I have been trading cryptocurrencies for 8 years, starting with 50,000. Now I rely on trading to support my family! I can say that I have used 80% of the methods and techniques in the market. If you want to treat trading as a second career to make a living, sometimes listening and observing more can help you discover things beyond your understanding, which can save you at least 5 years of detours!
How to determine if a cryptocurrency has broken through? You can approach it from four aspects: volume, price, time, and space.
1. Volume: Before the troops move, the supplies must be in place. In the early stages of a trend formation, an increase in volume is essential, especially the first increase in volume after a long period of consolidation. We need to pay close attention to this, but it's not the best entry point. Generally, after a trial market pullback and the main players finish their washing, the second increase in volume followed by a rise is where we find our real opportunity.
2. Price: Generally, we look at the closing price. Regardless of the ups and downs during the process, if the closing price can stabilize, it indicates that the main players are serious! This is the key to distinguishing between a true and false breakthrough. In summary, if the closing price is above the resistance level, the probability of a true breakthrough increases significantly.
3. Time: Before a breakthrough occurs, it’s best if the cryptocurrency has undergone a long period of low-volume consolidation, lasting more than 3 months, with a chip concentration of less than 10%. Only then can the main players accumulate enough shares, allowing for a stronger explosive rise later.
4. Space: It's important to identify key resistance levels. These resistance levels could be the starting point of previous volume adjustments, the neckline of a W-bottom or head-and-shoulders bottom, or the round numbers of the cryptocurrency price. As long as the resistance level is clear, once the cryptocurrency price breaks through, the potential for price increase can also be easily assessed.
The above four dimensions are the foundation for judging horizontal breakthroughs. To deepen everyone's understanding, I have decided to share some of my personally written cryptocurrency trading notes that I have treasured for many years. Each summary contains the essence formed from countless days and nights of reviewing the market.
Giving someone a rose leaves a lingering fragrance in your hand. I will share valuable insights periodically!
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