Many people dive into the cryptocurrency space with dreams of instant wealth, yet fail to realize that this urgent mindset is precisely the beginning of failure. True experts in the cryptocurrency space regard accumulating coins as their foundation, steadily building wealth step by step.
Accumulating coins is a stable and highly visionary investment strategy.
When you chat with friends in your leisure time and mention your involvement in the cryptocurrency space, if you do not have even a single valuable digital currency in your pocket, how can you confidently consider yourself a "big player" in the crypto world? It is like a scholar who claims to own numerous books, yet their study room is empty, making it hard to believe. Having a certain quantity of quality coins is not only a symbol of strength but also a foundation for long-term development in the cryptocurrency space.
Contract trading in the cryptocurrency space is like a double-edged sword; it can be a shortcut to obtain high profits in the short term, but it also hides enormous risks. Many are attracted by the high leverage and high returns of contracts, diving in headfirst, only to end up losing everything. In contrast, accumulating coins is more like a long marathon; although the process lacks the thrilling ups and downs of contract trading, persistence often leads to unexpected gains. Contracts may just be an interlude on the path to wealth, while accumulating coins is the key pathway to ultimately reaching the shores of wealth. It must be clear that the cryptocurrency space is not a place where you can become rich overnight. Those who expect to achieve financial freedom instantly often end in disappointment. However, this does not mean that there is no profit to be made in the cryptocurrency space. By learning professional techniques and deeply understanding market operating rules, investors can achieve substantial returns in the cryptocurrency world. Just like an experienced fisherman, understanding the habits and movements of fish can lead to a bountiful catch in the vast sea.
In this regard, Teacher Chain God, with years of experience in the cryptocurrency space, has summarized a set of effective trading mantras, which are precious wealth for newcomers to the cryptocurrency world and investors seeking breakthroughs.
1. "Buy sideways, don’t buy vertically; the selling point is when things are boiling": This mantra emphasizes that in investment, one should choose cryptocurrencies that are in a sideways consolidation or pullback phase, and avoid chasing after a straight upward surge. When market sentiment reaches a boiling point and everyone is frantically buying, it is often the best time to sell. For example, in some cryptocurrency price trends, when it experiences a long period of sideways movement and then suddenly starts to rise, the risk of entering at this point is relatively low; but when the price skyrockets in a short time and the market is cheering, investors need to be cautious and consider selling at the right time.
2. "Continuous small rises are real rises; continuous large rises mean exit": Continuous small increases indicate that the upward trend of the cryptocurrency is relatively stable and is a gradual recognition of its value by the market. Conversely, if a cryptocurrency experiences continuous large increases, this is likely a signal of market overheating, which may involve artificial speculation, at this time investors should decisively exit to protect profits. For example, some emerging cryptocurrencies may attract investor attention with stable small increases in the early stages, but when they suddenly experience continuous large rises in a short time, it is often followed by a price correction.
3. "A significant rise requires a pullback; don’t dig deep pits and don’t buy large amounts": When the price of a cryptocurrency rises significantly, a pullback adjustment phase will inevitably follow. Investors at this time should not blindly chase high prices but wait for the price to pull back to a certain depth, forming a clear 'deep pit' before entering. This can effectively reduce investment risk and increase profit potential. Taking Bitcoin as an example, its price has undergone deep pullbacks after multiple significant rises, providing excellent entry opportunities for those who patiently wait.
4. "The main rise accelerates to see the top, sell quickly on a sharp drop and sell slowly on a slow rise": When a cryptocurrency enters a main upward trend and accelerates upwards, this is usually a signal of reaching the top, and investors should be prepared to exit at any time. During the price decline, if there is a sharp drop, it may be a momentary release of market panic, and one should decisively sell; if it is a slow decline with increasing volume, it indicates that the market is gradually digesting negative factors, and one should also exit quickly. In some altcoin trends, it is often seen that the main rise accelerates and then quickly reaches a peak; if investors cannot notice in time, they will fall into a trapped situation.
5. "A sharp drop with low volume is intimidation; a slow drop with increasing volume means evacuate quickly": If the price experiences a sharp decline in a short period but the trading volume does not significantly increase, it is likely a washout tactic by the main force, aiming to scare retail investors into giving up their holdings. Conversely, if the price declines slowly with continuous increasing volume, it indicates that investors in the market are selling off in large quantities; at this point, investors should evacuate quickly to avoid further losses. In actual trading, many investors panic-sell during sharp drops with low volume, while being overly optimistic during slow drops with increasing volume, ultimately leading to losses.
6. "When the price breaks the lifeline, do not hesitate to make a swing trade": The lifeline here can refer to a key moving average; when the cryptocurrency price breaks upwards past this lifeline, it indicates that the market trend may reverse, and investors should seize the opportunity for swing trading, buying low and selling high to gain price difference profits. For example, when the Bitcoin price breaks the 200-day moving average, it often leads to a considerable upward trend, and investors can engage in swing trading accordingly.
7. "Carefully observe the daily and monthly lines, build positions with the main force": The daily and monthly lines can reflect the long-term trends and market direction of cryptocurrencies. By carefully analyzing the daily and monthly charts, investors can better grasp the movements of the main players and build positions following their pace. For instance, when the main players start accumulating heavily on the monthly chart, investors can also follow in time to share in the future upward dividends.
8. "If the price rises without volume, don’t stand guard against the main force's bait": If the price of a cryptocurrency rises without accompanying trading volume, it is very likely that the main force is deliberately driving up the price to attract retail investors to follow suit, thus achieving the purpose of unloading. At this time, investors must remain clear-headed and not blindly chase after high prices to avoid becoming the 'leeks' left standing. In some cryptocurrencies with serious market manipulation, this kind of volume-less rise often occurs, and investors need to be especially vigilant.
9. "A new low with shrinking volume is a bottom signal; an increase in volume during a rebound means it’s time to enter": When the price continues to decline and the trading volume gradually shrinks to an extremely low level while creating a new low, this is often a signal that a bottom is about to form. When the price begins to rebound and trading volume increases simultaneously, it indicates that the bullish forces in the market are starting to strengthen, and investors should decisively enter. For example, in some historical price trends of Ethereum, there have been occurrences of new lows with shrinking volume followed by rebounds with increasing volume, providing precise entry timing for investors.
These mantras may seem simple, but they contain profound market wisdom and are valuable experiences summarized by countless investors in practice. They are like a bright lamp, illuminating the path for investors in the cryptocurrency world; as long as they are remembered and flexibly applied in practice, many detours can be avoided.
In cryptocurrency trading, in addition to mastering these practical mantras, it is also necessary to deeply understand the 'techniques' in trading, namely the application of technical indicators. In secondary market investments, we can divide investments into three levels: Dao, Fa, and Shu; these three complement each other and are all indispensable.
The Dao: It represents the investment philosophy and belief, which is the investor's macro understanding of the entire market, including judgments on long-term market trends, analyses of macroeconomic conditions, and studies of investment fundamentals. For example, investors who firmly believe that blockchain technology will have a profound impact on the future world are more inclined to long-term invest in quality digital currency projects, rather than being swayed by short-term market fluctuations.
Fa: This level involves the laws and rules of investment, covering the formulation of investment strategies, methods of risk management, and techniques for asset allocation. For example, investors can formulate a reasonable investment portfolio based on their risk tolerance, diversifying their funds across different types of digital currencies while setting stop-loss and take-profit points to control investment risks.
Shu: Mainly refers to technical analysis, quantitative analysis, and the grasp of trading psychology in investment. Technical analysis predicts future price trends by studying historical prices and trading volumes. Although technical indicators have a certain lag and cannot guarantee profits directly, mastering commonly used technical indicator methods can help investors better understand market dynamics and make more rational investment decisions. For instance, by using moving averages, the Relative Strength Index (RSI), etc., investors can determine market buy and sell signals and set entry and exit points.
In trading, the application of 'techniques' is crucial. For most investors, there is no need to pursue overly complex and obscure technical indicators but to master the analysis methods of commonly used technical indicators. By deeply studying these indicators, investors can better interpret market signals and seize investment opportunities, achieving stable returns in this challenging realm of cryptocurrencies.
In summary, in cryptocurrency investment, we must abandon the wrong mentality, with accumulation as the core strategy, remember the trading mantras, and master the application of technical indicators, only then can we move steadily in the waves of the cryptocurrency world and achieve wealth appreciation.
The path to trading cryptocurrencies is the same, from seven losses to two break-even and then to one profit, it is nothing more than being focused and not greedy for various profit models; firmly doing this one trading system, over time this system will become your cash machine.
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