In the past seven to eight years, my assets have also exceeded 3000w, and this journey has been full of challenges and experiences. Below are some key insights I've summarized, hoping to inspire everyone:
1. Capital management is the cornerstone of success
Divide the capital into five parts, using only one-fifth each time, and set strict stop-loss limits—each trade should not lose more than 10%, with total capital loss controlled within 2%. Even if there are five consecutive mistakes, the total loss is only 10%, but once the opportunity is seized, the profits can often easily cover the losses.
2. Go with the flow, don’t swim against the current
Don’t rush to catch the bottom when prices are falling, as most are traps to entice buyers; patiently wait for clearer signals.
During the uptrend, don't rush to sell; this may be a "golden pit". Buying low is more prudent and reliable than trying to catch the top.
3. Stay away from coins with short-term explosive growth.
Whether it's mainstream coins or altcoins, coins that continue to surge are rare, and most will experience stagnation or even a pullback after a surge. Do not harbor unrealistic hopes of betting on miraculous high-position surges.
4. Make good use of technical indicators.
MACD is a useful tool: When the DIF line and DEA line form a golden cross below the zero axis and break through the zero axis, consider buying; conversely, when a death cross occurs above the zero axis, consider reducing your position. Averaging down should be done methodically: never average down when in loss, only add positions when in profit, otherwise, it could lead to deeper losses.
5. Trading volume is the soul of the cryptocurrency market.
Focus on low-level volume breakthroughs, as this is an important signal for market trends. Stick to trading only in rising trend coins, observing the 3-day, 30-day, 84-day, and 120-day moving averages; when they start to turn up, it often indicates that the trend is established.
6. Review and strategy adjustment
After each trade, review and reassess your holding logic, flexibly adjusting your operational strategy in conjunction with weekly K-line trends.
In the cryptocurrency market crash, how can long-term investors break through? This trick helps you navigate the difficulties.
The cryptocurrency market is undergoing dramatic changes, with a plunge in the market. When you open the market tracking software, what you see is a sea of red. Bitcoin prices are plummeting, followed closely by Ethereum, and altcoins are suffering heavy losses, with prices nearly cut in half. In various investment group chats, there are cries of despair from investors lamenting, "I've lost confidence in investing" and "My principal is almost gone."
In this situation, if you are a long-term investor, your heart must be filled with conflict and struggle.
Should you continue to remain inactive, waiting for the market to recover? Or should you cut losses and stop out in a timely manner? Or should you seize the opportunity to buy at the bottom and increase your position?
Don't rush, today we bring you a wealth of practical knowledge, teaching you five simple yet crucial strategies to smoothly ride out the bear market and ultimately welcome the dawn of a bull market.
Clarify the original intention of investment and adhere to long-term logic
When facing a sharp decline, the first thing to do is to reflect on the original intention of choosing long-term investment. The underlying logic of long-term investment, simply put, is to be confident in the future development potential of blockchain technology and to be willing to exchange time for the space of asset appreciation.
If you are only attracted by the rumors of "getting rich overnight" and rashly enter the cryptocurrency market, feeling panic in the face of the current decline is a completely normal reaction. However, if you have deeply studied the halving cycle of Bitcoin and the development context of the Ethereum ecosystem, you will deeply understand that sharp declines are actually an unavoidable stage in the long-term investment journey and may even be a turning point full of great opportunities. Looking back at the development history of Bitcoin, after every sharp decline, it successfully broke through and reached new price highs.
In the face of sharp declines, five strategies will help you break through.
Take a break from market fluctuations and maintain a calm mindset. When facing a 50% drop in coin prices, each time you check your account assets will only increase anxiety, which is of no benefit to investment decisions. Remember, the funds used for long-term investment should be idle funds that you will not need in the next three years.
As long as there is no immediate need for funds, the price fluctuations in the cryptocurrency market are just changes in numbers. So, decisively close the market tracking software, uninstall related apps, reduce attention to group chat information, and return to normal life. Set yourself a six-month deadline, and after six months, revisit the market.
Rationally discern and avoid blindly cutting losses. Unless you are sure you have chosen the wrong investment target, do not easily make the decision to cut losses. Before deciding whether to cut losses, carefully examine the coins you hold: for mainstream coins like Bitcoin and Ethereum that have undergone numerous market tests, even if their prices drop, they should be held firmly; for unknown altcoins, if you determine they are worthless, do not harbor illusions and exit quickly; for coins in mainstream sectors, such as DeFi and Layer2, focus on whether their project teams are still actively advancing the projects. If the teams are still operating normally, then you can continue to hold.
In summary, the decision to cut losses must be based on rational analysis rather than being influenced by emotions.
Start a dollar-cost averaging plan to accumulate low-priced coins.
If you currently have idle funds, the cryptocurrency market crash actually provides you with an excellent opportunity for dollar-cost averaging. The method of dollar-cost averaging is very simple: after your monthly salary arrives, take out 500 yuan to purchase valuable and potential digital currencies. Regardless of how the market price fluctuates, you must resolutely execute the dollar-cost averaging plan. Investing during a bear market is like planting seeds of hope in spring; when the bull market arrives, you will surely be grateful for your persistence in dollar-cost averaging.
Use the bear market opportunity to enhance investment understanding.
The bear market is a golden period for investors to improve themselves. Instead of sighing in front of K-line charts all day, it’s better to invest time and energy into learning and research. Delve into the actual problems solved by the digital currencies you are investing in, and understand the value support behind them.
You should know that in the investment field, you can never earn money beyond your cognitive range. Only by continuously enriching yourself in the bear market and improving your investment understanding can you easily achieve profits when the bull market arrives.
Assess the risk baseline to ensure investment safety.
Long-term investment is definitely not about blindly following trends; you must prepare for the worst in advance. Ask yourself, if the funds you invested were to be completely lost, would it severely impact your daily life? If the answer is yes, it means you have invested too much.
Always remember to use idle funds for investment and maintain a stable mindset to hold on until the dawn of the bull market.
Avoid investment pitfalls and protect your asset safety.
In the cryptocurrency market's crash, there are three investment red lines that absolutely cannot be crossed:
1. Absolutely prohibited to borrow money for averaging down: The duration of a bear market is difficult to predict. Borrowing money to average down not only increases your capital costs, but if the market continues to decline, the interest from the loan may become overwhelming.
2. Absolutely avoid leverage: Contract trading is like gambling in a casino, with extremely high risks. Statistics show that 99% of investors involved in contract trading eventually end up with liquidation.
3. Do not blindly trust rumors: In investment groups, messages urging you to "buy the bottom of hundred-fold coins" often hide traps for cutting losses. Never believe easily. There is a saying in the cryptocurrency circle: "Make money in a bull market, earn coins in a bear market." Historical experience repeatedly proves that those who can hold on and maintain rational investment during bear markets often become big winners in the next bull market. Therefore, when coin prices drop, there is no need to panic; time is the most powerful ally for long-term investors. Remember, investing is not a momentary competition for superiority but a long-term battle that requires patience and perseverance.
The most reliable naked K chart pattern: a detailed explanation of the triple top trading strategy
Often, interpreting chart patterns can open the door to profits for traders. Today we will delve into the "Triple Top Chart Pattern," which is highly regarded by traders for its predictive capabilities and its revelation of the psychology of both buyers and sellers.
Why do I say this? Because compared to other trend reversal patterns, the triple top pattern is more powerful and reliable, as the price has failed to break through a key level three times, indicating stronger resistance or support.
On the chart, the triple top pattern consists of three "peaks" that almost reach the same price level, indicating that the price may no longer be in an uptrend, suggesting a potential reversal downwards. Triple tops can appear across all time frames, but they must follow an uptrend to be considered. This chart reversal pattern looks like the letter 'M' on candlestick charts.
In contrast to the triple top, the triple bottom chart pattern looks like the letter 'W'. This pattern appears after a downtrend, with three bottoms touching the same price level before breaking the resistance.
However, it is worth noting that although triple tops and triple bottoms are very reliable, their formation frequency is not high and they are difficult to sustain.
What is the triple top chart pattern trading strategy?
As we all know, the triple top chart pattern trading strategy is a reversal strategy aimed at utilizing a simple yet very powerful chart pattern. One of the main advantages of reversal trading strategies is that they allow you to participate in a new trend right from the start.
As mentioned above, the triple top pattern may take a long time to form, but it reflects the intense struggle between buyers and sellers.
However, within intraday trading time frames, triple top reversals may occur more frequently, which is also why we prefer to trade using the triple top chart pattern strategy intraday.
What is the triple top pattern?
According to traditional definitions, the triple top pattern is one of the many reversal patterns, intuitively reflecting the transfer of trend control.
A perfect triple top reversal structure consists of three almost or completely identical price levels, where the market fails to break through this price level. Additionally, the reaction from the third time at the resistance indicates that sellers' interest exceeds that of buyers, and the trend is reversing.
We need to define several rules for the triple top pattern:
◎ Rule 1: To achieve a reversal, there must be a prior trend as a backdrop for the reversal. In the case of a triple top reversal, we need to look for a bullish trend that ultimately enters the fluctuating peak area, where there is enough selling pressure to prevent the further development of the uptrend.
◎ Rule 2: The strength of the uptrend may determine the intensity of subsequent sell-offs.
Now, let's delve into the psychological factors behind the triple top reversal.
The psychological mechanism behind the triple top pattern.
The psychology behind the triple top reversal indicates that buyer momentum is gradually feeling exhausted, or they do not have enough strength to push the price higher.
Meanwhile, sellers become more aggressive as they prepare to trade at higher prices. Ultimately, we reach a balance point between buying and selling power.
The triple top pattern is a stronger reversal pattern because it fails to break the resistance for the third time. More sellers notice the weakness of buyers, who cannot push the price higher, leading them to intervene more aggressively, ultimately succeeding in pushing the price down.
Note: Public psychology suggests that failing to break through the resistance level three times enhances the importance of that level.
Now, let's see how to effectively use the triple top chart pattern trading strategy to profit.
How to trade using the triple top pattern trading strategy
The triple top pattern rarely appears on higher time frames, which is why we mainly apply the triple top chart trading strategy on intraday charts. Of course, you can safely use this strategy on higher time frames, but you need a lot of patience because signals are less frequent.
Step #1: The triple top reversal consists of three rounded tops.
You need to identify three rounded tops to consider the triple top pattern as tradable. But what is a rounded top?
In technical analysis, rounded tops typically occur after an uptrend; the price first moves up and then quickly falls back, forming a dome, sometimes appearing as an inverted 'V'.
According to the structure of the triple top reversal, the size and amplitude of the inverted V-top may vary. Regardless, the key is to see the price rise rapidly and then fall sharply to define a rounded top.
To practice the triple top chart trading strategy, we selected the triple top reversal of the GBP/USD as shown in the figure above. You can notice that an inverted 'V' top is somewhat presented at all three tops.
Note: Don't pursue perfection, as in trading, you need to rid yourself of an idealistic mindset. The inverted 'V' top does not always look perfect, so be flexible in your response.
Step #2: Allow a difference of 10-15 points between the three tops.
The second criterion for a tradable triple top pattern is that a difference of 10-15 points is allowed between the three tops.
What does this mean?
The probability of three tops appearing at the same price level is almost zero. You will find that these three tops usually have slight differences, but they appear near the same price area.
More importantly, the closing price is crucial. If the position of the triple top pattern is good, the closing price may align perfectly. This is why we advocate for abandoning an idealistic mindset.
Step #3: Enter when testing the resistance for the third time, and enter again when breaking through the support.
If you want to take on more risk and are an aggressive trader, you can enter when testing the resistance for the third time, anticipating that the triple top reversal will occur. We prefer to spread the risk: entering half the position on the third retest and the other half when breaking support.
From the perspective of swing trading, you need to see signs of market sentiment shifting from bullish to bearish. This signal can only be provided by breaking through the support of the triple top reversal.
Note: The support level here is formed by the troughs created during the process of forming the triple top pattern (similar to the "neckline" in head and shoulders).
Next, we need to determine reasonable profit points for the triple top chart pattern trading strategy.
Step #4: The profit target equals the price distance from the highest point to the lowest point.
The minimum average drop after the triple top reversal break is roughly equal to the price distance from the highest point to the lowest point.
If we project the same price distance downwards, we can obtain the first profit range of the triple top chart pattern trading strategy.
Another important matter we need to determine next is the setting of protective stop-loss positions.
Step #5: Set the protective stop-loss slightly above the resistance level formed by the triple top pattern.
The triple top chart pattern trading strategy provides traders with a simple method to quantify risk, as you can set the protective stop-loss slightly above the resistance level of the triple top pattern.
The key to trading the triple top pattern is to express your views based on wise judgment while controlling risks as much as possible. You wouldn't want to use overly wide stop losses.
Note: The above is an example of a short trade. For long trades, you can use the same rules in reverse. This time, we will use the triple bottom pattern. In the figure below, you can see an actual example of a buy trade using the triple bottom pattern.
Using Dow Theory in the reverse trading strategy for the triple top pattern
"The trend will continue until a clear reversal signal appears" is an extremely important principle in Dow Theory. If you grasp this concept, you can see whether the trend will continue or reverse, thus determining the correct trading strategy.
For example, if the latest high point and the latest low point have not moved up during an uptrend and are below the most recent low point, it can be determined that the upward trend will reverse to a downward trend. Thinking in terms of Dow Theory helps improve the accuracy of reverse trades against the trend.
As mentioned earlier, the three "peaks" of the triple top do not necessarily have equal heights and may deviate slightly. The focus here is on the positional relationship between the highs in the context of Dow Theory. Once the highs start to move down, a trend reversal may occur; if the lows also move down, the probability will significantly increase.
If the triple top appears near the market peak, it signifies the end of the uptrend. When interpreting the market, note that although the highs have undergone three upward tests, they are all blocked at the same resistance level, and the final low has moved down, leading to a trend reversal.
Similar to head and shoulders, if the price breaks below the "neckline," the decline will become more severe. Therefore, enter when the price breaks below the neckline. Additionally, if you can accurately anticipate that the triple top pattern will appear, you can also choose to enter at the third peak.
Entry operations
(A) Based on the premise of meeting the conditions for an uptrend in Dow Theory, once the triple top pattern forms, enter a short when the price breaks below the neckline.
(B) Based on the premise of meeting the conditions for an uptrend in Dow Theory, after the triple top pattern forms, enter short at the third peak.
Summary
The triple top pattern does not appear as frequently as other chart patterns, but once it does, it can potentially provide significant profits. Furthermore, the triple top reversal is a very reliable price pattern, and we recommend trading it within intraday time frames due to its higher frequency of occurrence.
The significance of the triple top chart pattern trading strategy lies in its provision of the opportunity to enter at the beginning of a new trend.
Additionally, when using Dow Theory to trade triple tops or head-and-shoulders and other chart patterns, it is essential to be familiar with the characteristics of various patterns to improve the win rate.
The primary rule for success in cryptocurrency trading is to wait patiently and stay out of the market.
The most challenging aspect of cryptocurrency trading is waiting while holding cash. In the investment field, as long as you have patience and learn to wait, you will surely reap rewards, especially in cryptocurrency trading. A calm wait will lead you to a good price and an excellent entry point, but people tend to chase immediate profits, fearing they might miss a million-dollar opportunity. However, in reality, many traders cannot tolerate waiting, as the wait feels too long.
If you can't stand it, it's advisable to find other things to do, spend more time with nature, and enrich yourself, forgetting that 24 hours a day, 365 days a year, you can operate in a psychological trap.
Entering the cryptocurrency market, regardless of how high your emotional intelligence or IQ is, without patience, you will ultimately end up as a total failure. Because the personalities and emotions of most of these individuals are quite unstable, the cryptocurrency market easily exposes their bad tempers, leading to an unstable mindset and distorted operations.
If you believe you have bad luck during the investment process in the cryptocurrency market and are constantly distorting operations, it might be a good idea to go out more often. Good luck will come as you walk more. Nature can absorb the negative energy from investors, improve their mood, and become a source of personal vitality.
Waiting, patience, and staying out of the market are all very challenging tests of character. This group of data was derived from countless statistics by predecessors in the cryptocurrency market.
1. Trading more than 10 times a day results in an average return rate of -79.2% over three years. 2. Trading more than 5 times a day results in an average return rate of -55%. 3. Trading more than once a day results in an average return rate of -31.5%. 4. Trading 0.3 times a day results in an average return rate of 12%. 5. Trading 0.1 times a day results in an average return rate of 59%. 6. Over 90% of people lose money in trading, which shows how difficult it is to reduce trading frequency. In a constantly changing market, doing nothing is very challenging.
Long-time cryptocurrency investors' insights. Real traders only care about two things: how to proceed when the price movement after buying proves them right, and how to proceed when it proves them wrong. Trading opportunities are not always available, so patience is especially important. Patiently remain in cash, waiting for trends and opportunities. Patiently hold positions, waiting for the trend to conclude. Patiently accumulate, as compound interest is king. Patiently learn, as deep accumulation can lead to thin releases.
In the cryptocurrency circle, there are only two types of people who make money. The first type is patient investors who wait for a big drop, adding the valued coins they have identified to their watchlist, and when the market crashes, they buy in fully and make a significant profit. The second type is value investors who buy high-quality coins in a bear market, hold them long-term, and use dollar-cost averaging to let compound interest roll and explode with power. By doing these two things, you can definitely outperform 90% of the emotional traders in the cryptocurrency market.
When the market develops according to the trader's judgment, there is no need to do anything; just be patient and watch. Therefore, it's essential to understand that trading is a momentary action. Throughout the year, the actual trading may only occur for a few hours; the rest is a long and lonely wait.
The most important thing in trading is waiting; 99% of the time is spent waiting, while buying and selling happens in an instant! Stay out of the market for opportunities, and hold your position until profits are realized! Wait for the right moment! Wait for opportunities within your trading system and trading model, that is, the buy and sell points. Waiting requires time and patience, so patience is crucial!
Investment in the cryptocurrency market requires patience; whether waiting in cash for opportunities or waiting for a rise when fully invested are both necessary paths. Recognizing that investment is like farming, where seeds are sown without rushing to harvest, and understanding that growth takes time makes such waiting a natural part of the investment process. Just as farmers follow natural laws, knowing that sowing and harvesting require waiting, cryptocurrency investors understanding market cycles can calmly face waiting, viewing it as an indispensable and peaceful part of the investment process.
Regarding the current cryptocurrency market situation, there is a rule: the rhythm of a bull market always starts with a small bull, followed by a period of decline and consolidation, and finally a true bull market. It's like a marathon, starting with a slow jog to warm up, then a medium-speed run to accumulate strength, and finally a full sprint!
Currently, the cryptocurrency market has completed the small bull run, and it may enter a period of consolidation or decline next. This phase may last from 4 to 6 months at most, and 1 to 2 months at least, just like a brief storm. Please be patient; after the storm, there will be a brilliant rainbow!
