A good friend in the industry has been in institutional trading for 6 years. As a former sickleman, I will tell you the real reason behind this. There is a kind of coin people that makes the main players feel helpless. In order to make money from retail investors, institutions continue to study the psychology and behavior of retail investors. We retail investors might as well turn around and regard ourselves as institutional investors and study the psychology and behavior of institutions. Only in this way can we be invincible in this coin circle full of traps, fraud, deception and rumors.
1. Coin Selection
If we want to create a digital currency, the team will organize analysts and traders to explore a currency with a suitable market value, which does not need to have a very good prospect, but does not have the risk of delisting in the short term. In addition, the background of the project, the application scenarios of blockchain technology, and the community activity are also factors we need to consider.
2. Voting
After the coin is successfully selected, the team will arrange public relations personnel (usually a senior analyst and an influential community expert) to communicate with the project party, telling them that I want to increase the price of this digital currency and asking them to cooperate. This is called "vote solicitation" in the industry. So how do we ask the project party to cooperate? When we are accumulating funds, we should try to release negative news when issuing announcements or community news, or appropriately hide positive news. This is easy for the project party to do, as long as they make appropriate adjustments to the project progress information. For example, some technical difficulties can be exaggerated to make its short-term prospects seem bleak; or future good news can be delayed, which makes the current market very pessimistic about the coin.
3. Crashing the Market
After the "vote solicitation" is successful (the success rate is almost 90%, because these project parties also want to make the coin price rise and make profits, you know...), you have to start buying some chips, which are mainly used to smash the market. How to collect these chips for smashing the market? I will not collect them slowly every day, because this will make the coin price rise every day, but it will be difficult to receive enough chips, and it will be easy to be snatched by retail investors, and the technical indicators will form an upward trend, which will increase my collection cost. I will use a big rise method to collect on a certain day. After falling for several days, retail investors are pessimistic and disappointed. Suddenly there is a big rise, and those who are stuck see hope and will not sell; while those who make short-term profits may surrender. In fact, at this price, I just want to smash the market. I don't need to collect a lot of chips, so it is easy to achieve the goal by using a sudden surge. The next day, it will open low. Why open low instead of high? Because I am not going to make a profit from the chips I collected yesterday, and I want the short-term chips that followed the trend yesterday to help me dump the market. If it opens high, it will be easy for the short-term chips to make a profit, and they will have more funds to compete with me on the way down, so I must open low to consume these short-term funds.
During this decline, I will gradually use a single bottom support, because I want to form my own bottom position. After a few days of continuous decline, some of the chips that have been cut will cover their positions. At this time, I cannot let them cover their positions. I must quickly buy them up and let them chase the trend. When a chasing trend is formed, I will sell some of the chips at the bottom at a high price, one is to reduce costs, and the other is to free up funds, and then quickly smash them down. Similarly, I will support and smash at the same time, so that I can get more chips at a lower price. When it falls to a very low level, basically no one will grab chips from me, because during this decline, I will constantly sell high and buy low, and constantly oscillate greatly, so that most of the bottom-picking and rebound-grabbing will be trapped in the decline, or their losses will be exhausted, so that they dare not get involved in this digital currency again. At this time, my goal has been achieved.
The cooperation of the project party is very critical at this time. There has been no good news for a long time, and there are even occasional negative rumors, which makes most retail investors doubt whether it will return to zero, and then panic and fear. The high-level chips will continue to fall. I can continue to sell high and buy low in the bottom sideways to collect chips. This may take a long time. The key depends on the degree of chip drop at the top. If the high-level chips do not loosen for a long time, then I will not pull this coin.
4. Spread the news
When enough chips are collected, the good news from the project will also come, because while I am collecting chips, the project will have released all the bad news that can be thought of during that period, and the subsequent news will certainly be good. At this time, it is effortless for me to pull it up, and it does not cost much. When other people in this market see that this coin has so much potential, there will definitely be many followers, and I will gradually reduce my position in the meantime. I will release some news about the project through interactive communication communities such as Twitter, Telegram groups, and currency circle forums. Of course, because we have communicated with the project, we can naturally get first-hand information and attract investors' attention.
If the project party can cooperate in this way, what benefits can he get? In fact, it is very simple. I will pull the coin price to a high level, and the tokens in their hands can also be sold at a good price; when it is low, they can also buy more tokens and increase the popularity of the project. In this way, the income will be considerable. Why not? This must be the same as the trend of the market. In the meantime, retail investors should know what to do.
V. Supervision
Of course, if I were to be a banker, I would have to consider many issues: the first is the monitoring of regulatory agencies in various countries. Although the regulation of the currency circle is relatively loose, it would be very troublesome once it is targeted. Therefore, the manipulation of the currency price cannot be too blatant. At this time, we must consider multi-account operations, or pull several large private equity joint actions. The second thing to consider is the unlocking of large amounts of tokens by the project party. If they see considerable profits when we pull, they unlock and sell a large number of tokens, then we will be miserable and will inevitably lose money. Before doing it, we must communicate with them first to understand their unlocking plans and selling intentions. The third thing to consider is the old banker. If the coin has not been abandoned by the old banker, I will try not to touch it, because once it is reversed by the old banker, you will die miserably. The fourth is the market situation, whether there are many followers, whether there is enough stock in the market, and if most retail investors or large investors have just been cut off, it is not suitable to do currency at this time. You pull others to sell, and end up trapping yourself in it. Then the most suitable thing now is to smash the market.
Most people have a mentality that if they buy a coin for $10, they will not sell it if it drops to $8, and they will not sell it if it drops to $5. Even if it drops to $3, there are still not many people who sell it. But if it drops to $1 and then pulls back to $2, many people will basically cut their losses when they see it double, especially if it goes down or sideways for a long time. If these problems are solved, the market smashing will begin. How much is appropriate to smash? According to the market conditions, you must follow the market every day. When the market falls sharply, you must smash it deeply. At this time, the cost is very low. You only need to use a small amount of chips to smash the key points, and there will be stop-loss orders to help you smash it. However, some chips must be added at the end of the trading to prevent the market from going down or up the next day. Having a certain amount of chips will make it easier to control flexibly. In other words, you must keep an eye on the mainstream currencies when trading.
Why do you focus on mainstream currencies? The key lies in cost. As the market fluctuates, your cost is the lowest. When mainstream currencies fall, you also fall, and the amount of chips used to smash the market is the least, because not many people dare to buy, so you can smash it deeply. When the market rises, you pull it up, and you don’t need to buy a lot. Just buy the chips at key points. Someone will push the price up. When it reaches a certain high point, you can also sell some of the chips you bought at a low price, so that you can free up some funds to make a little difference. Therefore, the situation in the currency circle we see is that if it rises, everyone rises together, and if it falls, everyone falls.
6. Strategies for different investors
There are several types of people in the currency circle, trend investors, those who ignore it after being locked in, technical people, fundamental people, long-term investors, short-term speculators, etc. I want to be the banker in this currency, and I have to face all these people, and try my best to make them earn less or sell at a loss in the currency I control. At this time, I have to use many methods to deal with them, because if they earn more, it means I earn less, and if they don't sell at a loss, I won't make any money.
I don’t have any good ideas for trend investors. I can only regard them as part of the locked position. Technical people usually trade short-term and like to trade in waves. There are many experts among them, and we should be on guard against them. Sometimes, a little carelessness may lead to the failure of our entire plan. Because some experts have many followers, it is easy to form a large amount of capital buying or selling. Sometimes, we will communicate with some folk experts, hoping that they can cooperate with our layout. Of course, we will let them profit from it.
I generally like those who ignore me after being locked in. These people give me their money and help me lock up most of the chips, so that I have sufficient funds to roam freely at the bottom. The fundamentalists are also my second favorite, because they basically take over after I raise the price of the currency. The prospects of the project are described as very beautiful after I raise the price of the currency, so they will come to take over; after they take over, the fundamentals of the project are exposed to have problems, and they will return the chips to me at a low price.
Looking back, haha, it’s really funny, the K-line really conforms to the characteristics of certain technical indicators. Is it accidental or inevitable?
Here I will explain why I want to kill the hot money. In fact, this is related to my own short-term gains, because the money of short-term traders and hot money is the easiest to make, and they hold their chips for a short time, which allows me to make a profit in a very short time. For example, if you are stuck with a locked-in position, you can only make a one-time profit from it, and then it will not move, and you have no way to deal with it. Sometimes it can take several years, and I have to eat and drink during these years; fundamentalists also do not make me much profit, because I have to share their profits with the project party. But short-term traders and hot money are different, I can make a lot of money in one band.
How to do it? The first is to gradually pull up. At this time, the technical indicators start to go well. When the technical people see the technical indicators, they are generally easily tempted to come in. In the meantime, I will pull up and sell at the same time. What needs to be controlled is to hand over the chips to them before the top divergence, so that they look like the technical indicators have not reached the top, and the currency price can rise higher. At this time, there will be a high fall on the second day, and then a sudden drop on the third day. They basically start to surrender. Without me, the currency price will go down. In the meantime, I will naturally set a good price to pick up the fruits, especially for hot money. I will pull up in the first half. When the hot money sees that the currency price is bullish, they will immediately flock in. In the second half, I will hand over some chips to them. On the second day, I will open low and go low. When the hot money sees that the momentum is not right, they will flee immediately. At this time, I will look at the number of fleeing and calculate my own results. If the number of fleeing is large enough, I will pull up in the afternoon, because most of the short-term customers have left, I don’t need to pay much profit, and it is easy to pull up the currency price. The difference between the two days is at least about 3% of the transaction amount. But if I find that I haven't walked much, I will continue to move down.
This is the whole process of operating a digital currency, which takes a few months or 1-2 years. Looking back now, many of the so-called cryptocurrency experts and analysts are packaged; the analysis reports they publish are also to cater to the market and get a salary. Real traders don't look at these at all. Now you understand why the price goes up when you sell and goes down when you buy? Because your behavior is consistent with that of most people. This is the fundamental reason why institutions can make profits!
The methods used by market makers in the pull-up stage are similar to those used in the climbing stage. They want to attract retail investors to participate actively, but they don’t want them to make too much profit. However, pull-ups are obviously much more aggressive than climbing. Retail investors actively support market makers in this stage, but they may not get rich returns. They may even suffer losses. This means they earn the index but not the money.
1. Helicopter lifting
The dealers who use this method to pull up the price generally have strong financial strength. They collect a large number of low-priced chips at low positions, achieve a high degree of control, and use extremely fierce operation methods. The dealer does not care about the threat of the remaining chips, so once the price rises, it will be unstoppable, and no pressure level can stop the upward momentum of the currency price. This can not only save money, shorten the time of pulling up, but also open up the upward space. On the daily K-line chart, there are often continuous large positive lines with daily limit (there is no limit on the price increase or decrease in the currency circle, which is manifested as a sharp increase), or continuous large positive lines, and continuous gaps and high openings leave gaps that are not filled in the short term, forming a wave of "blowout" market conditions. Sometimes after a short wash, a "second spring" straight-up market condition appears. In the process of pulling up, the trading volume is also enlarged simultaneously, but sometimes when it appears in the form of a gap-up surge, the trading volume is small, which shows that the dealer has a high degree of control over the market.
This method mostly appears in small-cap coins or coins with novel concepts, which usually have certain hype themes as support and high market attention. Coins that are directly raised are generally "dark horses" in the market, and investors are very eager to chase the rise. There are three ways for bankers to raise the price in this way: first, to raise the price rapidly and in one go, generate profits for the banker, and sell at a high price; second, to attract market attention, induce followers to intervene, and help raise the price; third, if there is major positive support, it can prevent news leakage or failure to raise the price in time, which will affect the profits of the banker.
This type of currency has a downturn before it is launched, and the trading volume shrinks. At this time, you should track and pay attention. When the price of the currency breaks upward with a large volume, or the price of the currency can be pulled up sharply with a very small trading volume and the buying is strong, you should immediately follow the dealer to enter. This is the best time to enter the market. If you don’t find it at this time or don’t have time to intervene, and then the price of the currency rises sharply as soon as it opens, and you can’t buy it at all, don’t worry. This kind of pull-up method is difficult for the dealer to complete the delivery task at a high level at one time due to its fast speed and large increase. Usually the currency price has a short process of falling back and consolidation, or maintains a platform consolidation trend at a high level, and then launches a second wave of pull-ups. If it is a fallback and consolidation, you can buy when the currency price falls back to between the 5-day moving average and the 10-day moving average; if it is a platform consolidation, you can buy when the platform breaks upward with large volume.
2. Band-type pull-up
This method often occurs in currencies with medium market value. It shows a very stable attitude in the market, is more easily accepted by investors, and can achieve the purpose of fueling the trend. Most dealers are happy to use this method. When this method is used to pull up the price, in the process of accelerating the price increase, due to the short-term pull-up speed being too fast, there are too many accumulated profit orders. Therefore, when the price of the currency rises to a certain height, the profit orders swarm out. The dealer has to release some of the profit orders, and after the price of the currency falls back and is fully washed and changed hands, the next wave of pull-ups will be carried out. A big wave is composed of many small waves, and there are waves within waves.
This method is usually used to wash the market during the upward process, especially in important resistance areas, to digest the resistance with a small return or sideways fluctuation, and complete the process of retail investors changing hands from low cost to high cost, so as to reduce the pressure during the upward movement as much as possible. Then, taking advantage of good news or a good market atmosphere, the price of the currency is raised by one band, and the center of gravity of the currency price continues to move upward. In the end, the price of the currency will break this rule, and there will be two results: one result is that an upward breakthrough is formed, and the price of the currency enters an accelerated upward stage; the other result is that the price of the currency is adjusted downward, ending the band-like upward trend.
The wave-like pull-up is in the form of a spiral upward, with one spiral, two spirals, and three spirals, but it is rare to see an example of more than four spirals. In addition, from the perspective of spiral time, there are short spirals, medium spirals, and long spirals, so investors should pay more attention. On the daily K-line chart, there are sometimes large ups and downs. When the currency price falls back, the yin and yang alternate, and large yin lines often appear. In terms of trading volume, the volume increases when it rises and decreases when it falls back.
The method used by the market makers to raise the price is to clear short-term profit chips during the rise, so that short-term retail investors will sell their chips when they see the coin price stagnate and fall. At the same time, some retail investors who did not buy the coin before and are optimistic about the coin in the long term will buy it at a low price when the market makers start to adjust. This will help the market makers to raise the price in the future, and the market makers will also adapt to the situation and join the ranks of selling high and buying low.
Of course, this method of raising the price also reflects some weaknesses of the dealer. It may be that the dealer is not strong enough, the degree of control is not high, and it cannot support the selling pressure of profit-taking. Therefore, it can only choose to take a step-by-step and steady approach to push up the price of the currency when the general trend is good.
Since the fluctuations of this method are more obvious, the operation rules are easy for retail investors to grasp, and it is easier to buy low and sell high. When the price of the currency rises and falls with a large volume, and closes with a long upper shadow line, a evening cross star, etc., retail investors can consider selling; after the price of the currency has been fully sorted out, when there is an obvious stop-loss signal, such as a large positive line with a large volume, a morning cross star, etc., retail investors can consider buying. Usually, the increase of the latter wave is approximately equal to the increase of the previous wave, and the difference is generally within 5%, which can be used as a reference. According to observational experience, the wave shape of the first 3 waves has a strong regularity and a high accuracy rate. The wave shape after the 4th wave has a low accuracy rate and may change the market, so it should be operated with caution.
3. Oscillating pull-up
After the dealer completed the position building plan, the price of the currency gradually left the bottom area and continued to fluctuate upward. The characteristic of the market is that the price of the currency is pushed up by up and down fluctuations. There is no obvious pull-up and smash-up action, the peaks and valleys are not clear, and there is no concentrated volume release process. Everything is in the process of pulling up, washing and sorting. The market trend is very gentle, there are few thrilling scenes, and the price of the currency rises unknowingly.
In this market trend, the dealer pushes up the price of the currency along a certain slope. On the intraday chart, there are a large number of buy orders below to show the dealer's strength and prevent the price from falling. Then, the dealer continues to push the price up, and sometimes deliberately suppresses it after a period of time. The fierce dealer also suppresses the price in a "diving" manner to attract buyers to buy at low prices, and then pull the price up again. On the daily K-line chart, there are small Yin and big Yang, two steps forward and one step back, and the price of the currency fluctuates upward.
The dealers who use this method to increase the price are generally strong, with a high degree of control over funds. The rising market often lasts for a long time, and the cumulative increase in the price of the currency is also relatively large. When shipping, there will often be favorable cooperation from the project party. The advantage of being a dealer is that it comes quietly and leaves without a trace.
There are roughly two phenomena in this market: one is straight-forward oscillation, where the price of the currency fluctuates frequently, the decline is not deep, the duration is not long, and no obvious waveform can be seen; the other is band-type oscillation, where the price trend is opposite to the straight-forward oscillation, and the market shows a band-type oscillation trend, the price decline is deep, the duration is long, and the peaks and troughs are clear.
The dealer's method is to constantly create up and down fluctuations in the process of raising the price. It is difficult for ordinary retail investors to have firm confidence in holding shares, and they are prone to clearing out profitable chips, while allowing coin holders to intervene. In this way, the chips are fully exchanged, and the long-term chips are locked, which reduces the pressure on the dealer to significantly raise the price of the currency in the future.
It is difficult for retail investors to operate in this market, especially for aggressive investors, who have fewer opportunities. It is difficult to grasp the rhythm of the currency price and it is difficult to predict the top of the currency price. When you buy at a high price, you are prone to short-term corrections. When you wait for the low point to appear, there is no obvious low point, and the currency price rises again. The buying opportunity is fleeting. It is difficult for retail investors to make a complete wave of market in this market. Once you are not careful, the effect and investment mentality will be very bad.
In this market trend, the dealer does not allow retail investors to make quick profits, but makes timid retail investors leave the market early through volatile rises. It is difficult for retail investors to dance with the dealer to the end without strong willpower, and this also gives off-market retail investors an opportunity to intervene. When retail investors encounter this situation, they should maintain a good attitude and not operate frequently. The small fluctuations during the rise are normal market phenomena. As long as there are no abnormal fluctuations in the market, the rising market will not end. However, when the price of the currency rises and falls, forming a peak K-line pattern or abnormal trading volume, attention should be paid.
Characteristics of main shipments
When the price of the currency does not rise when the form, technology, and fundamentals all require it to rise, this is a sign that the main force is about to ship out. There are many such examples in the currency circle. The form requires it to rise, but it does not rise; the technology requires it to rise, but it still does not rise; there are also cases where the expected good news is announced, the fundamentals require it to rise, but the price of the currency does not rise. These are all signs that the main force is shipping out.
There is a lot of good news. Various investment value analysis reports have appeared in various currency circle media and analysis platforms, which have been promoting the currency. Some so-called "great gods" have also recommended the currency. These propagandas are nothing more than trying to prove that the price of the currency is deviating from its value, and the price of the currency is seriously underestimated. If short-term investors pay close attention, they will find that most of these reports appear when the price of the currency doubles. There will be no such good news when the price of the currency just starts to rise. Too much good news is often a smokescreen deliberately released by the main force when they are thinking of retreating, in order to cover their escape.
When rumors about a certain coin are flying everywhere, it is also the time when the dealer is about to sell. The dealer spreads favorable rumors through the Internet. The reason why they choose to spread rumors on the Internet is that even if the news is false, they can be irresponsible and no one can be held accountable, and they can always make some investors believe that the rumors are true. The main force spreads these so-called insider information through some friends. Through these two means, more investors follow the trend. With a little effort from the main force, the follow-up buyers will flock in, and the main force can easily sell its holdings.
When the main force is about to ship out, it will always make a big noise, and the so-called "masters" will also say that the market will continue to hit new highs. In fact, this is a smokescreen to cover the main force's exit. In order to cover the retreat of the main force, the main force will often take out a part of the funds to seize some small-cap and favorable themes of the currency, and create a frenzy atmosphere of dark horses running wildly and currencies rising sharply every day, so that the investors who have exited the market will return to the market and capture the dark horses with high currency prices. In this way, it helps the main force stabilize the market and gives the main force more time to escape smoothly.
The main shipping methods commonly used:
1. Increase shipments
The main force often raises the price of the currency again after it has made a profit, making retail investors think that the price will continue to rise, thus successfully making retail investors take over and the main force completes the shipment. Small orders are used to raise the price of the currency, and large orders are placed after the price rises. There are rarely large orders on the top, and large orders often flash below far away from the selling orders. However, the actual transaction is often not the large order that takes the order, but the transaction in the air - the purpose is to create the illusion that there are many buy orders and active transactions, so as to lure the market to take over the dealer's selling orders.
2. Suppressing shipments
Suppressing shipments is a forced shipment method! This pattern indicates that the dealer has a strong desire to ship out - it is often related to the rush to cash out or the forced exit due to a broken capital chain. This pattern often opens quickly and then quickly drops, selling all the way, with large and small orders smashing down all the way, showing an undisguised and determined exit.
3. Zigzag shipment
The "sawtooth-shaped delivery pattern" is a gentle delivery method. The dealer builds a high-level platform to cultivate the market's psychological expectation of a "breakthrough" in the price of the currency. It is under this psychological expectation that the dealer unconsciously takes over the chips from the main force. The transaction volume is not large, and there are few large orders. The orders that are traded are mainly small orders (the main force splits them into small batches to the market). There are pauses in the middle, which resembles a "sawtooth", so it is also called a sawtooth delivery method.
First, the public opinion and the so-called "great gods" are definitely paying attention to the currencies with hot topics. In fact, speculating in currencies is betting on good news. Once the good news is made public, the dealer will take the opportunity to sell. Even if the topic is very good, retail investors have bought it, so who will make money? What's more, the topic can be artificially created. Second, the retail investors follow up on the currencies recommended by the "great gods". Seeing so much retail investors' funds rushing in, the dealers originally wanted to pull it up, but they didn't. They had to shake out the warehouse and drive away the retail investors before they were willing to pull it up.
Long-term consolidation currencies
Long-term consolidation and not rising or falling with the market means that there is no banker or the currency has been withdrawn. This kind of currency often has a huge surge in the previous period of history. Because there is no one to take care of the currency, it can only consolidate for a long time. It may also be because the following banker institution is trapped and cannot get out for a while, so it can only consolidate for a long time in a certain range. If there is an opportunity, it will pull up sharply, and if there is no opportunity, it will fall all the way. For this kind of banker currency that is more difficult to deal with, investors would rather give up a thousand than enter one, and should avoid it appropriately.
What is the difference between experts and retail investors?
What is the difference between experts and retail investors? From a macro perspective: first-rate experts use state of mind, second-rate experts use trend, third-rate experts use technology, and ordinary retail investors use confusion. People at the highest level talk about the state of mind. They don't look at anything, and they can make money by speculating on coins just by feeling. I say that first-rate experts have gone through the stage of confusion, through technology, and after the trend, they have reached a state of mind. People who use trends say that trends are invincible, and you can make money if you understand the trend. People who use technology say that if you don't believe in anything and learn the technology well, you can make money. However, many retail investors don't have their own methods or their own ideas. They listen to this or that, but in the end they don't know which one is better. They use everything, but nothing works well, and they only lose money in confusion.
There are five specific differences between experts and ordinary retail investors:
First, experts chase the undoubted rising trend and kill the unmistakable falling trend. However, many ordinary retail investors think they understand it and act before they think the price will rise or fall, which is often wrong.
Second, experts choose to wait and see when the market is uncertain and falling, and do not rush to operate. When the trend is clear, they quickly enter the market. However, many ordinary retail investors frequently operate and suffer continuous losses. If they encounter fierce main forces, the losses will be even greater.
Third, experts are good at shorting positions, and the time they short positions is much longer than the time they hold positions. However, ordinary retail investors basically hold full positions every day. If they don’t hold full positions for one day, they will feel uncomfortable and can’t sleep well at night. The next day, they will rush to hold full positions, as if they will lose the opportunity to make a lot of money if they don’t hold full positions.
Fourth, experts are good at waiting and waiting. They wait for the big opportunity to come, and then go all out, while ordinary retail investors do not wait, do not waste time, and work hard every day. If they do not move for a day, they will feel itchy. The principle of speculation first is deeply rooted in their bones, and going with the flow becomes a habitual behavior. They cannot hold back when there is a slight disturbance.
Fifth, experts have a higher level of market reading than ordinary retail investors, and are less likely to make mistakes than ordinary retail investors. Moreover, they react faster than ordinary retail investors to correct mistakes. It is not that they will never make mistakes, but they will not make excuses when they make mistakes.
These five problems all show that the skills and mentality of ordinary retail investors are not up to par. To solve these problems, you have to study, study, and study again; think, think, and think again, constantly improve your technical level and comprehensive quality, and build your own winning mentality in the cryptocurrency world.
Generally speaking, the fastest-profitable coin selection strategies include the following 8 points
First, you should choose stocks with high volatility and avoid stagnant stocks. Generally speaking, you should choose stocks with high elasticity in a bull market and stocks with strong resistance to decline in a correction market. The former is an offensive strategy in a bull market, aiming to gain more and faster returns; the latter is a defensive strategy, aiming to reduce the intensity of adjustments and reduce risks.
The second is to look at the bottom volume. There is a technique for speculating in cryptocurrencies, which is to look at the volume of stakes. The so-called volume precedes price. Looking at the volume cannot simply look at the transaction volume, but also look at the volume ratio and the degree of continuity.
Third, you need to choose a variety that has been thoroughly cleaned up with concentrated chips. For a currency, whether it is at the bottom or in a correction during an upward trend, when the volume shrinks to the limit, it is easy to rise quickly, and the concentration of chips is conducive to a rapid rise.
Fourth, you should choose varieties with large opening angles of moving average adhesion and rise. The varieties with strong attack power must be varieties with moving average adhesion, followed by upward bullish divergence and large openings. Generally speaking, the larger the opening, the faster the rise, but it should be noted that the best and most sustainable one should be 30-50 degrees. Although the opening speed is faster, the sustainability is often not strong.
Fifth, the market value should be moderate. For small and medium-sized investors, the funds are not too large, and it is not suitable to choose some slow bull varieties of large-cap currencies, unless there is no time to watch the market and do long-term investment. Generally speaking, it is better to choose mid-cap and below. If the market value is too large, the amount of funds required to pull it up will be large, and it is impossible to rise quickly.
Sixth, you should choose a currency that has accumulated enough momentum and can break through quickly. This is actually the most practical operation method and the most basic idea of currency speculation. The principle is very simple, but in actual operation, many investors either dare not enter, or are washed out after entering. They do not understand that there is usually a certain space for the currency to rise after accumulating momentum and breaking through. The longer the momentum is accumulated, the stronger the explosive power after the breakthrough.
Seventh, pay attention to the timing of intervention. For the same bull coin, the speed of rise is different in different stages. In the stage of the banker's accumulation of funds, intervention needs to be safe, but the rise is very slow and requires more time cost. The most clever method is to wait until the main force has completed the accumulation of funds and the full wash is over, and then intervene when the volume starts to rise. This is usually referred to as eating the fattest period.
Eighth, you need to find products with good expectations such as substantial or long-term themes or concepts or technological innovations or team benefits. Only such currencies will have reasons for continuous rise.
Why can’t retail investors hold onto their coins?
"Excellent investment must be an anti-human transaction." If you really understand this sentence and can do it, then you will be able to make money easily in the trading market.
When we buy a currency, our mentality must be bullish, and when the currency price just starts to fall, that is when we slowly begin to doubt our decision. When the currency price just starts to fall, we often choose to cover our positions, because the risk is within the tolerance range and the bullish mentality is still there. At this time, we often look for the reasons for the decline, hoping that the currency price will stop falling quickly, and we will continue to add positions when there is a big drop. When the currency price falls to a certain level and the funds in hand are getting less and less, many currency holders can only choose to lie flat. At this time, the mentality is already doubting whether the currency itself can still rise, and even has begun to plan to reduce positions in the rebound. At this time, the market often rises to a certain extent, and at this time, the idea of retail investors reducing their positions is particularly easy to implement, and selling seems natural.
The fundamental reason is that after being trapped by losses for a long time, people are looking for a sense of safety. This is a natural mentality and a normal transaction that conforms to human nature. There is nothing wrong with it. However, in the cryptocurrency market, this trading mentality is destined to be harvested by big funds, because big funds are ruthless and will not be affected by emotional fluctuations. They specialize in harvesting this type of retail investors.
Funds are not targeted at individuals, but only at emotions.
Many coin holders have a feeling that their accounts are being monitored, as if every move is under the eyes of the main force. The price drops as soon as they buy, and rises as soon as they sell. In fact, it is not the main force that monitors the account of a certain coin holder, but its opponent is the sentiment of the entire market.
70-80% of the coin holders have the same mentality. In other words, as long as the main force finds the emotions of this type of coin holders and grasps their trading mentality, they can easily stand on the opposite side and make money from this part. If you choose to sell, it will choose to buy. If you choose to buy, it will choose to sell.
When the main force finds that there are too many retail investors covering their positions, they will give you all the chips, and then continue to fall until the retail investors are flat and dare not cover their positions. When the main force finds that retail investors are not willing to sell when there is a rebound, they will continue to fall, torturing retail investors until they are willing to hand over their chips as soon as they see a rebound.
Retail investors are a collection, and the main force is an individual, and they will never win. In any trading market, the big fish eat the small fish. It's not that retail investors are not large enough to influence the market, but it's difficult for retail investors to influence their emotions, and it's even more difficult for them to unite and fight against the main force. It's natural for funds to use emotions to cut leeks.
There are many other common situations where people are exploited by others emotionally.
1. Intra-market fluctuations. When a currency fluctuates intra-market, it is actually the main force taking advantage of retail investors. During the ups and downs, if retail investors mostly buy, then there is a high probability that the currency price will end up with a sharp drop. If retail investors mostly sell because of panic, then after the fluctuation, the currency price will most likely rise instead of fall. Intra-market fluctuations mean that funds use the T+0 rule (some exchanges have this rule) to let retail investors make decisions. At the same time, the direction is chosen based on the overall reaction of retail investors. This is the most typical way to use emotions to cut leeks. The small number of coin holders who guessed correctly still think that their skills are extraordinary, but they don’t know that it is just because of good luck and standing on the right side. There are very few retail investors who can really understand market sentiment.
2. Buying high and selling low. Buying high and selling low is also the most common emotion. Behind buying high and selling low is the fear of missing out and the fear of being deeply trapped. The emotion of buying high and selling low is also easy to be exploited by the main force. When there are many people chasing the rise, the main force often sells easily. In the morning, it is still luring more investors, and in the afternoon it can plummet to show retail investors, causing the followers to lose more than 10% in one day. The same is true for selling low. The main force just takes advantage of the trend to do a round of washing, causing retail investors to panic and get off the bus. What should be bought high and sold low should not be the price of the currency, but the trend. The half-knowledge of retail investors makes themselves a meal for funds.
3. Bad news and good news. Another point is that both bad news and good news will be used by the main force. Bad news can suppress the price of the currency, or it can be interpreted as the bad news has been exhausted, and the price of the currency can be greatly raised. Similarly, good news can raise the price of the currency, or it can increase shipments. Therefore, how to interpret the good news and bad news itself is all determined by funds. And how funds are operated is actually based on market reactions and the operations of retail investors. When retail investors panic, funds buy greedily, and when retail investors are greedy, funds flee immediately. Capital really does a thorough job of using emotions to cut leeks, and it can be said that it is easy to do.
Fighting emotions is the only way out for retail investors
How do retail investors make money? Maybe many people will say that short-term depends on technology, and long-term depends on value. In fact, in essence, short-term depends on emotions, and long-term depends on value. Value itself is also emotional, just like a mainstream coin can be hyped to a very high price, and then fall back to a lower level. It is not its value that has changed, but the market sentiment that has changed. The coin is still the same coin.
Therefore, the long-term investment value also requires understanding of market sentiment. As for short-term trading, the so-called K-line technology itself is a reflection of market sentiment. How the main capital draws the K-line depends entirely on the overall market sentiment, whether there is capital following the trend, and whether there is market enthusiasm. It can be said that what you see and hear on the K-line is what the capital wants you to see, not a natural transaction formation.
The ultimate reflection of emotions is trading volume. Therefore, the rise and fall of any currency is ultimately written on the trading volume. Only with volume can there be price, without volume can only go downhill. The first step for retail investors to fight against emotions is to understand the trading volume and only participate when there is volume. The principle is very simple, the presence of volume means that there is capital in operation, and the absence of volume means that the capital has also abandoned the currency in the short term.
Why do short-term investors speculate on hot spots? Because only when funds gather together can there be a money-making effect. Even for long-term bull coins, value investment is actually accompanied by volume. During the consolidation period when the volume is low, it is necessary to continue to wait and see.
The second step for retail investors to fight against emotions is to set clear buying and selling conditions. Many people speculate in cryptocurrencies at will, buying when they want to and selling when they want to. The buying point is basically when the price of the currency rises sharply, and if you don't buy, it will take off. The selling point is basically when the price of the currency plummets, and if you don't sell, you will be deeply trapped. The emotion of chasing ups and downs is human nature, and it also stems from the collapse of retail investors' mentality and emotions under the drastic market fluctuations.
If retail investors want to fight against emotions, they must stop buying and selling at will and clarify their buying and selling points. There must be a clear principle for when to buy and when to sell. Decide before you hold a position and don't act on impulse.
The third step to fight against emotions is to know how to be patient and give up. There is another link in the mentality of retail investors, which is the weakness of human nature, that is, regret. You will regret why you did not sell at that time, which led to the decline of the currency price and the loss. You will regret why you did not buy at that time, which led to the soaring of the currency price and missed the opportunity.
Retail investors need to learn to be patient, and what they have to be patient with is floating losses. As long as the investment logic does not change, floating losses must be accepted. This is one of the situations that will definitely happen on the investment road. No one can buy at the lowest point.
Retail investors need to learn to give up. Giving up means missing out. As long as the currency does not conform to their investment logic, even if the price of the currency keeps rising, they should not follow the trend and buy it. They should know how to give up. Give up those increases that are not within their own cognitive scope.
Cold-blooded people are more likely to make money in cryptocurrency trading, because being emotionless is the only way to survive in the market.
Understand the trend first, then choose carefully
When retail investors make trading choices, they must understand the trend. This is the easiest way for retail investors to survive in the market. The reason why the more you cover your position during a decline, the more you lose is because the trend is downward, and you can't rush to cover your position. The reason for the rise is that you should hold and wait, instead of selling as soon as it rises a little, because the trend is already upward and has gone well, so there is no need to rush to sell.
Behind the formation of trends is the consensus of funds. Short-term price fluctuations are affected by emotions, which are difficult for retail investors to grasp. But behind long-term trends is the consensus of funds. Large funds have no emotions and will only make judgments based on the project itself. So behind the trend is actually rationality, not emotion. Following the trend is the most practical way.
The trend itself is also divided into short-term trend, medium-term trend and long-term trend, which vary according to the cycle. It is relatively easy for retail investors to catch the trend, and the longer the cycle, the more convenient it is. You only need to remember three points.
1. Trading volume. The so-called trading volume trend has been mentioned above. Relatively speaking, in an upward trend, the trading volume keeps growing. But it is only relative, because for a period of time, funds will choose to lock positions due to consensus, and it is not necessarily always enlarged. The same is true in a downward trend, because the quilt is passively locked, and it is normal for the trading volume to be sluggish. The volume trend reflects the trend of the currency price to a certain extent, and the two complement each other.
2. Currency price. The trend of currency price is actually the easiest to understand. If the currency price keeps hitting new highs, it is in an upward trend. If the currency price keeps hitting new lows, it is naturally in a downward trend. There are also some currencies whose prices are always lukewarm, which is a volatile trend. The overall trend of currency prices reflects the sentiment of funds and also reflects the possible direction of currency prices in the future.
3. Moving average. The last one is the moving average, which is also the most commonly mentioned trend line. Most trend lines use the moving average as a reference standard. The moving average itself reflects the average closing price of the currency over a period of time. The money-making effect must ensure that the currency price is always above the moving average. Therefore, the bullish divergent moving average forms an upward trend. Conversely, the bearish divergent moving average forms a downward trend. The short-term moving average represents the short-term trend, and the long-term moving average represents the long-term trend. From the short-term 5 days, to the medium-term 20 days and 30 days, to the long-term 120 days and 250 days, they are all portrayals of different cycles.
If you understand the trend, you can avoid short-term emotional fluctuations, and the probability of making money will naturally be much greater.
