Nearly a decade ago, my trading journey began, but it was far from smooth. In my first three years, I invested 1.2 million yuan in the stock market, only to lose almost everything due to a lack of effective strategies. My portfolio dwindled to a mere 100,000 yuan, and I faced ridicule from friends and family who questioned my judgment and called me reckless. Their words cut deep, but rather than giving in to despair, I resolved to rebuild. I promised my partner this would be my last attemptโand I would approach it with calculated precision.
Determined to succeed, I dedicated months to studying market behavior, analyzing patterns, and refining my trading techniques. This unwavering commitment paid off: I transformed my remaining funds into 30 million yuan in just three years. The turnaround wasnโt due to luck but a disciplined approach grounded in clear strategies and continuous learning. Below, Iโll outline the principles and methods that helped me master the markets, offering insights for traders of all levels.
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Core Principles for Trading Success
1. Master Market Dynamics
Market sentiment is a critical indicator. Pay close attention to trading volume and price action.
A halt in price decline despite high volume often signals a bottom.
Similarly, if prices stall during high volume in an uptrend, it may indicate the rally is nearing its peak.
Rising markets with steady volume increases reflect strong trends, but abrupt spikes could suggest a reversal is imminent.
2. Pinpoint Critical Levels
Leverage technical tools like support, resistance, trendlines, and Fibonacci retracements to identify key price levels.
Respond decisively when prices approach or break these benchmarks, but always maintain discipline in execution.
3. Adaptable Timeframes
Use the 1-minute chart for precise trade entries and exits.
The 5-minute chart aids in managing short-term trades.
The 1-hour chart provides broader market trends and directional cues.
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A Streamlined, Effective Trading Strategy
This structured approach is beginner-friendly and, when followed with discipline, can yield consistent results:
Set Key Indicators
Incorporate three moving averages: 6-day (short-term), 20-day (medium-term), and 40-day (long-term). The 40-day average acts as a pivotal support or resistance line.
Phased Fund Allocation
Split your capital into three equal portions.
Invest 33% when the price breaks the 6-day average.
Add another 33% after crossing the 20-day average.
Allocate the final 33% when the price surpasses the 40-day average.
Exit and Reentry Rules
Exit positions incrementally as the price drops below each moving average.
Reenter trades using the same phased strategy if the price recovers and surpasses key averages.
This method, while straightforward, demands rigorous adherence to rules. Emotional trading or ignoring exit points often leads to losses. By embracing discipline and patience, youโll enhance your ability to navigate volatile markets with confidence. While no strategy guarantees success, this approach significantly increases your chances of achieving consistent and sustainable profits.