A delivery guy from Zhejiang entered the cryptocurrency space with 500 USD and in just over a year turned it into 60,000 USD, surpassing his ten years of savings from delivering packages. His life began to take off, turning a few thousand into four to five hundred thousand, a more than one hundredfold increase—truly enviable.
Turning 500 USD into more than 60,000 USD also stimulated me, making me want to genuinely enter the cryptocurrency space.
If you want to trade cryptocurrencies for a lifetime but don't understand the technology and can't find a suitable trading method, you might as well try this 'foolproof' operation from my friend, simple and practical.
If you haven't found a method, it can indeed be very difficult, but if you get the method right, you'll find that making money is so easy. The method I share today is actually very simple; even if you are a novice in the cryptocurrency space, just strictly following this method can also lead to easy profits.
Candlestick practical strategy is the simplest and most practical short-term profit method.
Today, I will share the 5-day moving average strategy. The 5-day moving average strategy is one of the essential skills for short-term trading and swing trading; it is also the simplest and most practical short-term strategy, which is equally applicable to contracts.
Let's first talk about what the 5-day moving average is.
The 5-day moving average is actually the 5-day moving average line, which refers to the average transaction price of a coin over five days, abbreviated as MA(5). Sounds simple, right?
The 5-day moving average, also known as the 5-day moving average line, what is a moving average?
Moving averages refer to the moving average lines that reflect the average cost of holding coins by the public over a period of time, and can also reflect the strength and trend of coin prices. The moving average indicator is the simplest and most practical technical analysis indicator, and because of this, investors can easily master it.
Simplicity is often the most practical, and simple things can bring unexpectedly high returns to investors.
The method of setting the 5-day moving average is basically similar across different trading platforms. Below, I will explain how to set the 5-day moving average using Huobi as an example.
If you feel too confused, you can click the × in the second yellow box in the picture above to remove the 10-day, 30-day, and 60-day moving averages and only display the 5-day moving average. This way, the chart looks simpler.
How to use the 5-day moving average strategy?
The 5-day moving average actually represents the average holding price of players in the cryptocurrency market within five days, which is psychologically bearable and serves as a short-term emotional window.
Therefore, every time the coin price touches the moving average, there will be a rebound or an accelerated drop. This represents support or resistance levels.
In general, it can be considered that in an upward trend (bull market), when the coin price pulls back to the 5-day moving average, it is an opportunity to add to positions; it is an opportunity for long positions.
In a downtrend (bear market), when the coin price rebounds to the 5-day moving average, it is an opportunity to reduce positions; it is an opportunity for short positions.
The principle of simplicity is very practical for investors with little technical background.
The rise or fall of coin prices generally runs along the trajectory of the 5-day moving average, which can be divided into three trends: rising, falling, and flat.
Using the 5-day moving average strategy to determine buy points:
1. When the 5-day moving average gradually flattens and slightly turns upwards while the coin price breaks above from below the 5-day moving average, a bullish candle clearly breaks through the 5-day moving average, this is considered a buy point, and contracts can be bought for long positions.
2. When the coin price is above the 5-day moving average, and after a pullback it drops below the 5-day moving average and then rises again with a clear bullish candle above the 5-day moving average, this is considered a buy point. At this time, contracts can be bought for long positions.
3. When the coin price is above the 5-day moving average, and after a pullback it drops below the 5-day moving average but the short-term 5-day moving average continues to trend upward, this is considered a buy point. At this time, contracts can be bought for long positions.
Using the 5-day moving average strategy to determine sell points.
1. When the coin price is above the 5-day moving average, after several consecutive days of large increases, the distance from the 5-day moving average becomes greater; similarly, the principle of extremes must be reversed. Recently, investors have made substantial profits, and selling pressure from profit-taking may occur at any time. This is a reference point for selling. Contracts can be sold short at this time.
2. When the 5-day moving average gradually flattens after rising, and the coin price breaks below the 5-day moving average from above and hovers around the 5-day moving average, it indicates that selling pressure is increasing. This is considered a sell point. Contracts can be sold short at this time.
The 5-day moving average strategy is the most suitable short-term technique for beginners to learn and master; even those with no foundation can quickly get started because...
With a simple moving average quantitative indicator, we can overcome our psychological panic and greed.
In the trading process, technology is not the biggest enemy; the biggest enemy is often one's own inner greed and panic.
Candlestick analysis is one of the important indicators for judging Bitcoin's rise and fall and is a crucial signal for buying and selling.
Mnemonic 1: Don't sell on high, don't buy on a dip; don't trade during sideways consolidation.
Mnemonic 2: Buy on bearish candles, sell on bullish candles; act contrary to the market, and you will be a hero.
Mnemonic 3: Wait a moment after high and low consolidations.
Mnemonic 4: After high consolidation, push up quickly; after low consolidation, it's a good time to buy in fully.
Mnemonic 5: Acknowledge mistakes before taking action; better to buy less than to buy more. Investing requires caution!
The secret has been given to everyone; whether you can become famous in the circle depends on yourself.
In the cryptocurrency space, achieving financial freedom and class leap, I have summarized 10 trading tips. Understand one, and you can achieve stable profits, worth repeated study:
1. Two-Way Trading: Suitable for both bull and bear markets. Two-way trading is currently the most common trading method; it allows operations based on the market trends, allowing for both long and short positions. As the year-end approaches, a series of discounts and benefits have been launched, such as a 20% increase in investment returns, which is indeed a great boon for investors.
2. Coin Accumulation Method: Suitable for both bull and bear markets. The accumulation method is the simplest yet the hardest strategy. It is simple because after buying one or several coins, you hold onto them without trading for six months to a year. Generally, the minimum return is tenfold. However, newcomers often see high returns or encounter a price crash and plan to switch coins or exit; many find it hard to stick to not trading for even a month, let alone a year. Hence, this is actually the hardest part.
3. Bull Market Dip-Chasing Method: Only suitable for bull markets. Use a portion of idle funds, preferably no more than one-fifth of your total capital. This method is suitable for coins with a market cap between 20 and 100 because they typically don't get stuck for too long. For instance, if you buy the first altcoin and it rises by 50% or more, you can switch to the next coin that has dropped sharply, and continue this cycle. If your first altcoin gets stuck, just wait; bull markets will definitely free you from being stuck. The premise is that the chosen coins should not be too risky; this strategy is not easy to control, and newcomers need to be cautious.
4. Hourglass Switching Method: Suitable for bull markets. In a bull market, basically any coin you buy will rise; funds flow like a giant hourglass slowly seeping into each coin, starting from large coins. There is a clear pattern in the rise of coin prices: leading coins rise first, such as BTC, ETH, DASH, ETC, and then mainstream coins like LTC, XMR, EOS, NEO, QTUM, etc. After that, coins that haven't risen will rise collectively, such as RDN, XRP, ZEC, etc. Finally, various small coins will take turns increasing. However, if Bitcoin rises, you should pick the next level of coins that haven't yet risen and start building positions.
5. Pyramid Bottom-Fishing Method: Suitable for predicting major drops. The bottom-fishing strategy is to place orders at 80% of the coin price for one-tenth of your position, at 70% for one-fifth of your position, at 60% for one-third of your position, and at 50% for one-fourth of your position.
6. Moving Average Method: You need to understand some basics of candlestick charts. Set the indicator parameters to MA5, MA10, MA20, MA30, MA60, and choose a daily chart. If the current price is above MA5 and MA10, hold steady. If MA5 falls below MA10, sell the coin; if MA5 rises above MA10, buy and build a position.
7. Aggressive Accumulation Method: Focus on coins you are familiar with; it is only suitable for long-term quality coins. Have a certain liquid fund; if a coin is priced at 8 USD, place an order to buy at 7 USD. When the buy order is successfully executed, place an order to sell at 8.8 USD. The profit is used to accumulate coins. Withdraw the liquid funds and wait for the next opportunity. Adjust dynamically according to the current price. If there are three such opportunities in a month, you can accumulate a lot of coins. The formula is: buy price equals current price times 90%, sell price equals current price times 110%!
8. ICO Reinvestment Method: Continuously participate in ICOs. When a new coin increases by 3-5 times, take out the principal and invest in the next ICO. Keep the profits and cycle continuously.
9. Cyclical Band Method: Look for coins like ETC that are in a downtrend. When the coin price continues to fall, add to your position, and when it falls further, add more. Then wait for a profit and sell, continuing the cycle.
10. Small Coin Aggressive Play: If you have 10,000 RMB, divide it into ten parts and buy ten different types of small coins, preferably under 3 RMB. After buying, do not pay attention. Don't sell until it triples to five times; if it is stuck, do not sell; just hold on for the long term. If a coin triples, take out the principal of 1,000 RMB and invest in the next small coin. Then the compound returns will be impressive!
Meeting is fate, knowing is parting. Brother Bo believes that if there is destiny, we will meet even if we are a thousand miles apart; if there is no fate, we will brush past each other by heaven's will. The journey of investment is long; momentary gains and losses are just the tip of the iceberg. Remember that even the wisest will make mistakes, and even the most foolish can have gains; regardless of emotions, time will not stop for you. Pick up your worries and stand up to move forward.
I only trade in real markets; if there are positions available in the trading team, speed up to get on board.
