I am 36 years old this year, from Hunan, and now live in Guangzhou. I have two houses, one for my family and one for myself. I also have two cars, one Maserati and one GLS.
All of this is from my 10 years of experience, starting capital of 300,000 earned in the cryptocurrency market, with a minimum drawdown to only 60,000, but I still managed to roll it into tens of millions with the simplest methods, achieving a 400-fold return in just 4 months, pulling off 40 million directly!
Does it sound like a joke? But this is the result of over 3000 days of practical experience.
There are many ways to trade cryptocurrencies, but not all methods can be learned. We all hope to achieve good results using the simplest methods, while friends in the cryptocurrency market are not unable to select good coins, but rather overthink!
Whether in a bull market or a bear market, whether you are a novice just starting out or an experienced veteran, as long as you use these 【10 Cryptocurrency Trading Iron Rules】 well, achieving a 30-fold return in a month is not a fantasy!
Iron Rule 1: Trend Reversal Signal Identification
In a downtrend, if there are three or more consecutive bullish candlesticks rebounding, or if the bearish candlestick pullback in an uptrend does not exceed three consecutive bearish candlesticks, this is likely a warning signal for a trend reversal, so pay close attention.
Iron Rule 2: Oscillation Breakout Operation Guide
In a volatile market, a period of rising volume and stable prices often leads to a significant breakout. In practice, you can buy on dips and wait for two bullish volumes to exceed the previous bearish volume, allowing for early entry to seize the opportunity.
Iron Rule 3: Strong Market Holding Strategy
The holding strategy in a strong market is very simple; as long as the daily line does not fall below the rising moving average, hold firmly. Do not let technical indicators interfere, especially in a high-level dull state, to avoid getting off too early.
Iron Rule 4: Candlestick Combination Analysis Skills
A medium bullish candlestick paired with two doji candlesticks usually indicates a continuation of an upward trend, which is also a typical bullish pattern for strong cryptocurrencies; once discovered, it can be actively followed up.
Iron Rule 5: Unconventional Market Psychology
The market often goes against the majority opinion. The smoke bombs released by the main forces and the market tops often occur when everyone is optimistic; you must maintain independent thinking and contrarian thinking.
Iron Rule 6: Key Points for KDJ Indicator Usage
When encountering consecutive large bearish candlesticks, and the KDJ's J-line is below -12, it indicates that a short-term rebound is imminent. At this point, do not rush to act; wait for the rebound to occur before making a judgment, avoiding blind bottom-fishing.
Iron Rule 7: Key Features of Bullish Breakout Candlesticks.
During an upward breakout, a bullish candlestick turnover rate of around 8% is considered a healthy attack volume. If the turnover rate is too high or too low, it could trigger a pullback, so be cautious.
Iron Rule 8: Core Principles of Risk Control
Never go all-in; always leave yourself some room. Market risks are everywhere, and acting cautiously can give you space to correct mistakes and keep your capital safe.
Iron Rule 9: Essential Mindset for Emotional Regulation
When trading cryptocurrencies, maintain a calm and rational mindset, and treat market fluctuations correctly. Never let emotions dictate your decisions; a stable mindset allows you to go further.
Iron Rule 10: Learning, Communication, and Growth Path
Do not work in isolation; communicate and share with other cryptocurrency traders. Even if the other party's opinion is wrong, it is still valuable experience for your growth; mutual progress is what allows us to move more steadily in the cryptocurrency market.
The above 10 iron rules are all verified by my real investment in the market. I suggest everyone read them repeatedly and remember them. I believe that as long as you use them proficiently, your cryptocurrency trading level will definitely improve dramatically!
These valuable pieces of advice are the wisdom gained from years of practical experience and are worth considering and strictly adhering to. I hope these suggestions can help everyone avoid detours in the market and steadily move towards success.
Today's focus is on a simple yet highly effective cryptocurrency trading method - the Three White Soldiers candlestick strategy.
In Japanese candlestick patterns, the Three White Soldiers (Three White Soldiers Pattern) is a bullish reversal candlestick pattern that typically appears at the bottom after a price decline, suggesting that a price reversal may occur soon.
Since the Three White Soldiers pattern is a bullish reversal pattern, we want to see prices decline before this pattern appears, making it a common signal for the end of a trend.
How to Identify the Three White Soldiers Pattern?
The Three White Soldiers pattern is a triple candlestick pattern consisting of three consecutive bullish candlesticks located at the bottom of a downtrend. It is the mirror version of the 'Three Black Crows' pattern.
The method for identifying the 'Three White Soldiers' pattern on the chart is as follows:
◎ Three consecutive bullish candlesticks
◎ Larger body
◎ The shadows should be small or nonexistent.
This pattern looks like this on the chart:
Therefore, to identify the Three White Soldiers candlestick pattern on the chart, you need to find three consecutive bullish candlesticks appearing at the bottom of a downtrend.
In addition, each candlestick must have a relatively long body, and the opening price must be higher than the closing price of the previous candlestick, ultimately forming a 'V' shape.
Variants of the Three White Soldiers candlestick pattern
Of course, the Three White Soldiers candlestick pattern may vary on daily trading charts.
You may see a large gap between the closing price of one candlestick and the opening price of the next, making them start from within each other.
It is usually seen that the candlesticks gradually become smaller during the formation process.
It may look like this on the chart:
How to Trade the Three White Soldiers Candlestick Pattern
To trade the Three White Soldiers candlestick pattern, merely finding the same-shaped pattern on the chart is not sufficient.
What makes a pattern effective is not just the shape, but also the position it appears in. This means that the same shape appearing in different locations may have different implications.
When trading the Three White Soldiers, we want to first see the price decline, forming a bearish trend.
The Three White Soldiers pattern that appears after a bearish trend may signal a reversal upwards.
It looks like this:
So when should we enter a trade based on the Three White Soldiers pattern?
Simply put, you can enter a trade when the high of the last candlestick is surpassed.
This is the trigger factor for adopting a conservative bullish strategy, as shown below:
For stop-loss, we can set it below the first candlestick of the Three White Soldiers pattern.
Additionally, to improve accuracy, we want to trade the Three White Soldiers candlestick pattern by combining it with other technical analyses or indicators.
Trading strategy for the Three White Soldiers candlestick pattern
Strategy 1: Use Trend Reversal Indicators - RSI and Stochastic Oscillator
The two most effective indicators for confirming trend reversals are the Relative Strength Index (RSI) and the Stochastic Oscillator. Essentially, these technical analysis tools indicate overbought and oversold areas, thus potentially helping you identify potential reversal zones.
As seen in the AUD/USD 1-hour chart below, when the Three White Soldiers pattern appears (RSI below 30, stochastic indicator below 20), both the RSI and the stochastic indicator are below the oversold area. This validates the candlestick pattern and provides additional signals for the impending trend reversal.
In the above example, the trader will establish a bullish position after the completion of the third bullish candlestick, setting the stop-loss at the lowest level of the first candlestick or below. The take-profit should be set at the highest level of the previous bearish trend candlestick.
Additionally, you can use RSI divergence to trade the Three White Soldiers pattern. This is somewhat different from other trading strategies.
To find a bullish RSI divergence, we want to first see the price in a downtrend, forming lower lows and lower highs.
Operation Steps:
◎ Find a downward trend.
◎ Mark the lows formed after each decline in price.
◎ At the same time, compare the price lows with the RSI indicator.
◎ When you see the RSI forming a higher low while the price forms a lower low, you have found a divergence.
◎ Wait for the Three White Soldiers pattern to appear at a lower price low, aligning with a higher low in the RSI.
◎ Go long when the price breaks above the high of the last candlestick in the Three White Soldiers pattern.
◎ Set stop-loss and take-profit targets, expecting the price to rise.
Strategy 2: Trade the Three White Soldiers with Fibonacci.
In addition to using trend reversal indicators, you can also use Fibonacci retracement levels to detect potential support or resistance areas and determine if a trend reversal may occur.
Fibonacci shows the retracement levels where prices often reverse. Depending on the strength of the trend, different levels may work differently with the Three White Soldiers pattern.
Operation Steps:
◎ The market is in an upward trend.
◎ Then wait for a decline
◎ Use Fibonacci tools to draw levels from the low to the high of this wave.
◎ When the price touches the Fibonacci level and forms the Three White Soldiers pattern, this is the signal to wait.
◎ Go long when the price breaks above the high of the third candlestick in the Three White Soldiers pattern.
◎ Set stop-loss and take-profit targets, expecting the price to rise.
To draw Fibonacci retracement levels, you need to find a completed trend and drag it from the lowest point of the previous trend to the highest point (as shown below).
Then, once you have drawn the Fibonacci retracement levels, you can zoom in and look for entry levels. Additionally, you can use Fibonacci to find stop-loss locations and take-profit targets.
Taking the above example, the entry point will be the closing price of the third candlestick (because the market trading price is above the 78.6% Fibonacci level).
Then, the stop-loss can be set at the lowest level of the first candlestick or the 0.0% Fibonacci level (i.e., the lowest level of the previous price range). Finally, the take-profit can be set at the highest level of the previous trend or one of the Fibonacci levels below.
Strategy 3: Use Moving Averages to Trade the Three White Soldiers
Moving averages are excellent indicators for trend trading. When prices are in an upward trend, they tend to pull back towards the moving average.
Operation Steps:
◎ Find an upward trend, with prices jumping above the moving average.
◎ Wait for the price to pull back to the moving average.
◎ Check if the Three White Soldiers pattern appears on the moving average.
◎ Go long when the price breaks above the high of the last candlestick in the Three White Soldiers pattern.
◎ Set stop-loss and take-profit targets, expecting the price to rise again.
What is the success rate of the Three White Soldiers pattern?
According to Thomas N. Bulkowski, an internationally renowned trader, the success rate of the Three White Soldiers candlestick pattern is as high as 84%.
Advantages and Disadvantages of the Three White Soldiers Candlestick Pattern
Here are the most common advantages and disadvantages of trading the Three White Soldiers pattern:
Summary
The Three White Soldiers is a pattern of three candlesticks.
To ensure effectiveness, it must appear after a price decline.
This is a bullish reversal pattern, indicating a potential upward price reversal.
To improve accuracy, you can use RSI, moving averages, and other trading indicators to trade the Three White Soldiers.
The win rate for the Three White Soldiers candlestick pattern is 84%.
It is important to note that no trading strategy is infallible; sometimes, while using a strategy, you may encounter a significant market shift, and the market begins to develop with strong momentum.
To ensure you can withstand appropriate risks, please lock in profits appropriately when the trend is favorable to you, securing your gains. Remember to always test these strategies or indicators in simulated trading.
In the cryptocurrency market, one should avoid the mindset of gains and losses and feelings of regret. Trading should only be disciplined, without emotions, no 'what ifs', no fear, no greed; all operations should only be based on whether it should be done and whether it has been done. Emotional people cannot trade well. The wind, forest, fire, and mountain - stay calm.
Even the most diligent fisherman will not go out to sea during the stormy season, but will carefully guard his fishing boat; this season will pass, and a sunny day will come! Pay attention to Yan An, who not only gives you fish but also teaches you how to fish. The door to the cryptocurrency market is always open; only by following the trend can you have a life that follows the trend. Remember this!