I spent 10 years building a starting capital of 300,000 earned from crypto trading, during which it fell to only 60,000 at its lowest point, but I managed to use the simplest methods to grow it to tens of millions. The most intense wave increased from a base of 400 times in just 4 months, directly reaching 40 million!
Does it sound like a joke? But behind this is over 3,000 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 with the simplest methods, while friends in the crypto circle do not lack good coins to choose from, but tend to overthink!
Whether in a bull or bear market, whether you are a novice or an experienced trader, as long as you effectively apply these [10 iron rules of cryptocurrency trading], achieving 30 times returns in a month is not a fantasy!
Iron Rule 1: Identifying trend reversal signals.
In a downtrend, if three or more consecutive bullish candlesticks rebound, or if a pullback in an uptrend does not exceed three consecutive bearish candlesticks, this is likely to be a warning signal for a trend reversal, and must be closely monitored.
Iron Rule 2: Guidelines for trading breakouts.
In a volatile market, a later price increase with a volume increase often precedes a major breakout. Operationally, you can buy on dips and wait for two bullish volumes to exceed the previous bearish volume to take early action and seize the opportunity.
Iron Rule 3: Strong market holding strategy.
The holding strategy for a strong market is simple: as long as the daily line does not fall below the rising moving average, hold firmly. Do not be disturbed by technical indicators, especially when in a high position to avoid getting off too early.
Iron Rule 4: K-line combination analysis techniques.
A medium bullish candlestick combined with two doji candlesticks is usually a sign of a continuation in an uptrend, which is also a typical bullish pattern for strong coins. Once discovered, you can actively follow up.
Iron Rule 5: Unconventional market psychology.
The market often contradicts the views of the majority. The smoke bombs released by major players and market tops often appear when everyone is optimistic, so always maintain independent thinking and contrarian thinking.
Iron Rule 6: Key points for using the KDJ indicator.
When encountering consecutive large bearish candlesticks, and the KD line is below -12, it indicates that a short-term rebound is imminent. At this time, do not rush to operate; wait for the rebound to appear and then make a judgment to avoid blindly bottom-fishing.
Iron Rule 7: Key features of breakout bullish candlesticks.
When breaking upwards, a bullish candlestick turnover rate of about 8% is considered a healthy attack volume. If the turnover rate is too high or too low, it may trigger a pullback, so caution is needed.
Iron Rule 8: Core principles of risk control.
Never operate with a full position; always leave room. Market risks are everywhere, and acting cautiously allows you to have room for error correction and to protect your capital.
Iron Rule 9: Emotion regulation is essential.
When trading cryptocurrencies, maintain a calm and rational mindset, and treat market fluctuations appropriately. Never let emotions dictate your decisions; a stable mindset allows you to go far.
Iron Rule 10: Learning, communicating, and growing.
Don’t work in isolation; communicate and share with other traders. Even if the other person's opinion is wrong, it is valuable experience on your growth path. Everyone's progress together can lead to steadier gains in the crypto circle.
The above 10 iron rules are all validated by my real capital in the market. I suggest everyone read them repeatedly and remember them. I believe that as long as they are practiced proficiently, your cryptocurrency trading level will certainly improve dramatically!
These valuable pieces of advice are the crystallization of years of practical experience and are worth our careful consideration and strict adherence. I hope these suggestions can help everyone avoid detours in the market and steadily progress toward success.
Today's focus is on a set of trading strategies that are both simple and highly effective—Three White Soldiers + K-line 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, indicating that a price reversal may occur soon.
Since the Three White Soldiers pattern is a bullish reversal pattern, we hope to see a price decline before this pattern appears, making it a common signal for the end of the 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 image of the 'Three Black Crows' pattern.
Methods to identify the 'Three White Soldiers' pattern on the chart are as follows:
◎ Three consecutive bullish candlesticks.
◎ A larger body.
◎ The shadow should be small or nonexistent.
The 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.
Additionally, 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.
Variations of the Three White Soldiers candlestick pattern.
Of course, the Three White Soldiers candlestick pattern may appear differently on daily trading charts.
You may notice a significant gap between the closing price of one candlestick and the opening price of the next, causing them to start from within each other.
You will often see the candlesticks gradually becoming 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, it is not enough to simply find the same shape on the chart.
What makes the pattern effective is not just the shape, but also its position of appearance. This means that the same shape appearing in different positions may imply different meanings.
When trading the Three White Soldiers, we want to first see the price decline, forming a bearish trend.
The Three White Soldiers pattern appearing after this 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?
It's simple: when the high of the last candlestick is broken, you can enter the trade.
This is the trigger for you to adopt a conservative bullish strategy, as illustrated below:
Regarding stop loss, we can set it below the first candlestick of the Three White Soldiers pattern.
Additionally, to improve accuracy, we hope 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 zones, which can help you identify potential reversal areas.
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 stochastic indicator are below the oversold region. This confirms the candlestick pattern and provides additional signals for the upcoming trend reversal.
In the example above, the trader will establish a long position after the completion of the third bullish candlestick, setting the stop loss at the lowest level of the first candlestick or below it. The take profit should be set at the highest level of the previous bearish trend candlestick.
Additionally, you can use RSI divergence for trading the Three White Soldiers pattern. This is somewhat different from other trading strategies.
To find a bullish RSI divergence, we first want to see the price in a downtrend, forming lower lows and lower highs.
Operational steps:
◎ Find a downtrend.
◎ Mark the lows formed after each decline.
◎ Compare the low points of the price with the RSI indicator.
When you see the RSI forming higher lows, while the price forms lower lows, you have found divergence.
◎ Wait for the Three White Soldiers pattern to appear at a lower low in price, aligned with higher lows 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 possible support or resistance areas and determine whether a trend reversal might occur.
Fibonacci shows the retracement levels where prices often reverse. Depending on the strength of the trend, the effectiveness of different levels combined with the Three White Soldiers pattern may vary.
Steps for operation:
◎ The market is in an uptrend.
◎ Then wait for the decline.
◎ Use Fibonacci tools to draw levels from the low to the high of this price wave.
◎ When the price reaches the Fibonacci level and the Three White Soldiers pattern appears, this is the signal to wait.
◎ Go long when the price breaks above the high of the third candlestick in the Three White Soldiers.
◎ 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 level of the previous trend to the highest level (as shown below).
Then, once the Fibonacci retracement levels are drawn, you can zoom in and look for entry levels. Additionally, you can use Fibonacci to find stop loss positions and take profit targets.
In the above example, the entry point will be the closing price of the third candlestick (because the market 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 below one of the Fibonacci levels.
Strategy 3: Trade the Three White Soldiers using moving averages.
Moving averages are excellent indicators for trend trading. When the price is in an uptrend, it often retraces towards the moving average.
Operational steps:
◎ Find an uptrend where the price jumps 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.
◎ 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 internationally renowned trader Thomas N. Bulkowski, written in the (Encyclopedia of Candlestick Charts)
(Encyclopedia of Candlestick Charts), 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 three-candlestick pattern.
To ensure its validity, it must appear after the price decline.
This is a bullish reversal pattern, indicating a potential upward reversal in price.
To improve accuracy, you can use RSI, moving averages, and other trading indicators to trade the Three White Soldiers.
The success rate of the Three White Soldiers candlestick pattern is 84%.
It is important to note that no trading strategy is foolproof. Sometimes, while using a strategy, you may encounter significant market changes, and the market begins to develop with strong momentum.
To ensure you can bear appropriate risk, please lock in profits appropriately when the trend is in your favor. Remember to always test these strategies or indicators in simulated trading.
In cryptocurrency trading, avoid loss aversion and frustration. Trading should be disciplined, without emotions, without 'what ifs', without fear, and without greed. Behind all operations, there should only be whether it should be done and whether it was done. Emotional traders do not succeed in trading. Be calm and steady.
