Hello everyone, I am Yan Chi, an old player in the cryptocurrency circle. I haven't written a long article for a long time. Today, after closing the short orders in the medium and long term, I am free from the empty positions and picked up the keyboard to give back to my long-term subscribers. If you have been subscribing to my content for a long time, you should know what kind of trader I am. First of all, I define myself as a medium and long-term trader. #广场狂热挑战赛
Why do I define myself as a medium- and long-term trader? I think short-term is not value investment. Short-term is more about mentality and position control. It has nothing to do with investment, but if you play short-term more, you can quickly complete the initial accumulation, or quickly leave this circle. Most people belong to the latter.
Of course, I don’t only do medium- and long-term trading. If there are good short-term opportunities, I will still trade. But I must keep an eye on the market because I focus more on price behavior.
Today I would like to use this long article to share some of my daily trading behaviors and some ways to avoid pitfalls.
1. Trend cycle
2. Support and resistance
3. Price Action
4. Borrowing tools
5. Position management
6. Active/passive opening and closing relationship
If this article is in some paid circles, it must be priced accordingly. Therefore, it is recommended that you take notes and increase your subjective awareness.
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Without further ado, let's start~#BTC
1. Determination of trend cycle.
Bitcoin has doubled since it rose from around 15555. After breaking through the key resistance zone of 25200, the important resistance level that can be used as a reference from the perspective of the K-line is the consolidation zone on the left, which is around 28000-32000. As shown in the figure below
Regarding the view after reaching 30,000, I have always been shorting in the medium and long term, which once made many friends say that I was a die-hard short seller. But I also gave enough logic for my bearish view. Let's repeat my view. If there are any mistakes, rational communication is welcome.
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I think the funds in the market are very limited at present. After the Fed's interest rate hike, the interest rate has reached 5.25, which means that you can deposit large funds in the bank and get more stable returns. There is no need to participate in more risky asset transactions.
Some newbies may think that banks have been going bankrupt recently, so who would keep money in banks? In fact, the Federal Reserve has come out and made a strong endorsement. Depositors' funds will be 100% protected. So how to interpret the fundamentals is very important.
However, the cryptocurrency market has never lacked hot topics for speculation. BTC was born for decentralized finance after the 2008 financial crisis, and became a hot topic for speculation after the bank crash. But is the bear market really over?
Under the bearish trend throughout last year, many people still did not recover and kept shorting, from 19800 to 30,000. After rushing to the 30,000 mark several times, under the fomo of the "teachers", they changed from shorting to longing. As a result, they suffered losses in both long and short positions, which is the problem faced by most people, not just a few people.
The chart I made below can explain most of the factors that led to the collapse of the banking system.
The root cause of bank failures: soaring deposit rates and fixed lending rates. Many banks have fixed lending rates. For example, last year and the year before last, due to the mask incident, the policy given to rescue the market was even 0 interest rate, or ultra-low interest rate lending.
The bank is equivalent to paying 5.25% interest to depositors, and can only get 1% or 2%-3% profit from lending out. In the long run, it is only a matter of time before it faces bankruptcy. So the charlatans who say that funds will flow into BTC and that the price will rise to 40,000 or 50,000 just because the bank goes bankrupt,
You can weigh it up. In fact, it is very simple to be a KOL, and the cost is very low. Many of the "teachers" you see are actually worse at doing business than you are. They just need to forward some second-hand information, delete and modify it themselves, and that is his so-called opinion. You must have self-judgment when doing business.
When you are complaining to him, he will tell you, I'm gone, you haven't left yet, have you?
But before entering the market, he will tell you, I told you to do it, why didn’t you do it? 😅
After the digression, returning to the market and the macro perspective, I don’t think there will be more room for upward movement in the short term. It can be said that the bullish fish tail market has ended and the bearish fish head market has officially begun.
But the current market situation is completely consistent with my analysis, falling from 3.1 to 2.66. Let’s look at the picture below.
Why would I close my medium- and long-term short positions near 26666 instead of seeing a lower price?
The last fig leaf of the bulls around 26666 can no longer hold, as we can clearly see from the chart.
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After breaking through 25220, the price of the currency came to 27000+, and then tested the support near 26666 many times, and then pulled up 5000+ points. Then 26666 formed the support and resistance area of the current market. So I think there will be a certain rebound here at 26666, until there is a larger supply to break through later. Then 23800 will come later. There are not too many chips to accumulate around 25200 to form key support. Of course, the market that has not come out is called prediction. Accurate prediction and wrong prediction need to go back and continue to review many times. In this way, the ability is improved and the ability grows.
Let’s look at Figure 1
Figure 1 shows the trend before May 19, 2021. Before the lower low in the red circle, the trend had been bullish, continuously creating higher highs and higher lows, until after creating a lower low, using the Fibonacci tool, the 0.618-0.666 dead cat jump area was rejected.
Let’s look at Figure 2. Before the red circle, the market continued to move in a long position, and then the Fibonacci retracement dead cat jump area was rejected. There were multiple obstructions at 0.618-0.666.
It further strengthens my belief that the cycle is over, the bullish fish tail and the bearish fish head market are coming.
26666 bulls’ fig leaf is broken, and the only ones who can hold on are around 24000. 25200 is an area where there are not too many chips to accumulate.
2. Since I have determined the cycle, the basis for my opening a position is to determine the key support and resistance of the cycle. If I go short, I must open a position near the resistance level. If I close a position, I also need to take profit in front of the key support.
As shown in Figure 1.2.3 below, (I have included points 2, 3, and 4 here) support and resistance, price behavior, and borrowing tools
The tools I use are fixed range deal distribution, Fibonacci,
Let's look at the left side. Before falling below 28,000, there was a consolidation zone of 28,600-32,000. The most concentrated point of chips in this consolidation zone is 30,000 integers. The key lies in price behavior. When it sprinted to 31,000, it was also around the release of last month's CPI data. When CPI dropped sharply from 6 to 5, under such a good fundamental stimulus, the price could not break through the key resistance. So is it what I told you last night, as long as the CPI data is good, it does not break through the resistance level, isn't it a negative performance? Fundamentals are not just about the surface, we should interpret the trend reflected on the K-line behind the fundamentals. Does it support us to make this transaction?
Price action is a hard and fast rule for me when trading.
Let’s look at last night’s chart and my shared views.
I have explained it very clearly about short-term trading. In short-term trading, you must watch the market and make transactions, while in medium and long-term trading, you only need to execute the plan.
Then the short-term price cannot fall below the key level of 28030, completing the retracement test of the effectiveness of the support. It will inevitably continue to test the more critical resistance level. The break is also in line with our short position expectations, because the positive CPI cannot break through the key resistance, and the US stock market has also made a key 2B false breakthrough and immediately fell back.
Many people say that the decline last night was because Americans sold their bitcoins, which caused the market to crash. I think this is a ridiculous statement. I suggest you stay away from those who dare to interpret it this way. Because he has no trading judgment at all, you can only continue to follow various fomo.
The Americans are selling Bitcoin, so why can the US stock market fall? Can the Americans selling Bitcoin drive down the US stock market? Bitcoin still cannot go through too many independent trends. Yesterday, both Bitcoin and US stocks had a false breakthrough of 2B, and then delivered after encountering resistance, plundering liquidity and then falling. So if you still think that the decline is due to the Americans selling Bitcoin, then it is not luck that makes you lose money in trading, but strength. Because you interpreted the fundamentals that should not be interpreted.
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But often many leeks will come out and say: "You just shouted to pay attention to the top, which made me do too much. Now the waterfall, what do you say I should do?" My own quality tells me that I really don't want to pay attention to you.
The leeks always like to shout out orders at certain points. They don’t understand how to trade independently, or how to open and close positions based on judgment.
For example, a certain "teacher" shouted: BTC 28180 short, 28350 add position, 28500 stop loss, take profit 27500 27200. Many people like this way of shouting orders, so why do I disdain it?
Before the price reaches 28180, how do you judge whether this is a good time to open a position? And how do you judge whether 28350 is a good time to add a position? Is it a trick?
Simply use support and resistance levels to open and close positions? If the profit and loss ratio is 1:1, you don’t need anyone to guide you at all, you can complete the transaction by yourself.
What is a 1:1 profit and loss ratio? It means that you close a position when you make $200 and close it when you lose $200. This is a 1:1 profit and loss ratio.
Therefore, when we see some points sent by some "teachers", we should not place orders in advance and follow the transactions, but borrow the data and review ourselves to see whether this is consistent with the support and resistance levels you have judged, and whether it is in sync with your trading system.
As shown below,
In the case of a rapid rise or fall, if you simply take a support resistance or Fibonacci measurement of 0.618 as the key support, and you open a position without judging whether the support can hold, it is a left-side transaction. It does not mean that left-side transactions are not advisable, but left-side transactions often have lower positions, and you need to confirm the stop-loss signal before adding positions.
Some "teachers" will even add a sentence after shouting the order, saying that only 3% of the position is used for trading.
3%, you can calculate it yourself, 10,000 U position, 10 times, 3% position is 30% of the total position to gamble and open orders, up or down ±10%, you can earn 30% of your total position, maybe you will lose 30% of the total position, your limit is 20%+. If it is 3% after 10 times, then only 0.3% of your total position is used, you don't have any risk of liquidation, but even if it doubles, your profit is also negligible.
When I say these words, I will offend many "teachers", but I am not trying to elevate myself or belittle others. After reading this, I hope that everyone will increase their self-judgment when following the views of any blogger.
Instead of calling someone a god when you follow the right one, and cursing when you follow the wrong one.
In fact, there are many teachers who are very good at short-term contracts, but I am not one of them. If I were asked to do 5-minute or 15-minute cycles, I might not do as well as you in front of the screen.
I often post this: You must keep reading someone's content. Only by reading it continuously can you tell what type of person this blogger is and whether he has a trading system, instead of shouting "bull" when the price goes up and "bear" when the price goes down. Take some time to screen. If you follow a lot of people and don't know their characteristics for a while, it's the same as not following them and wasting time. The most important thing is that you will lose money. 😄
In fact, the above content already includes several factors that I am going to talk about today, so what remains is position management.
How to open a position, there is really no need to talk too much about spot, I think having hands is enough. It is just like when you buy goods, you buy them in batches at different prices, and then sell them when the price is high.
So what I am talking about today is opening and closing contracts.
First of all, you need to determine how much money you are going to lose from this transaction, not how much money you are going to make.
I think it is difficult to earn 10,000 U, but it is quick to lose 10,000 U.
Let me explain this with an example.
When BTC was at 30,000, after various considerations, I decided to stop loss at 5,000U and make a short trade.
Then my position building method will use the 235 method. As the name suggests, 20% 30% 50%.
30000, enter at 20%, 30500 enter at 30%, 31000 enter at 50%, stop loss 5000U.
So I have planned the trade and set the position area. I then calculated the position in detail as follows
When 1 Bitcoin is 31,000, you need to lose 1,000U.
1.5 bitcoins, opening a position at 30,500, you will need to lose 750U.
2.5 Bitcoins. Opening a position at 31,000, you just entered the market.
So when it reaches 31,000, you have already suffered a floating loss of 1,750U, and your subsequent stop loss range can only be set based on 5,000U.
Your stop loss price is 32000. Before 32000, execute your medium and long-term plan. There is a saying: plan your trade, trade your plan.
So what about profit taking?
(1*30000)+(1.5*30500)+(2.5*31000)=153250/5=30650 is your average price.
When the trend falls in line with your expectations, for example, the current price is 29600, you should set your defensive stop profit at 30500. When I do medium and long-term transactions, I always follow a saying: either double the principal or take profits. I will never let myself lose money on profitable transactions. I will set a good defense, so that when the price returns to 30500, I can also pocket some profits after deducting the handling fee.
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The above is just an example. It does not mean that I am making an inference after the current decline of Bitcoin. Once you have determined the appropriate trading range, you can use this method to trade whether in the medium or long term or in the short term.
I think no one can analyze this step for you in such detail.
Watch and cherish it.
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If the price continues to fall after meeting your expectations, should we also take the initiative to stop profit?
You hold 1, 1.5, 2.5 BTC. Can we choose some key support points and sell the last 2.5 BTC you opened at 31,000? Why? To reduce risk and lock in profits. At least you can continue to hold half of your position and look towards your target position. Then push your own defensive profit-taking in batches.
For example, when the price has fallen below 28,500, your defense should be pushed to 29,000 or thereabouts.
As for the text examples, a novice still needs to watch them repeatedly before he can understand them thoroughly.
The threshold for trading is very low, but also very high. Some people read my technical analysis and can see that it should be so. Some people read my technical analysis and can only see that I am stupid. 😄Trading is also flexible and not static. There are too many things that can be interpreted in words. I hope everyone can gain something after watching it and make progress together.
There are replays in my live broadcast column. In fact, it is easier to understand what is said in the live broadcast.
Everyone is welcome to watch it.
PS：
Since I joined the Plaza, I have been sharing my years of trading experience and trying my best to empower people with the same frequency.
During this period, I received a lot of praise, but also a lot of criticism and even insults.
Many people would ask if they have something to ask for. It is impossible for a person to have no desires or requests. Indeed, Jesus and Moses, their principles were their requests. As for me, what I ask for is traffic.
It is a very happy thing to be recognized for free sharing. So, your traffic depends on you. 😘
Follow Brother Chi to share more transaction content.
If you have different opinions in the article, you are welcome to communicate rationally~
