Once you grasp trading in the cryptocurrency market, life feels enlightened! A few years ago, I stepped into the cryptocurrency world, and like most retail investors, my losses and profits seemed purely based on luck, and I couldn't grasp any patterns. However, after spending a few years in the cryptocurrency space, through continuous learning and absorption, along with mentors and peers sharing and guiding me, I eventually began to understand and form my own investment system!
I've been full-time in the cryptocurrency market for 10 years! My assets are in the tens of millions, withdrawing 100,000 from my account each month feels like no impact at all; I live leisurely and freely, without deceit or intrigue, enjoying the life I desire.
Before enlightenment, the journey is arduous; after enlightenment, it feels effortless.
The key to successful cryptocurrency trading lies in the integration of philosophy, mathematics, psychology, and the art of speculation!
(With a philosophical eye to observe the trend, with logical thinking to analyze the theme, with human insight into emotions, and with the art of speculation to master trading.)
The way of the cryptocurrency world requires a philosophical perspective to grasp the overall situation, which cannot be achieved through logic (with a philosophical eye to observe the trend); otherwise, mathematicians would have long been dominant.
You need to analyze themes with logical thinking, which cannot be glimpsed through human nature (analyzing themes logically); otherwise, psychologists would have already reached the top;
You need to observe emotions from a human perspective, which cannot be replaced by speculation (with human insight into emotions), otherwise, gamblers would have already run rampant;
Trading should be guided by speculative thinking, not philosophical reasoning (with the art of speculation guiding trading); otherwise, philosophers would have long been unmatched.
The journey in the cryptocurrency world requires the profundity of a philosopher, the rigor of a mathematician, the keen insight of a psychologist, and the wisdom of a skilled speculator!
Superb speculation is not something everyone can achieve. Only by continuously improving the level and depth of speculative thinking can one remain invincible in this intellectual contest.
A summary of common cryptocurrency names and classifications.
1. Classified by Status
1. Mainstream Coins (Blue Chip Coins)
- Bitcoin (BTC): The 'big brother' of the cryptocurrency world, with the highest market value and strong anti-inflation properties.
- Ethereum (ETH): The pioneer of smart contracts, the infrastructure for DeFi and NFTs.
- Binance Coin (BNB): The token of Binance exchange, used for fee discounts and participation in the ecosystem.
- Stablecoins (USDT/USDC): Pegged 1:1 to the US dollar, the first choice for hedging.
2. Altcoins - Imitation Coins:
Such as Litecoin (LTC, the lighter version of Bitcoin), Dogecoin (DOGE, a community culture coin).
- Functional Coins: Such as Cardano (ADA, third-generation public chain), Solana (SOL, high-performance chain).
- Pump-and-Dump Coins: No technology, purely speculative garbage coins (such as some MEME coins), with high risk of violent fluctuations.
3. Tokens
- Utility Tokens: Such as Filecoin (FIL, storage service), Uniswap (UNI, governance rights).
- Security Tokens: Such as Tether (USDT, stablecoin).
- Governance Tokens: Such as Aave (AAVE, participation in protocol decisions).
2. Classified by Function
1. Payment Type
- Bitcoin (BTC), Litecoin (LTC): Similar to digital gold, used for trading and storing value.
2. Smart Contract Type
- Ethereum (ETH), Solana (SOL): Support developers in building decentralized applications (DApps).
3. Privacy Type
- Monero (XMR), Zcash (ZEC): Anonymous transactions that protect user privacy. 4. Platform Type - Polkadot (DOT), Polygon (MATIC): Cross-chain interoperability or scaling Ethereum's ecosystem.
3. Classified by Market Popularity
1. Meme Coins
- Dogecoin (DOGE): Gained popularity due to memes, driven by the community.
- Shiba Inu (SHIB): Aimed at Dogecoin, with a very low price but extreme volatility.
2. DeFi Coins
- Aave (AAVE): Token for the decentralized lending protocol.
- Curve (CRV): Token for stablecoin liquidity mining.
3. NFT-related Coins
- MANA: Decentraland virtual land trading token.
- SAND: The Sandbox metaverse token.
4. High-Risk Coins (Proceed with Caution!)
1. Ponzi Coins: Such as Viacoin and Kleros, profit by recruiting others and ultimately running away.
2. Air Coins: No practical application, relying on speculation (like some coins newly listed on exchanges).
3. Fork Coins: Such as Bitcoin Cash (BCH), forked from the main chain, value depends on community consensus.
I rely on these 6 'dumb but steady' strategies; the truth no one tells you.
Without exaggeration or defamation, the most brutal aspect of the cryptocurrency world is that there are too many traps.
Understanding these 6 points ensures you lose less than 100,000.
If you can truly adhere to these three points, you've already outperformed 90% of retail investors!
① If it rises quickly and drops slowly, don't rush to escape.
Do you understand the main force's tricks? First, they spike to scare you, then slowly shake you out, waiting for those who ran early to cry for help.
Only those that 'spike in volume and plunge instantly' are traps for inducing buying and unloading; take profits once you see good results!
② If it drops quickly and rises slowly, don't foolishly bottom fish.
In the cryptocurrency world, there's no lowest, only lower!
A flash crash combined with a weak rebound is the deadliest trap; bottom-fishing usually results in losses.
Understanding this point immediately reduces the probability of significant losses by 70%.
③ If there's volume at the top, don't panic; no volume is truly dangerous.
If there's still trading volume at the top, it indicates the main force is still interested.
If the market is stagnant and volume is completely shrunk, then don't hold onto any illusions.
④ Don't rush when the volume increases at the bottom; it takes a few days to be reliable.
Don't get excited about volume spikes over a day or two; it could be a fish hook.
Only when there's a volume increase followed by a decrease over several days can it signal the main force building a position!
⑤ Volume reflects emotion; K-lines are just appearances.
Market sentiment is reflected in volume; the main force's entry volume cannot be hidden.
Staring at K-lines? You are already half a beat late.
⑥ The hardest wisdom is knowing when to stay out of the market.
Making money is easy; holding onto it is difficult.
Don't be greedy, don't gamble, and don't fear being out; living longer gives you opportunities to turn the tables.
I've encountered more traps than you can imagine.
But life is only one; you have to stay alive to have a chance to turn things around.
Brother, there are opportunities every day in the cryptocurrency market.
But do you have that calmness and judgment?
How can one survive unscathed in the dark?
Don't rush to run, don't rush to buy.
First, understand the rhythm, and proceed slowly.
Summarize a set of iron rules for trading cryptocurrencies:
1. Don't act impulsively during consolidation; wait for a breakout to enter.
When the market consolidates with fluctuations less than 3% for three consecutive days, I only use 30% of my position to test the waters. Once the price breaks through the 20-day moving average, I will increase my position to 50%.
Last year, BTC consolidated around 67,000 for 5 days; I followed suit and made a 15% profit after the breakout. Blindly placing orders during consolidation leads to the most losses.
2. When hot spots surge, immediately cut losses; don't be greedy.
When the coin price surges over 50% in a day and social media is flooded with posts, clear your position at the market open the next day.
Statistics show that this type of coin has an 83% probability of retracing within 72 hours. A certain MEME coin surged two years ago, I sold in time and avoided a 40% drop.
3. Don't rush to run during a gap up; wait for the overbought area to sell in batches.
When encountering a gap up with a trading volume that triples, hold your position firmly and wait for the RSI overbought signal to sell in batches.
When Ethereum was upgraded, I operated like this, yielding a 127% return. Many people sell after a 10% rise, missing the main upward wave.
4. On days with massive bullish candles, you must exit.
If the daily trading volume surges to over double the 60-day average, clear your position before the market close.
In 2023, a certain coin saw a surge in trading volume, I sold in time and avoided a 38% crash.
5. The 55-day moving average serves as a watershed; buy on bearish candles and sell on bullish candles.
When a small bearish candle appears online (drop of <2%), buy in; when a bullish candle appears offline (rise >3%), sell, combined with MACD golden cross, the win rate can reach 68%.
Using this method for ETH for six months yielded a 72% win rate. Don't operate in reverse; chasing highs and cutting losses is a rookie's taboo.
6. Don't chase highs or bottom fish; only act when the trend is clear.
Don't rush to sell if it hasn't surged, and don't rush to buy if it hasn't plunged.
Last year during the SOL correction, I waited to enter at a low point during the plunge, achieving a cost 8% lower than others and earning 10% during the rebound.
7. Buy in batches to lower costs and ensure steady profits.
Initially, don't exceed 20% of your position; buy 10% more for every 5% drop, and reduce your position for every 3% rebound.
This pyramid-style averaging down can reduce costs by 15%-20%. Even if you buy high, you can achieve small profits through additional purchases.
The secret to making money in the short term is to simply execute these 7 iron rules repeatedly.
Be patient and wait during consolidation, decisively take profits during surges, and hold steadily when trends arrive.
Now I watch the market for no more than an hour a day; risks are automatically filtered by these rules. What novices should learn is not complex indicators, but this foolproof discipline.
Remember: there are many market opportunities; the key is to have the patience to adhere to the rules. Stick to these 7 iron rules, and after 3 months, you'll find short-term profits are not as difficult as imagined.
Lastly, remember that although we are also speculating and trading coins, we are definitely not gambling with coins. In the midst of conflicting information, distill the essence, stick to your principles, and you will surely reap abundant rewards. This is the trading experience the instructor shares with you today. Many times, you lose many opportunities to make money due to your doubts. If you don't dare to try, reach out, and understand, how can you know the pros and cons? Only by taking the first step will you know how to proceed next. A warm cup of tea, a piece of advice; I am both a teacher and a friend you can confide in.
I am Xiao Yan. After experiencing multiple bull and bear markets, I entered the industry three years ago, mastered it in five years, and dominated for ten years. I possess rich trading experience across various fields in the cryptocurrency world. Follow me, Xiao Yan, to clear the fog of information and gain insight into the real cryptocurrency market. Seize more opportunities for wealth growth and discover truly promising coins; don't miss out on great opportunities!
