A post-00s cryptocurrency prodigy from Shanghai, now earning a seven-figure monthly income and an eight-figure annual income. Not only is she beautiful and principled, but her skills are impressive, representing the new generation of post-00s. She is also a long-time friend of mine in the crypto space. Recently, we talked about her glorious history; she spent five years in the crypto space learning and practicing. She said making money is too easy, and many people think too complicatedly. You just need to master the simplest candlestick patterns and trade. Her win rate is as high as 85%, achieving a perfect record.
Through my own practice, the win rate is as high as 80%. I have organized it over the past few days and now share it with those who are destined to learn and master it together.
This is the stage and time cycle of bull and bear markets in the crypto space over the years: from four stages—bear market, pre-bull market, bull market, to big bull market—each time period has astonishing price increases, clearly containing opportunities!
The cyclicality of Bitcoin is very strong. Here is a diagram for reference.
As shown in the figure above, the three halving cycles in history (2012, 2016, and 2020) all led to significant bull markets.
The wealth code for a monthly income in the seven figures and an annual income in the eight figures: by mastering candlesticks, trading upon seeing patterns, with a win rate of up to 100%.
In the digital currency market, technical analysis is a very important indicator for predicting short-term market trends, commonly referred to as candlestick charts.
Whether you believe in or advocate technical analysis, understanding candlestick charts is essential.
Not understanding candlesticks and randomly investing is a big taboo in the crypto space! Excluding technical chart patterns, indicators, and the technical issues of bull-bear battles, basic information such as a cryptocurrency's price trend, trading volume, lowest point, and highest point can all be reflected in the candlestick chart.
What is a candlestick?
The candlestick chart is a required course for entering all secondary markets. We also call candlestick charts candle charts; it originated in Japan during the Tokugawa shogunate, invented by Honma Monju, initially used to record rice market trends, later introduced to the stock and futures markets due to its detailed and unique depiction method. Through candlestick charts, we can see the opening price, closing price, highest price, lowest price, and changes in rise and fall over a certain period.
What is the use of looking at candlestick charts?
It can help you develop better investment strategies and guide you in choosing the best times to buy and sell. For believers in accumulating coins, it is also necessary to understand this, as most trading interfaces of major exchanges are occupied by candlestick charts. Not understanding them makes it difficult to fit in the crypto space.
What information can be obtained from the candlestick chart?
Through the candlestick chart, you can see price trends during specific periods (30 minutes, 1 hour, 1 day, 1 week...), including opening price, closing price, highest price, and lowest price. You can also see the intense battle history between bulls and bears.
Highlight.
Composition of the candlestick chart.
The main components of a candlestick chart are two: bullish line and bearish line.
Each candlestick represents four prices for the day: highest price, lowest price, opening price, and closing price. The part between the opening price and closing price is drawn as a 'rectangular body', and the lines connecting the highest and lowest prices form the candlestick.
When the closing price is greater than the opening price, the bar is green, and the price rises; we call this a bullish line.
When the closing price is lower than the opening price, the bar is red, and the price declines; we call this a bearish line.
Most exchanges and analysis software in the crypto space use green to represent bullish lines and red to represent bearish lines. Generally, bullish lines represent the bulls (buying), and bearish lines represent the bears (selling). The stronger side will have corresponding candlesticks appear in the candlestick chart.
Taking the daily chart as an example: if the buying power today is greater than the selling power, then today's candlestick in the daily chart will be a bullish line (green bar). Conversely, if a bearish line (red bar) appears, it indicates that the selling power is stronger.
Note: In the Chinese stock market, bullish lines are red, and bearish lines are green; in some patterns, bullish lines may also be represented as solid bodies while bearish lines are hollow.
What is a shadow line?
The shadow line is the fine line above and below the bar, representing the difference between the highest and lowest prices of the day and the closing price. The longer the shadow line, the greater the resistance. A longer upper shadow indicates greater resistance to upward movement, while a longer lower shadow indicates greater resistance to downward movement. Regardless of whether it is a bearish or bullish line, the straight line protruding upwards from the bar is collectively referred to as the upper shadow line, while the straight line protruding downwards is referred to as the lower shadow line.
What is the battle between bulls and bears?
Bulls and bears are two factions; bulls represent the green faction, and bears represent the red faction. The two sides have different views: bulls believe prices will rise, while bears believe prices will fall, leading to frequent battles. The green faction consists of those who are bullish on prices and will buy to push prices up, while the red faction consists of those who are bearish on prices and will sell to drive prices down.
In every time period, battles will occur. If the bear army wins, prices will fall, and the candlestick chart will show red; if the bull army gains significant advantage, it indicates strength, and the candlestick's body will be larger; if the green side's resistance is weak, it indicates that the resistance to the red side is minimal, and the candlestick's shadow will be short.
Small bullish star, small bearish star.
A. Small bullish star:
Represents a small fluctuation in price throughout the day, with the opening price very close to the closing price, and the closing price slightly higher than the opening price.
The appearance of the small bullish star indicates that the market is in a chaotic and unclear stage, making it impossible to predict future price movements. At this time, one should comprehensively judge based on the shape of the previous candlestick combinations and the price area.
B. Small bearish star:
The chart of the small bearish star is similar to that of the small bullish star, but the closing price is slightly lower than the opening price, indicating a weak market with an unclear direction.
Small bullish line, small bearish line.
C. Small bullish line:
Its fluctuation range is small, with the bullish star increasing slightly, indicating that the bulls have a slight advantage, but upward momentum is weak, making market development unclear.
D. Small bearish line:
Indicates that the bears are exerting pressure, but the strength is not great.
Solid bullish line, solid bearish line.
E. Solid bullish line:
① A solid bullish line appearing in a low price area shows as the price tests the bottom and then rises gradually while volume increases, indicating the start of a rising market. This indicates that during the bottom-testing process, volume shrinks, and as the price gradually climbs, volume expands evenly, ultimately closing as a bullish line, indicating bullishness in the future. If it appears during a rising market, it indicates continued bullish sentiment.
② If a hanging bullish line appears in a high price area, it may indicate that the major players are raising prices to sell off, so caution is needed.
F. Solid bearish line:
If this line type appears in a low price area, it indicates that the intervention of buying low has caused signs of price rebound, but the strength is not great.
Lower shadow bullish line, lower shadow bearish line.
G. Lower shadow bullish line:
Its appearance indicates that during the battle between bulls and bears, the bulls are attacking steadily and forcefully, causing the price to fall first before rising, and there is potential for further upward movement.
H. Lower shadow bearish line:
When it appears in a low price area, it indicates that there is strong support below, and the price may rebound.
Upper shadow bullish line, upper shadow bearish line.
Ⅰ. Upper shadow bullish line:
① When showing a heavy selling pressure above during a bullish attack. This pattern is common in the actions of major players testing the market, indicating that there are many floating chips at this time, and the upward trend is not strong.
② Indicates that the bullish attack is obstructed and retreats, with heavy selling pressure above. Whether the upward trend can continue is still unclear.
J. Upper shadow bearish line:
When appearing in a high price area, it indicates severe selling pressure above, the market is weak, and there is a possibility of price reversal downwards; if it appears during an upward movement in a mid-price area, it indicates that there is still upward potential.
Solid bullish and bearish lines.
K. Solid bullish line:
Indicates that the upward momentum is strong, but there is disagreement between bulls and bears at high price levels, so caution is advised when buying.
L. Solid bearish line:
The appearance of a solid bearish line indicates that the price has rebounded, but the selling pressure above is heavy. Bears take advantage of the situation to push the price down, closing as a bearish line.
Solid bullish line, solid bearish line.
M. Solid bullish line:
① The bulls have gained the upper hand and are exhibiting a wave-like upward trend, with prices steadily rising in conjunction with trading volume, indicating a bullish outlook for the future.
② Also a solid bullish line; if the price trend shows horizontal consolidation or a downward trend for most of the time, followed by a sudden rise at the end of the day, it indicates that there may be a gap up before a drop.
③ If the price trend shows a wide range of fluctuation throughout the day, followed by a significant increase in volume and a bullish closing, it may indicate that the main players are washing out the weak hands, then easily pushing prices up, and the future may continue to be bullish.
N. Solid bearish line:
Opposite to the situation of the solid bullish line mentioned above, indicating that the possibility of price decline is greater.
Solid bullish and bearish lines with no shadows.
O. Solid bullish and bearish line:
Indicates that the bulls have firmly controlled the market, pushing prices up wave by wave, with a strong upward momentum.
P. Solid bearish line:
When the price is horizontally consolidated, and suddenly there is a large volume sell-off at the end of the day, it indicates that the bears have ultimately gained the dominant advantage in the battle, and the possibility of a low opening is significant.
If the price trends downward in waves, it indicates that the bears have taken full advantage, and the bulls are unable to resist, causing the price to gradually decline, with a pessimistic outlook for the future.
T-shaped line, inverted T-shaped line.
Q. T-shaped line:
When it appears in a low price area, it indicates that there is strong support below, and the price may rebound.
R. Inverted T-shaped line:
When appearing in a high price area, it indicates severe selling pressure above, the market is weak, and there is a possibility of price reversal downwards.
If it appears during an upward movement in a mid-price area, it indicates that there is still upward potential.
Doji.
S. Doji:
This line type is commonly referred to as a change-point doji; whether it appears in a high or low price area, it can be seen as a signal for a top or bottom, indicating that the trend is about to change direction.
Summary of candlestick types.
Besides the above classification of candlesticks into 19 types, we can also categorize them based on the body and shadow of the candlestick. They can primarily be divided into four main categories.
①: A candlestick with no upper or lower shadows and only the body is called a solid bullish or bearish candlestick.
Indicates that one side has the upper hand among buyers and sellers, becoming the dominant force in market transactions.
②: A small bearish and bullish body with no upper or lower shadows.
When the closing price is the highest or lowest price, and the opening price is the lowest or highest price, with limited fluctuations, the battle between buyers and sellers is not fierce. When the candlestick is a bullish line, buyers have a slight advantage; when it is a bearish line, sellers have a slight advantage. It generally appears during price consolidation and when prices make large gaps either up or down. During consolidation, its significance is minimal, but when there is a significant gap, its significance is extraordinary, indicating that one side has achieved a complete victory while the other side has collapsed.
③: A large bullish line body with no upper or lower shadows.
Most commonly appears during the rising phase of the crypto market, with prices continuously rising, although there may be pullbacks, they quickly recover, as buyers are determined to push prices up.
④: A large bearish line body with no upper or lower shadows.
Most often appears during the downward phase of the price, having the opposite significance to the one above.
In the digital currency market, technical analysis is a very important indicator for predicting short-term market trends, commonly referred to as candlestick charts. Whether you believe in or advocate technical analysis, it is essential to understand candlestick charts.
Not understanding candlesticks and randomly investing is a big taboo in the crypto space! Excluding technical chart patterns, indicators, and the technical issues of bull-bear battles, basic information such as a cryptocurrency's price trend, trading volume, lowest point, and highest point can all be reflected in the candlestick chart.
Candlestick patterns.
Relying on candlestick patterns to provide us with double protection, giving us confidence.
Triggering our trades, so mastering candlestick patterns is equally important.
A bullish engulfing line consists of a bearish line followed by a very small bullish line. This bullish line, whether its body or shadow, is within the previous candlestick.
The bearish engulfing line is the opposite, where both the body and shadow of the bearish line are within the previous bullish line.
Generally, there are two common methods to trade using this pattern.
The first method is when the price breaks through the high or low of the previous candlestick; regardless of whether the latest candlestick has ended, we will enter the market to buy or sell, which belongs to left-side trading.
The second, more conservative approach is to wait for the current candlestick to truly end at the high or low of the previous candlestick and establish a direction before entering the market.
Part Three: Chart Patterns.
You will find that the market constantly does one thing through repetitive patterns, and chart patterns provide such a trace, making it easier for us to follow, discovering what the market is doing at this moment and the logic behind it.
Commonly seen chart patterns in the market.
Ascending triangle.
Descending triangle.
The descending triangle is the same; the influence of horizontal support levels on price, each spike is smaller than the last, ultimately leading to a successful breakout, continuing a downward trend.
In the long bear market, where is the end? In the current market situation, many people have already reached their limit. They face two choices: the first is to stop moving forward and exit the crypto space; the second is to endure and wait for the next bull market to start.
Only a small number of people can survive in a bear market. The bull market is like a wind tunnel; even pigs can fly, while the bear market is a battlefield where survival of the fittest prevails. So how can one survive in a bear market?
Locking positions and staying away from the crypto market, waiting to return on the day of the next bull market. This rule requires a high level of self-discipline; very few can truly ignore and not inquire, and those who can do so are not ordinary people.
Regular investment reduces risk. Suitable for those with a small initial investment and stable personal income, with future returns not expected to be low.
Timing the market to catch the bottom. This risk is also significant; it's not easy for non-experts to buy at mid-levels and end up with long-term holdings. Not everyone can do this well.
Short-term operations, high selling and low buying. Risk is five stars, greater than the fourth type. Those who do well with this method will not get trapped in a bear market.
Cutting losses and staying away from the crypto market, don't look back. The downside of this rule is that if you sell at the end of a bear market, followed immediately by a big bull market, you will regret it for a lifetime. To avoid lifelong regret, it is not advisable to use this approach.
How should we invest and trade in a bear market?
1: Adhere to a long-term investment plan that aligns with financial goals.
For investors, whether in a bear or bull market, it is essential to stick to a long-term investment plan. During a bear market, there is a lot of pessimistic information online, but it is best to ignore this market noise and focus on long-term investment returns. Some short-term traders will quickly change their investment strategies to protect their funds or expand their returns, but the truth is, if you find yourself in a bear market, it may already be too late to change your asset allocation.
2: Avoid timing the market when entering and exiting.
A common mistake among retail investors is trying to sell their positions to avoid the bear market's devouring. Exiting at highs and entering at lows seems simple, but it is not easy. Even if investors sell their positions before a downturn, they may not catch the right timing to re-enter, as the market usually surges when it is least expected. Historically, investors typically exit during bear markets, preventing them from maximizing asset returns.
3: Do not guess market tops or bottoms.
In a bear market, investors often want to sell all at once, but actually selling in batches may be a better choice. Don't try to assess the timing of entering and exiting; on the whole, the average cost method (whether buying or selling) is more suitable.
4: Accumulate coins.
Regular investment to accumulate coins. Most of the chips in the market are very cheap; accumulating cheap chips in a bear market is the coin to hold, and the coins held during a bear market are the chips for making money in the next bull market.
5: Strengthen theoretical learning and explore potential coins.
Learning is the only way to progress. This circle changes rapidly, with projects emerging and disappearing, and technology continuously updating and iterating. Without learning, one will be eliminated. In this bear market, strive to learn and accumulate, as it will be your chips for future battles.
This is the trading experience that Old Bo shares with everyone today. Often, due to your doubts, you miss many opportunities to make money. If you don't dare to try boldly, to engage, to understand, how will you know the pros and cons? You must take the first step to know how to proceed next. A warm cup of tea and a piece of advice, I am both a teacher and a friend you can talk to.
Meeting is fate, knowing is destiny. Old Bo firmly believes that those who are destined will eventually meet, and those who miss out are destined by heaven. The investment journey is long, and momentary gains and losses are just the tip of the iceberg. It is important to realize that even a wise person may have one oversight, while a foolish person may have one success. Regardless of emotions, time will not stagnate for you. Pick up your worries and stand up to move forward.
Still the same statement: if you don't know what to do in a bull market, click on my avatar, follow me, I share strategies for bull market spot trading and contract trading for free.