When trading contracts, the most important thing is to improve your win rate. Relying on gut feelings? You'll eventually go broke. Today I will share a few methods I commonly use to identify high-probability signals to help you improve your trading efficiency.

1. Observe the trend direction
Going with the trend is key. Do not attempt to fight the major trend. In an uptrend, only look for long signals; in a downtrend, only pay attention to short opportunities. How to determine the trend? It's simple, look at the moving averages of higher time frames. For example, if the 60-day moving average on the 4-hour chart is trending upwards, then pullback long opportunities on the 1-hour and 15-minute charts are high probability.

2. Key position resonance
Good signals often appear at key positions. For example, previous highs and lows, important Fibonacci retracement levels (such as 61.8%), or areas of high trading volume. When the price reaches these positions and shows bullish or bearish candlestick patterns (such as pin bars or engulfing patterns), the success rate will significantly increase.

3. Confirm with indicators
Single indicators can easily mislead; multiple indicators resonating together are more reliable. My commonly used combination is:
1 MACD: Look for golden crosses and death crosses, as well as whether divergence occurs.
2 RSI: Overbought and oversold areas (over 70 is overbought, under 30 is oversold), but in a strong trend, RSI can remain overbought, so do not simply use it for contrarian trading.
3 Volume: When breaking key positions, there must be an increase in volume for confirmation; otherwise, it may be a false breakout.

4. Pay attention to market sentiment
The cryptocurrency market is greatly affected by news. Sudden spikes and drops are often driven by news. Pay attention to KOLs on Twitter, project updates, and macroeconomic news (such as Federal Reserve meetings). But remember, do not chase news that has already surged; it's easy to be left holding the bag.

5. The flow of funds cannot be ignored
The market's bullish and bearish sentiment can be judged by the funding rate. When the funding rate is abnormally high, it indicates excessive bullish leverage, which can easily trigger a short squeeze or a violent drop, making it an important contrarian indicator.

6. Time frame switching
Large cycles determine the direction, while small cycles find entry points. For example, if the daily chart is bullish and the 4-hour chart is also above the trend line, then look for pullback opportunities to go long on the 15-minute chart. The probability is highest when signals from different time frames align.
Important reminder:
There are no 100% accurate signals. Any trade must set a stop-loss; protecting the principal is the top priority. Do not hold on to losing positions, do not rely on luck.

The above is a summary of my personal experience and does not constitute investment advice. The cryptocurrency market is extremely risky, and contracts are even more about seeking victory amidst danger. Be sure to invest with spare funds and control your position size.
What other tips do you have for recognizing signals? Feel free to share and discuss in the comments section.

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