For traders, the strategies in market games are ever-changing, but broadly classified by time, they can be categorized into short-term, mid-term, and long-term trading. Each type of trading corresponds to different market cycles and respective investment strategies. Generally speaking, an investment (including buying and selling) completed within a day, or within 3-5 days, 1-2 weeks, and not exceeding one month, is considered short-term trading.
Short-term trading is typically about buying low and selling high, testing investors' ability to monitor the market during the day, which is also the operational method of most people in the market. Mid-term trading generally spans 2-4 weeks or 1-3 months, with longer trends extending to 6 months. Mid-term traders do not care about short-term price movements but focus on stage trends, using the current market to predict future movements and layout in advance. Long-term trading refers to holding a position for at least 6 months or more than a year, aiming to gain substantial profits from long-term market trends. From the trading method perspective, short, mid, and long-term trading are all just trading methods and strategies, with no superiority or inferiority; only the ability to apply them effectively matters.
For investors in the market, individual differences are significant. For the same cryptocurrency, there will be different opinions. Some believe it can be a long-term investment, while others think it can only be traded in the short term, and some feel it should not be touched at all. Therefore, one cannot generalize but should differentiate based on their understanding and analysis of the project, choosing strategies that suit themselves. Many people in the market lose money, chasing highs and cutting losses, buying high and selling low, and not understanding when to take profits or cut losses. Many issues arise from strategy over time, as they hold on to a mediocre coin with faith, feeling they have bought a treasure. When the coin price rises, they are reluctant to sell in time, ultimately leading to a situation where not only their paper profits disappear, but their principal is also trapped inside, and cutting losses becomes futile.
There are also excellent coins that fail to recognize their value, bought at low prices and sold at lows, only to see the price rise significantly afterwards, leaving behind regret and disappointment. In the current cryptocurrency market, it is characterized by a small market, lack of soundness, insufficient regulation, and varying project quality. Therefore, there is a basic principle: for long-term trading, only hold Bitcoin and Ethereum; for mid-term trading, focus on mainstream or popular coins; for most altcoins, only engage in short-term trading. Never hold with faith or adopt a passive ‘Buddhist’ approach. For mid-term and long-term trading, the best strategy is to choose coins with strong certainty and then dollar-cost average during the later stages of a downturn, minimizing average holding costs, increasing position size, and gradually selling during an uptrend. For short-term trading, one must be cautious, as short-term price movements are difficult to predict. For each trade, you must set a time limit, deciding at what price to buy, what price to sell, how much profit to take when predictions are correct, and how much loss to cut when predictions are wrong. You must have a clear plan and strictly execute it.
Do not extend holding time due to greed, or continue holding due to aversion to losses in anticipation of a rebound. These behaviors can turn short-term holdings into passive waiting for the mid- to long-term, ultimately resulting in being stuck. Of course, there is an exception when you determine that the coin you are holding is a potential or high-growth coin; in that case, you can transition your short-term strategy to a mid- to long-term strategy. Otherwise, strictly adhere to trading discipline.
There are several technical indicators that are more suitable for short- and mid-term trading.
For example, the Bollinger Bands; when the market reaches the middle band, observe the situation. Buy when it touches the lower band, sell when it touches the upper band, and take advantage of short-term low buying and high selling.
For example, the SAR parabolic indicator; in a small range (within 4 hours), when the K-line breaks through from below the SAR curve, it signals a buy. When the trend moves along the SAR curve upward and the SAR curve also moves upward simultaneously, it indicates that an upward trend has formed, and the SAR curve provides strong support. You can hold your coins and wait for a rise, or buy on dips.
When the K-line breaks downward through the SAR curve, the SAR curve forms a strong resistance zone, so selling is the primary action at this time.
The indicators I often use are the MA moving averages, which can be applied in both short-term and long-term trading. I focus on the trend of the MA60 moving average, while the MA30/MA90 moving averages can serve as auxiliary references.
Generally, when the K-line is above the MA60 moving average, the MA60 can be seen as a support line. Buying can be done in moderation near the support line, while selling can be done in moderation when the distance from the moving average is significant.
The MA60 moving average shows particularly significant effects when applied to mid- to long-term price analysis, as illustrated in the daily chart of Bitcoin below.
When the market price breaks below the daily MA60 moving average, the MA60 forms a resistance level. After a period of adjustment, when the K-line breaks through the MA60 moving average with increased volume, it indicates a market change and a rebound trend begins.
Whenever the market pulls back to near the MA60 moving average, it is a good opportunity to buy in moderation. During an uptrend, if the market breaks below the MA60 moving average again, it indicates a high-level consolidation trend; at this point, it is advisable to sell some holdings.
Of course, when using various technical indicators to analyze the market, it is essential to apply them flexibly, mastering one specific indicator or flexibly using multiple indicators, depending on your preferences and proficiency.
In general, trading is an art of thinking, highly practical, and tests individual ability and level. Moreover, feedback is particularly fast; any thought or decision can quickly receive feedback and verification.
Due to the complex and volatile market, it is impossible to blindly copy others' experiences; it more tests the ability to adapt to changing conditions. Therefore, investing is a very personal matter that requires you to invest a lot of energy and money to fill the gaps. Gaining without effort or trusting others is inadvisable. Everyone is welcome to discuss together.
