On that thunderstorm night three years ago, I stared at the last string of zeros in my contract account, with 6 million capital evaporated, and liquidation notices piling up like snowflakes on the table. As I stood on the edge of the balcony, my phone suddenly buzzed with a message: 'True trading is understanding the language of price itself.' Looking back now, it was this sentence that pulled me back from the abyss.
After thousands of days and nights of review, I finally understood: 90% of blow-ups in the crypto world are not defeated by the market but by the superstition of the 'indicator holy grail'. When I completely deleted all MACD and RSI from the K line chart and traded only naked K, my account curve finally showed a stable upward slope for the first time. Today, I break down this price action trading system into three steps, each step infused with lessons learned from real money.
First realm: Understanding market structure, letting the market tell you the direction.
The root cause of blowing up in 3 days was that I was always holding positions against the trend. At that time, looking at charts was like reading an ancient script; I chased after rises and bought the dips without ever thinking about first judging 'where the market is heading'.
The core of market structure is tracking the arrangement of peaks and troughs:
Bullish trend: Continuously creating higher highs (HH) and higher lows (HL), climbing step by step like going up stairs.
Bearish trend: Continuously forming lower lows (LL) and lower highs (LH), descending step by step like stairs.
Choppy market: Highs and lows repeatedly oscillate within the same range, with no clear direction.
During last year's rise of BTC from $30,000 to $120,000, there were 11 pullbacks exceeding 15%. Those who died in the pullbacks failed to understand: each pullback formed a low point (HL) that was higher than the previous one, which is a typical characteristic of a bullish trend. I once shorted at $45,000, mistakenly treating a pullback as a reversal and ignoring the arrangement pattern of HL.
Practical mindset: Spend the first 5 minutes of each trading day connecting the last 3 peaks and troughs with straight lines on the daily chart. If the line slopes upward, only go long; if it slopes downward, only go short; if it’s sideways, simply stay out — this is more life-saving than any indicator.
Second realm: Locking in turning points and placing orders at the position where 'smart money' enters.
After reviewing post-liquidation, I found that 80% of my entry points were in the 'price wilderness' — neither at support or resistance levels nor relying on trend lines. It's like a fisherman casting nets where there are no fish; no matter how diligent, it's futile.
True high probability nodes often meet two conditions:
Horizontal level resonance: Previous dense trading zones (support/resistance), for example, ETH had 3 rebounds at $2,000, making it strong support.
Trend continuation point: In a bullish trend, retracement occurs near the previous HL; in a bearish trend, it rebounds below the previous LH.
The market of Arbitrum (ARB) in February this year was classic: Three troughs (HL) formed at $1.2, and a long lower shadow appeared after the third touch, which was a signal for trend continuation. I entered the market at $1.3 and finally exited at $2.8 — the entire process used no indicators, relying only on structure and nodes for judgment.
Pitfall guide: Stay away from ambiguous ranges. If a support level is repeatedly broken and then reclaimed, it indicates a significant divergence between bulls and bears; entering at this time is like dancing in a minefield. Last June, I went long near SOL's $20 because this position was neither a key support nor in the midst of a range, ultimately leading to a stop loss.
Third realm: Waiting for signal confirmation, letting the K line tell you directly 'It's time to enter the market'.
The most torturous part is not determining direction, but controlling my hands. In the past, I always placed orders when I 'felt it was going to rise', but forgot to ask: Has the price really started to move?
The signal of naked K trading is essentially 'the manifestation of capital attitude':
Bullish signal: A long lower shadow (hammer) appears after a drop, with the closing price higher than the opening price, indicating buying interest at low levels.
Bearish signal: A long upper shadow (shooting star) appears after a rise, with the closing price lower than the opening price, indicating sell orders are emerging at high levels.
In March, when ETH was at $3,800, two consecutive long upper shadows appeared, which is a typical bearish signal. I suppressed the impulse to go long, waiting for signal confirmation, and eventually shorted at $3,500, earning a 15% profit in 3 days. This reminded me of my operations before the blow-up: seeing a big bullish candle and chasing it, but not noticing two shooting stars followed — at that time, I couldn't read K line warnings at all.
Advanced technique: Signals must match the structure. Bullish signals must appear near HL, while bearish signals must fall below LH; otherwise, it's a 'false signal'. In May this year, I saw a hammer line at $300 for BNB, but the market structure was bearish (LL arrangement), so I gave up on going long. Later, BNB indeed dropped to $250.
Three survival rules for professional traders (lessons learned at the cost of 6 million).
Leverage is a double-edged sword, even a butcher's knife: I used 10x leverage during that blow-up, and a 3% fluctuation triggered liquidation. Now, even when I see the correct direction, I only use 2x leverage — living longer allows me to wait for big opportunities.
Setting a stop loss is not admitting defeat, it's a lifeline: Before placing each order, first calculate the stop loss level, allowing a maximum loss of 2% of capital. Last year, I misjudged the trend on STARK, exited with a 5% stop loss, and although I lost money, I preserved the capital for a comeback.
Being in cash is also a part of trading: In a choppy market, I once had a record of not placing any orders for 12 consecutive days. Just like a fisherman wouldn’t go out to sea during a typhoon, a true expert knows how to fold up their nets when the market is chaotic.
The biggest detour from being heavily in debt to achieving financial freedom was once thinking that trading required complex indicators and profound theories. It wasn't until now that I understood: the K line itself contains all the information; those fluctuating prices are telling us in the most straightforward language what we should do.
The fairest place in the crypto world is that the market shows the same chart to everyone; the difference lies in who can understand its language. When you can read naked K like reading a newspaper, profit will become a natural result — this is not metaphysics, but an instinct honed after thousands of reviews.
Finally, I'll give a piece of advice to traders still struggling: The market is always there, but capital is limited. Learning to net in during storms allows you to return loaded when the sun shines.
Blindly going solo will never bring opportunities; follow Super Brother, and I will guide you to explore tenfold potential coins! Top-tier resources!
