When I first entered the cryptocurrency world, how much principal did you invest?
I was initially just a small retail investor with 50,000 yuan, but now I have risen to become a middle-class individual with 80 million yuan in assets!
Today, I will share the experiences I have accumulated through this journey without reservation. Trading cryptocurrencies and managing funds are of utmost importance; never put all your funds in at once. I am used to dividing my funds into five parts, only using one part for each operation. This way, even if I incur losses, I won't find myself in a desperate situation. I have also set a strict rule for myself: if I lose 10%, I will decisively exit the market, never dragging my feet, regardless of how enticing the market conditions may be. If I incur losses of 10% five times in a row, I will have lost a total of 50%, but if I make a profit, the returns can far exceed that amount. Even if I unfortunately get stuck, I can maintain my composure and remain calm.
Keeping up with market trends is always the most reliable way to make money. When the market is falling, do not naively think about bottom fishing, as that is often a trap. Meanwhile, corrections during an upward trend are the rare golden opportunities to enter, and a low-buying strategy is much safer than holding onto a bottom.
When selecting coins, one must have precise and unique insight. Those coins that soar within a short time, whether mainstream or altcoins, should be avoided as much as possible. The more they surge, the greater the potential correction that may follow, making it easy to get deeply trapped.
In terms of technical indicators, the one I use most frequently is MACD. When the DIF line and DEA line form a golden cross below the zero axis and cross above it, this is a clear buying signal. Conversely, if they cross down after being above the zero axis, then it’s time to reduce positions quickly.
When it comes to averaging down, one must be extremely cautious! Do not blindly average down in a loss-making state, or you will only sink deeper, potentially losing everything in the end. Remember, decisively cut losses when in the red, and only consider increasing positions when in profit.
Trading volume is also a crucial indicator. When cryptocurrency prices break through at low levels, if trading volume simultaneously increases, it usually indicates that a big opportunity has arrived.
The most crucial point is to follow the trend and firmly grasp the trend! Combine the daily line, 30-day moving average, 84-day moving average, and 120-day moving average. When any moving average starts to turn upward, you will know how to operate.
The road to trading cryptocurrencies is filled with risks, but it also contains enormous opportunities.
Learn money management, trend analysis, and precise coin selection, and you too can rise from being a small retail investor to becoming middle class like me!
Master the naked K line + secrets and discern the market pulse in five minutes, accurately capturing trading opportunities!
The candlestick chart + is a crystallization of wisdom originating from the rice market trading during Japan's Edo period in the 18th century, also known as candlestick chart, Japanese line, yin-yang line, etc. After more than three hundred years of sedimentation and evolution, it has become an indispensable analytical tool in the TD, futures, foreign exchange, options, and even virtual currency markets.
The candlestick chart is not only a historical scroll of price fluctuations but also a subtle embodiment of Eastern philosophical thought. The change of yin and yang symbolizes the ebb and flow of bullish and bearish forces, showcasing the delicate transformation of market 'momentum'.
Each candlestick is a microcosm of the market's daily changes. Connecting daily candlesticks by time sequence outlines the historical trajectory of price fluctuations, which is what the candlestick chart represents.
The composition of a candlestick contains four main elements: opening price, closing price, highest price, and lowest price. When the opening is lower than the closing, it's a bullish candle; otherwise, it's a bearish candle. The middle rectangle body, along with the upper and lower shadows, collectively forms the unique shape of the candlestick. Daily candlesticks, weekly candlesticks, monthly candlesticks, as well as minute and hourly candlesticks, are all representations of candlestick charts in different time dimensions.
Drawing candlestick charts, with time as the horizontal axis and price as the vertical axis, continuously depicts daily candlesticks, vividly illustrating the market's fluctuations. The columns in the candlestick chart alternate between red and green, symbolizing price increases and decreases. Red columns symbolize price increases, where the closing price is higher than the opening price; green columns represent price decreases, where the closing price is lower than the opening price.
If the opening price and the closing price are the same, it forms a doji, indicating a subtle balance in the market. So, what does a candlestick chart actually look like? How should it be interpreted? Please savor the following chart, letting the secrets of the market slowly unfold before your eyes!
What does naked K trading analyze?
Naked K analysis mainly has four modules, namely: trend, position, momentum, signal.
These four core analytical modules are not isolated; they mutually support and promote each other, working together.
When responding to the ever-changing market, if we can analyze from these four dimensions deeply, it will make our analysis more comprehensive and systematic, avoiding the impulsive behavior of hastily entering the market simply because we captured a trading signal, which is a common mistake made by many novice traders.
So, how can we accurately grasp the pulse of the trend? When it comes to trend analysis, remember the three key elements: structural layout, directional movement, and fluctuation level. As for identifying naked K line trends, it mainly relies on classical technical theories to define trends.
From a structural perspective, when observing significant high points and low points continuously rising, it can be determined as an upward trend; conversely, if high points and low points keep declining, it is viewed as a downward trend; fluctuations located between high and low points are classified as a consolidation pattern.
Figure (2)
In trend judgment, the biggest difficulty lies in the classification of levels and the conversion of trends.
The division of trends at different levels involves the issue of primary and secondary rhythms. Beginners are easily swayed by small-level trends, often neglecting the primary trend, leading to confusion in trading direction. The conversion of trends is either a trend correction or a trend reversal? It is not easy for us to judge this because there are no absolutely quantifiable standards.
To solve the problem of large and small levels and trend conversions, my approach is: define your main trend and critical points. Because the starting point of trend selection is different, the trend direction in your eyes may not be the same as in others'.
Thus, you need to define the trend you classify, identify its main trend, and then find the critical points of each trend level, which are typically horizontal lines and trend lines. Is the price position high or low?
The key words for position: support levels, resistance levels, profit-loss ratio. Why do you chase high prices? Why do you always earn small and lose big? This is related to the judgment of price position. If you always go long at resistance levels and short at support levels, the failure rate is not only high, but the profit-loss ratio is also very low.
Position judgment is also very important; is the price high or low? The basic personal measurement standard: support levels belong to low price levels, resistance levels belong to high price levels because profit-taking settings are also set at support and resistance levels.
So: buy at support levels, sell at resistance levels, maximizing the profit-loss ratio for long positions. Buy at resistance levels, sell at support levels, maximizing the profit-loss ratio for short positions.
Unless you trade breakouts, all long positions at resistance levels belong to high-level entries, and all short positions at support levels belong to buying on dips.
This is based on support and resistance levels to judge the highs and lows of prices.
If the concept of trend is added, how would you judge the highs and lows of positions? How to judge the conversion of momentum strength?
The key words for momentum: trend movement, candlestick patterns, slope momentum can be said to be the cornerstone of trend movement. Without momentum, there is no existence of a trend, so momentum analysis is also a very important module.
What is strong momentum, and what is weak momentum? Strong momentum: trend movement, consecutive bullish or bearish candles, large bullish or bearish candles, large slope; weak momentum: range movement, doji, small bullish or bearish candles, small slope.
An upward trend must be characterized by bullish momentum stronger than bearish momentum. A downward trend must be characterized by bearish momentum stronger than bullish momentum. A range consolidation must be characterized by a state of equilibrium between bulls and bears, while narrow fluctuations indicate a trend of energy accumulation.
Trends from strong to weak are a form of momentum. The trend from large bullish candles to small bullish candles indicates a weakening of bullish momentum. A decreasing slope indicates that momentum is weakening, and vice versa. The above is based on trend and price candlestick forms to judge the changes in price momentum, thereby determining the direction of price movement in the market's outlook.
So, if positions are added, what are the special changes in momentum strength analysis? Is it reliable to look solely at entry signals? Key words: trend, position, momentum. Speaking of signals, many of us only think of signals like hammer patterns, engulfing patterns, and so on.
When it comes to trading signals, they must be established on the premise of the three modules: trend, position, and momentum. If you analyze outside of these three modules and directly look at signals to enter trades, you will find that the success rate is not high. This is why trading signals cannot be separated from market conditions.
In my personal view, sometimes my entry does not always wait for trading signals because I have a strong grasp of price trends, positions, and momentum.
Finally, this article elaborates on the four analytical modules of naked K, each of which also covers many knowledge points. This requires a stronger foundation, but regardless, these four modules serve as a major analytical framework. If we have not found the directions for analysis and trading, we can start from these four modules to sort out the market.
In addition, there are several key technical levels worth noting: 1)
Psychological support and resistance points are usually integer exchange rates, such as 1.00, 1.10, 1.20, etc. Many traders tend to set orders near these integers.
2) Fibonacci retracement levels + finding potential levels and trends for price retracement. When used on higher time frames, important Fibonacci levels (such as the 61.8% retracement level) may become key technical levels, where there may be a large number of open orders.
3) Pivot points - pivot points are the points where the market direction turns within a day. By simply calculating the previous day's highs/lows and closing prices, a series of points can be obtained, forming key support and resistance lines. Range traders can use pivot point systems + to confirm potential reversal points, while breakout traders can use pivot point systems to confirm key breakout points for trends.
4) Dynamic support and resistance points +- key technical levels are not necessarily fixed and can also be dynamic. Moving averages are often used to determine dynamic key technical levels near EMA that appear within 50 days, 100 days EMA, EMA, or Fibonacci EMA levels (like the 144-day EMA).
5) Integration areas of support/resistance—these areas are intersections of different important technical levels. For example, an upward trend line may provide price level support at horizontal support levels. This will form an integrated support area of the upward trend line and horizontal support. Be cautious from start to finish and learn from the market.
The market is ever-changing; trading is not simply a matter of understanding the way; sustaining stable profits over a week, a month, a year, or several years is the true understanding, indicating that you are moving in the right direction, and practice proves feasible. Do not pay too much attention to others' opinions, as the vast majority are losers. The market is the best teacher; focus on yourself, remain consistent, overcome impulsive trades, and be cautious and respectful of the market.
Trading wisdom in the cryptocurrency circle:
Master the following secrets to help you thrive in the cryptocurrency circle and easily achieve hundredfold returns!
Revealing the essence of cryptocurrency trading: once key price levels are broken, short-term opportunities vanish in an instant. Interpretation: When prices break through important support or resistance levels, it signifies that short-term trading opportunities are coming. Act swiftly; do not miss out.
After a surge, a correction often follows; do not buy in due to greed. Interpretation: After a price spike, corrections are often imminent. At this time, do not impulsively chase the price; stay calm and maintain your mindset.
Price rises with stagnant volume; beware of main forces setting traps to lure in buyers. Interpretation: If prices rise but trading volume does not increase, this may be a facade created by the main forces to deceive retail investors into entering; one must remain clear-headed and guard against being tricked.
A sharp drop with reduced volume should not cause panic; a slow drop with increased volume requires withdrawal. Interpretation: When prices drop sharply and trading volume is low, there is no need to be overly anxious; if prices slowly drop and trading volume increases, one should decisively exit to avoid losses. A major upward wave accelerating its sprint often indicates that the top is approaching. Interpretation: When prices rise rapidly, it often signals that a top is about to come, so one should closely observe the characteristics of the top and be prepared to respond.
Do not chase high prices when entering the market; corrections present good opportunities. Interpretation: When purchasing digital currencies, do not chase in when prices are high, as the risks are extreme. The best timing is to buy when prices correct and are relatively reasonable.
Combining daily and weekly charts, understanding the main force's direction is key. Interpretation: When analyzing price trends, it is necessary to combine daily charts with weekly charts and even longer time frame charts to accurately grasp the intentions of the main force and market trends.
Combining daily and weekly charts, understanding the main force's direction is key. Interpretation: When analyzing price trends, it is necessary to combine daily charts with weekly charts and even longer time frame charts to accurately grasp the intentions of the main force and market trends.
Minor fluctuations need not worry, but continuous large increases require caution. Interpretation: Small price fluctuations are normal and do not require excessive worry; however, if prices continuously rise significantly, one must raise their guard to prevent risks from an overheated market.
When prices hit new lows with reduced volume, it may signal a bottom; when trading volume rebounds and prices begin to rise, the timing to enter the market has matured. Interpretation: When prices fall to a new low and trading volume shrinks, it may indicate a bottom has appeared; when trading volume rebounds and prices start to rise, it is the best time to enter.
In the sea of books, diligence is required; the journey of learning relies on persistence, and you will surely return with a wealth of knowledge. Helping others is like helping oneself. I am A Xin, willing to walk with you. Here, not only do we teach how to fish, but we also give fish!
