I've been where you are right now: desperate, trying everything imaginable, while watching other traders maneuver the market with surprising ease. What was I doing wrong? That question plagued me. The truth is, when you feel stuck, it's hard to see clearly what's actually working and what's not.

My path has been one of constant learning and practice. I’m not going to lie to you: I still make mistakes and face losses. But there is one key element that has made all the difference in my journey: my determination to not give up.

I decided to banish the fear of losing from my mind. But that wasn't enough; I had to work on my mindset. I'll tell you honestly: fear can become a monster that devours you, especially the fear of being wrong and going against the market trend without even realizing it.

Today, I want to share with you something that may seem strange, because few do it: a simple yet powerful strategy that will help you improve your trading. I want you to know that this will not take away from the internal work you need to do to avoid mental biases that can cause you to act out of fear, panic, greed, or FOMO.

Let’s explore together a basic yet effective strategy that combines 24-hour volume analysis with the Relative Strength Index (RSI). This technique will not only allow you to identify potential entry and exit points in the cryptocurrency market, but will also give you the peace of mind to trade with confidence and clarity.

Let's see:

Step 1: Understand the Basics:

-24-hour volume: The 24-hour volume of a cryptocurrency, whether in USDT (Tether) or the cryptocurrency itself (such as XRP, BTC, BNB), refers to the total amount of that cryptocurrency that has been traded in a 24-hour period. However, there is one key difference between these two types of volume:

-24 hour volume in USDT

This volume is measured in terms of USDT, which is a stablecoin that is pegged to the value of the US dollar. This volume provides a measure of the total value of transactions for a specific cryptocurrency in terms of dollars. It is useful for comparing trading activity between different cryptocurrencies as it normalizes the value of transactions to a common currency.

-24-hour cryptocurrency volume:

This volume is what I use for this strategy and is measured in terms of the cryptocurrency itself. It provides a measure of the total amount of that cryptocurrency that has been traded, without taking into account its dollar value. This volume can be useful in understanding the liquidity of that specific cryptocurrency.

Liquidity is crucial to knowing which way the price will move (fast or slow or if the market is range bound). On its own it simply tells you if there is liquidity going into or out of that cryptocurrency.

In combination with the candlestick chart you will be able to identify the direction of the price (whether it is going up or down) or whether it is moving sideways or contracting (which is what I call the tsunami effect).

Step 2: Identify volume scenarios on 4-HOUR chart:

1. Market disinterest

If the price and volume are falling, it may be a sign that traders are losing interest in the cryptocurrency. This could indicate a bearish trend.

2. Consolidation

A price decline that does not make new lows and a decrease in volume can be a sign that the market is consolidating before a major move. Usually there is a moment of volume contraction, you see how the volume falls, but the price stays in a narrow range, maybe it falls a little but always returns to the same high prices.

This is a crucial moment to know how to identify because it can be confused with a bearish movement. This is what happened after BTC hit 69K two days ago. Most expected a big downward movement, however the price moved in a narrow range, with liquidity leaving the market apparently because the volume began to decrease. Until today, the volume finally began to increase and with it the price of BTC.

3. Lack of liquidity

If the volume is very low, it can be difficult to buy or sell large amounts of the cryptocurrency without significantly affecting the price. This could contribute to the price falling. In these cases, the price usually remains at certain prices as a sign of consolidation or distribution where large investors are selling their positions to weaker hands.

4. Increase in volume

There are two moments where liquidity increases imply different scenarios. The first is when liquidity increases unexpectedly and the price falls, this will mean that there is a start of massive sales. The second is when liquidity increases and the price starts to increase, which implies that the price will start to rise with very few setbacks.

If you can't see what the price is doing well, you can go down to a 1-minute chart, but the analysis should be on a longer-term chart to identify what the market is doing in a broader and more secure context.

5.Reversal

The combination of rising price and falling volume can be an indication that the market is losing momentum. This can lead to a potential trend reversal, as the lack of support in volume suggests that there is not enough demand to keep the price at high levels.

The opposite is true when there is a price decrease on a dip but volume starts to decrease, there is a loss of momentum on the dip, meaning the price is reaching a potential bottom.

If you are trading against the long or medium term trend, monitoring volume will help you verify a possible price reversal and an early exit.

Step 3: Identify the price on the RSI

The RSI (Relative Strength Index) is an oscillator that measures the speed and change of price movements. Typically, an RSI above 70 indicates that the cryptocurrency is overbought, while an RSI below 30 suggests that it is oversold. And at 50 it means that the price is taking a pause before taking a new direction.

Checking where the RSI is at the time of analysis will help you have greater confidence when entering the market.

Identify whether there is positive or negative divergence. This translates into a higher probability of a positive trade.

Step 4: Setting Up the Strategy

1-Select the Crypto: Start by selecting a cryptocurrency you are interested in and check its 24-hour volume. Note that volume and make sure the volume is not too low, as this can make it difficult to execute orders.

2-Identify what you are doing and write it down to keep track of volume and price.

3- Apply the RSI: On your trading platform, apply the RSI indicator to the cryptocurrency price chart. Set the period to 14, which is the commonly used value.

See if there is any divergence, overbought or oversold, or if it is below 50 or above. Write it down.

Step 5: Identify Trading Opportunities

- Buy Signals:

- Watch for when the RSI drops below 30, indicating that the cryptocurrency may be oversold.

- Confirm this signal with an increase in volume. An increase in volume when the RSI is low can suggest that buyers are entering the market.

There are other buying opportunities when the RSI is below 50 and there is a price reversal, we see how the volume that was low begins to increase slightly with the price increase or we begin to see an increase in volume in a narrow range. (You will learn this through observation, there are many scenarios that you will identify when you begin to see how the volume and price evolve together).

- Sales Signals:

- Pay attention when the RSI rises above 70, which may signal that the cryptocurrency is overbought.

- Check to see if volume starts to decrease. Decreasing volume during a high RSI could indicate that buying momentum is running out.

There are other signs that you can identify to go short but you will see them, such as a sudden increase in volume and the price begins to fall and you have already seen that the crypto was in a range or sideways, there you can establish a quick sell order to take quick profits.

Step 5: Risk Management

- Set Stop-Loss: To protect your capital, set a stop-loss level that does not represent more than what you will earn from that trade. You can use Coinglass' leverage heatmap to check where the price might go to seek liquidity.

Never enter a trade without first placing a SL (the market can move quickly against you).

- Profit Target: Set a profit at a liquidity zone or a point where the price has previously been making a double top, a channel or some other setup that allows you to be fair in your profit.

Don't go to sleep without having moved your SL to the entry or without having closed. Decide whether to take your profit or wait for the market to develop the strategy. The important thing is to protect your capital. This strategy is for swing traders as it usually develops in 2 or 3 days.

Never enter a trade without checking its volume, RSI and price configuration.

Always remember to do your own research and practice before risking a lot of money. The leverage will depend on the crypto but it does not exceed 10x.

Choose at least 3 to 5 cryptocurrencies that you can apply the strategy to and then get to know very well.

The key is to learn, adapt and improve with each operation.

I hope you find this guide useful and wish you success in your journey as a crypto trader. Share this post to earn some cryptos that Binance is giving away for sharing links. Let me know your questions in the comments section.

The recommended book to learn the basics of trading is Technical Analysis of Financial Markets by John Murphy, very soon you will have access to this much more developed guide to crypto trading on Amazon.

"Success in trading doesn't come from luck, but from a well thought out and executed strategy. Stick to the plan" Jess Livermore

These are times of reading.