Attention, friends in the global cryptocurrency circle!! Here is a piece of advice for everyone in the cryptocurrency circle! If you don’t plan to leave the cryptocurrency circle in the next three years, and want to change the current situation of losses, or even successfully turn the tide!
When trading cryptocurrencies, you should pay attention to the following dry goods and methods that I will share with you, but I will only say them once!
Investment or speculation?
Have you noticed that what we have been talking about is "speculation" instead of "investment" as we often say? What is the difference between these two words?
(Foreigner Economics) says that "investment" is long-term holding to earn dividends, and "speculation" is short-term profit by buying low and selling high or selling high and buying low. So, if you want to invest in blockchain, then find a project you think is good and give the money to the project owner, then go back and burn incense. The rise and fall has nothing to do with you. If you want to speculate in coins, you must clearly understand that we are speculating in coins, and the quality of the project has nothing to do with me.
(1) Watch the price, candlestick charts; a pricing method invented by Japanese rice merchants during the Edo period, now widely used in various speculative markets.
It should be noted that in most domestic markets, green indicates a decline and red indicates a rise. Red is seen as auspicious by the Chinese. However, most foreign exchanges, including the virtual currency market's BETA codes, come from abroad, where red indicates danger and is used to describe declines, so the price should be viewed inversely.
Arrange candlestick charts according to the timeline; this is called K-line, which visually represents price changes over time.
(2) Trading volume.
The red and green columns at the bottom of the trading interface, resembling fences, represent trading volume, indicating how many coins were sold by Wang to Li and bought by Zhang from Li in a given time period. The higher the column, the busier the trading.
(3) Moving average.
The full name is moving average; it adds and averages several closing prices from candlestick charts to derive a value, then marks this value and connects the dots. This 'several' can be set to several values, generally set at 5, 10, 20, 30, and 60 moving averages, not for anything else but to look professional with colorful lines.
Technical analysis theory believes that when the short-term moving average crosses above the long-term moving average, the trend is upward; conversely, when it crosses below, the trend is downward. This is the ancestor of technical analysis strategies. Almost all technical analysis fundamentals have evolved from here.
There have been masters in the stock and futures markets who succeeded using only one moving average.
(4) MACD.
Slightly more professional indicators are also used quite frequently. The academic name is 'Exponential Moving Average,' which can be found in some trading software. The algorithm is somewhat complex; interested traders can search and study the principles on their own. The most basic usage is similar to the moving average mentioned earlier, where a short-term moving average crossing above a long-term moving average is viewed as an upward trend and vice versa for a downward trend. A more advanced usage is called 'top divergence' and 'bottom divergence,' where a moving average moving down while MACD moves up may form a bottom; a moving average moving up while MACD turns down may form a top. From historical data, the hit rate for 'top divergence' and 'bottom divergence' is still relatively high.
But MACD is not suitable for dealing with volatile markets.
Going deeper, there are also random indicators like KDJ, ASI, Bollinger Bands (BOLL), BRAR indicators, W&R indicators, and so on. After the advent of computers, quantitative and algorithmic trading using programs to automatically calculate indicators began. In recent years, methods using artificial intelligence and unsupervised learning to analyze market conditions have also emerged.
Human desires urge these technical analysts to constantly seek the Holy Grail within the indicators, hoping to find a universally applicable indicator, like searching for a money tree.
I was once obsessed with this as well, not only deeply analyzing the author's design ideas after each indicator but also designing a large number of algorithmic trading indicators for real trading. However, the results were not ideal. Some codes with a 90% hit rate in backtesting had significant effects for a while, but after some time, they performed poorly. Conversely, some very simple indicators, with a success rate of only around 60%, could handle most market conditions.
After former Goldman Sachs quantitative trading programmer Alenikov was arrested, he mentioned that his job was merely to maintain a quantitative trading code, which consisted of 6 million lines, incorporating countless different ideas of quantitative trading models and indicators. Ultimately, the actual market effect was not as ideal as originally designed.
The reason for this is not understood until long after giving up. In fact, the 'Tao Te Ching' states, 'The Way that can be spoken of is not the eternal Way' and 'The nameless is the beginning of heaven and earth; the named is the mother of all things.' The foundation of all technical analysis indicators is mathematics, a tool created by humans to measure the world. When facing human nature, an unquantifiable measure, any mathematical formula can only approach human nature but can never perfectly describe it. When facing the impact of human nature on market conditions, even the best indicators will be somewhat distorted.
So should we stop using technical analysis? Not necessarily; technical analysis can provide excellent references for our speculation. The current usage is based on the relatively primitive technical analysis indicators I designed back then.
But since technical analysis indicators cannot guarantee a 100% hit rate, why do we still use them? In fact, this part of the explanation is the core of technical analysis theory.
How to trade coins | At least avoid 90% of losses!?
In recent years, the drastic fluctuations in cryptocurrency prices have become commonplace. This instability is largely caused by market sentiment, and even seasoned investors may irrationally bet on coins of unclear value due to the fear of missing out.
After experiencing a wave of bull and bear markets, many people realize that most altcoins are not as good as what their white papers say, and some even planned to take advantage from the start. To avoid losses caused by blindly following trends, remember this: In trading coins, mindset is more important than technique; make money in a bull market, accumulate coins in a bear market, don’t cut losses in a bull market, and stockpile in a bear market.
3! Coin stocking method.
Suitable for both bull and bear markets. The stockpiling method is the simplest yet most difficult way to play. It’s the simplest because it involves buying a coin or several coins and holding them for over half a year or a year without trading. Generally, the minimum return is tenfold. However, beginners find it easy to see high returns or encounter price drops and plan to switch or exit; many find it hard to resist trading for a month, let alone for a year. Therefore, this is actually the most challenging part.
Bull market chasing method.
Only suitable for a bull market. Use a portion of spare funds, preferably no more than one-fifth of your total funds. This strategy is suitable for coins with a market cap between 20 and 100, as they won't be stuck for too long. For example, if you buy the first altcoin, wait until it rises by 50% or more before switching to the next coin that has dropped sharply, and repeat the cycle. If your first altcoin is stuck, just wait; the bull market will definitely provide an opportunity to break free. The premise is that it should not be a scam; this method is also not easy to control, so beginners need to be cautious.
Hourglass vehicle exchange method.
Suitable for a bull market. In a bull market, basically any coin you buy will rise; funds are like a giant hourglass slowly seeping into every coin, starting with the larger coins. The price increase follows an obvious pattern, where the leading coins rise first, such as BTC, ETH, DASH, and ETC, followed by mainstream coins like LTC, XMR, EOS, NEO, and QTUM. Then, coins that have not risen will all rise together, such as RDN, XRP, ZEC, etc., and finally various smaller coins will take turns rising. However, if Bitcoin rises, you should choose the next level of coins that have not yet risen and start building positions.
Pyramid bottom-fishing method.
Suitable for predicting significant crashes. Bottom-fishing method: place orders to buy 10% of your position at 80% of the coin price, buy 20% at 70%, buy 30% at 60%, and buy 40% at 50%.
Moving average method.
You should understand some basic candlestick patterns. Set indicator parameters as MA5, MA10, MA20, MA30, MA60, and choose a daily line level. If the current price is above the MA5 and MA10, hold your position. If MA5 falls below MA10, sell the coin; if MA5 rises above MA10, buy to build a position.
Violent coin stocking method.
Trade coins you are familiar with; this is suitable for long-term quality coins. Have a certain amount of liquid funds; if a coin is currently priced at $8, place a buy order at $7. Once the buy order is executed successfully, place a sell order at $8.8. Use the profits to stockpile coins. Take out the liquid funds and continue waiting for the next opportunity. Adjust dynamically based on the current price. If there are three such opportunities in a month, you can stockpile a lot of coins. The formula is: buying price equals current price multiplied by 90%, selling price equals current price multiplied by 110%.
Aiso violent compound interest method.
Continuously participate in ICOs; once a new coin rises by 3-5 times, withdraw the principal and invest in the next ICO, allowing the profits to continue circulating.
Cyclic wave method.
Look for coins like ETC that are undervalued; increase your positions when the price keeps falling, continue to add more as it drops further, then wait for a profit before selling, and keep repeating this cycle.
Small market violent play.
If you have 10,000 RMB, divide it into ten parts, buy ten different small coins, preferably priced under 3 RMB. After buying, don’t pay attention. Don’t sell until it triples to five times; if it gets stuck, just hold on and turn it into a long-term investment.
If a coin triples, withdraw the principal of 1000 RMB and invest in the next small coin. The compound interest returns can be quite impressive!
The methods above are suitable for beginners; it is advised to study them slowly! Choose the methods that suit you. After building positions, continue to hold steadily. Don’t sell if you’re not making a profit; if you’re stuck, you need to hold even more firmly; don’t cut losses.
#VeteranCoinTraders#
1. Judge the trend of a coin, predict a trend for over a month. Most trends occur within a month, and the only trend is upward. Therefore, build positions at low points, do not trade, and do not make waves; wait a month to see the returns. Tripling does not necessarily mean selling, as quality coins can multiply by dozens or even hundreds. Alternatively, for conservative operations, double your capital and continue holding the profits.
2. Do not engage in any short-selling or buying operations, especially in futures; these are extremely difficult and can instantly blow your positions in a reverse market. In a declining trend, it’s better to get stuck than to short. Because in long-term trends, you will definitely have the opportunity to break free.
3. Price predictions are often deceptive; you can only roughly judge the overall trend, and leave the rest to time. Do not become overly obsessed with technical analysis; in trading, stock-style technical analysis is not particularly effective and should only be used as a slight reference.
4. Don’t bet too much; use spare money to play. Your psychological pressure will be much lighter. Trading should not be your life. If you profit from a full position in one coin, take the profits and leave the principal to play.
5. In the world of trading, getting something for nothing yields the greatest returns. Don’t think that the more you operate, the more you earn. What you need to do is pick one or two good coins and hold them, or if you have spare funds, invest regularly, treating it like a wealth management tool. The greatest returns often come from buying a coin, forgetting about it, and then looking back years later.
6. Position control and risk management are very important. Many people operate the same coins, but their returns are far lower than others. This is because everyone's timing for building positions is different. Since you can't buy at the lowest price, don't go heavy; it's best to be light on coins bought at high prices. Low-price positions are always your safety zone. Position control means allocating a suitable amount to several good coins. Generally, I suggest beginners: Bitcoin to altcoins to liquid funds in a ratio of 1:1:1. Also, learn to build positions in batches; build part of the position at the current price, and add more if there is a sharp drop, which can keep your cost price for each coin very low.
7. Don't spend all day watching the market or thinking about trades. Money is external; your main focus should be on sleeping well, working, and eating.
In trading, there is a particularly practical but seemingly foolish method that can actually be quite powerful, helping you earn steadily. To trade well, there are three things you must absolutely avoid.
When speculating, never rush to buy when prices are rising; you must learn to think inversely. When others are scared, be brave and look for buying opportunities; conversely, when everyone is overly excited, consider whether it’s time to withdraw.
Speculate but never bet all your money on one coin; doing so carries too much risk. Once a problem arises, everything might be lost. Diversify investments; if one side does not shine, the other side will. This is the steady way to profit.
Speculate but never operate with a full position; keep some spare funds. There are plenty of opportunities in the market; if you are fully invested, once a good opportunity arises or you need to adjust your strategy, you won't be able to act. That would be a big loss! Keep some money to respond flexibly, and the opportunity cost will be lower.
In trading coins, stability is paramount. Don't think about making big money all at once; take it slow, learn this simple method, and it will ensure you can survive in the market for a long time while also making profits.
Next, let’s delve into the wisdom rules of short-term trading.
Rule one: High position consolidation or new highs may emerge; low position hovering may indicate new lows. Observe changes calmly, wait for the direction to become clear, and only act when it’s appropriate. This is the path of stability.
Rule two: Stay still during consolidation, keep a calm mind. Most people fail because they cannot endure loneliness; only by maintaining this tranquility can they achieve greatness.
Rule three: Candlestick patterns indicate buy and sell opportunities. A daily line closing lower may indicate a buying opportunity; a daily line closing higher suggests considering reducing positions. This is the method of following market rhythms.
Rule four: Slow declines and slow recoveries; sharp declines and recoveries are possible. The market fluctuates according to its own laws; understanding this principle allows you to seize opportunities.
Rule five: Pyramid-style position building is the essence of value investing. Gradually increase your positions steadily, trading time for space, and patiently await the blooming returns.
Rule six: After a rise or fall, there must be consolidation. At this time, it is unnecessary to fully sell due to high prices or to heavily invest due to low prices. Because after consolidation, a change will soon come. If it falls from a high point, you should promptly stop losses to preserve your strength and wait for another chance.
On this investment path full of uncertainty and challenges, may we all become the calmest observers and the bravest explorers, sailing towards the shore of wealth with wisdom as our boat and patience as our sail.
Playing around in the coin circle is essentially a battle between retail investors and whales. If you don’t have cutting-edge news or first-hand information, you can only get cut! If you want to make a layout together, comment 333! Like-minded coin enthusiasts are welcome to discuss together!
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