, high-return assets, and investment types should be specialized; focus leads to professionalism.

  • Part-time investment: limited time, average business, capital can be more or less, suitable for investing in low-risk assets for long-term investment.

IV. Investment Pitfalls and Successful Concepts: Avoiding Traps, Moving Towards Success

The 10 Major Investment Pitfalls

Full capital trading, frequent trading, counter-trend trading, locked positions, lowering and raising average holding prices, measuring tops and bottoms without setting stop-losses, going long when conditions are favorable and short when conditions are not, blindly following news, and not reflecting on oneself while doubting the market, making long-term trading plans, etc. These pitfalls can lead to repeated failures in your investment journey; be sure to avoid them.

Concept of Successful Investment

Go with the trend, focus on the big picture while paying attention to the details, forget about costs and enter and exit calmly without urgency or anxiety, prioritize risk and act within your means, remain calm and wealth will accumulate. Upholding these principles will enable steady progress in the investment market.

V. Newbie Operation Principles and Mature Trading Judgment: The Key to Rapid Growth

Newbie Operation Principles

If you don't understand market conditions, consult professionals. Do not take contrary positions, avoid trading in consolidating or volatile markets, do not operate with full capital, and be firm with stop-losses.

Mature Trading Judgment

There should be stable positive returns, stable and closed signals, controllable risks, and replicable trading models.

VI. Trading Rules and Experience: Summary of Years of Practice

Trading Rules

Do not guess the market direction; use long-term moving averages and pattern breakouts for judgment. Once you see the direction, control your positions; exit promptly if wrong, and hold if right. Learn to exit profitably, overcoming fear and greed.

Trading Experience

Focus on one asset; the simpler the indicators, the better. Review after the market closes, ensure entry and exit indicators are consistent, develop a right-side trading habit, maintain a stable mindset, avoid over-leveraging, trade medium to long-term in trending markets and swing trade in sideways markets. Buy when prices are above the moving average and sell when below, understand the relationship between open interest and futures price, and choose appropriate cycles for long and short operations.

The above is a summary of my experiences and methods from years of trading coins. Often, it is your doubts and hesitations that cause you to miss many profitable opportunities. Only by bravely trying and understanding can you learn the ropes. If you want to gain something in the cryptocurrency space, try operating according to these methods. Remember to follow me; I will continue to share more insights from the cryptocurrency world, and together we can achieve wealth growth in the crypto space!