What are left-side trading and right-side trading?
When it comes to "left-side trading and right-side trading", I believe many people don't quite understand what it means, so today I will give you a simple introduction to the application of "left-side and right-side trading"!
1. When the price of the currency rises, the top of the currency price is used as the boundary. Any high selling on the left side before the "top" is formed is a left-side transaction, and any selling after the "top" falls back is a right-side transaction;
2. When the price of the currency falls, with the bottom of the currency price as the boundary, anyone who buys low on the left side of the "bottom" is a left-side transaction, and chasing the rise after the bottom is reached is a right-side transaction;
3. Sometimes, at the same price, there is a difference between left-side trading and right-side trading.
The left side transaction looks like this:
Left-side trading: common in institutions. The trading method of traders
Features: space measurement, capital division, rhythm control, key point grabbing, etc.;
Difficulty: Overcoming fear, accurate space measurement, accurate grasp of market rhythm and skills to seize opportunities;
For retail investors: It looks difficult but is actually easy.
The right side looks like this:
The fatal flaw of right-side trading: easy to understand and learn, but more mistakes than correct ones
1. In the confirmation technology, human weaknesses are not taken into account;
2. Retail investors have not received proper training on how to distinguish true from false indicators and patterns in their conventional education, so it is difficult for them to distinguish true from false.
Precautions
1. There is no difference between left-side trading and right-side trading, only the difference between suitability and inappropriateness. Generally speaking, left-side trading is more risky and more suitable for more aggressive and decisive investors. Right-side trading is more suitable for more stable investors. In China, most investors prefer right-side trading strategies.
2. The left-side trading strategy and the right-side trading strategy have completely different ideas and analysis methods. During use, the two operation strategies and ideas should not be confused to avoid affecting the operation and causing losses.
3. No matter which trading strategy you adopt, after you find the characteristics that suit you best, the most important thing to pay attention to during use is to strictly abide by the operating discipline and the profit-taking and stop-loss discipline.
The above is a brief introduction to some left-side and right-side transactions. After reading this, many people may be unable to resist and want to operate. Here I would like to remind some retail investors:
Ordinary retail investors should never believe in left-side trading, as it is a bottomless pit.
Left-side trading, commonly known as value investing.
It means starting to buy when the price of a coin drops to an undervalued area with a very high safety margin, and the more it drops, the more you buy.
Then, wait for the time period and capital cycle to see a restorative increase in the price of the currency, reflecting its true value and making a profit.
Right side trading, commonly known as trend investing.
Intervene after a token shows a clear upward trend, and follow the funds on the elevator, from undervalued coin prices to hype and then to overvalued coin prices.
Right-side trading does not require waiting time. You just need to grasp the trend and follow it to obtain profits from the capital premium.
As a small retail investor, right-side trading will obviously make more efficient use of funds and will bring better overall returns.
The "pitfall" of left-side trading
Why are some investment giants, such as Buffett, better at left-side trading, while small investors are not suitable for left-side trading?
Left-side trading is a poison for small investors.
There are two main reasons.
1. Unable to control the value range.
It is a false proposition for retail investors to engage in value investing.
So many major institutions, fund companies, and brokerage firms go to listed companies to conduct research and market research, and sometimes the research reports they produce are completely watery.
As an ordinary retail investor, how can you judge the value and how can you control the value range?
Many times, people think they have good performance, but after buying, not only does the price of the currency go down, but the performance also changes drastically and goes down all the way.
Retail investors know almost nothing about a listed company and can only predict its future prospects based on some public information.
However, I actually have no idea about the reasonable value range.
Therefore, retail investors can engage in value investing, but their search for value ranges is actually somewhat blind, or they can only rely on experience to judge.
In this regard, compared with large main institutions, we have more advantages because we have more comprehensive information.
2. No patience for time periods.
Large funds often have a more accurate grasp of time cycles than retail investors.
How many retail investors got a big bull, but sold their tokens at the beginning of the rise, just when they were untied.
When large funds conduct left-side trading, they are actively trapped, while when retail investors conduct left-side trading, most of them are passively trapped and hold the position passively.
Therefore, when there is any change in the price of the currency, especially when it comes to unwinding the position, retail investors will be eager to sell.
The trading mentality of retail investors is that they gradually lose themselves and begin to doubt during a decline, and become hesitant and confused during an uptrend.
The time cycle of left-side trading is very long, which makes retail investors suffer physically and mentally and unable to hold on to their tokens.
Large funds intervene with plans and confidence, while the patience of retail investors is based on being trapped. Once they are freed from the trap, they will naturally miss out.
Another point is that time is valuable. Large funds need to make arrangements, while retail investors can completely choose tokens that are currently rising.
There is no need for retail investors to wait for a cycle with large funds. They can often maximize the value of funds through trend trading.
Another important reason why big funds prefer left-side trading is the issue of capital size.
Due to the large amount of funds, if you choose to trade on the right side, there may not be so many chips in the market.
The left-side trading is during a panic decline, and the chips are actually relatively large.
You can buy all the way down and "bottom out" step by step until the market balances and the bottom is formed.
Of course, retail investors are not unable to make left-side trades. For companies that have conducted in-depth research on certain listed coins and are sure that they will perform well in the future, it is completely possible for them to make arrangements during the decline.
The prerequisite is that there must be clear performance expectations, rather than guessing future trends based on historical performance.
Advantages of Right-Side Trading
After saying that left-side trading is not suitable for most retail investors, let’s talk about the advantages of right-side trading.
First of all, we must understand that the rise in currency prices itself is not due to performance or subject matter, but simply due to the favor of capital for this token.
This is why there are always people who mention that tokens with good facilities do not rise, because they do not like the token with good facilities, that's all.
Similarly, a token always has a theme, so why didn’t it rise before but is rising now?
On the surface, the topic has exploded, but in fact, funds have begun to speculate on the topic, that's all.
Therefore, the source of all increases is the intervention of funds.
The intervention of funds naturally forms a trend in currency prices, which is right-side trading, commonly known as trend trading.
There is a cycle for the entry and exit of funds, so there is also a cycle for the formation and end of a trend. Right-side trading is to intervene at the beginning of the cycle and wait to leave after the cycle ends.
The biggest advantage of right-side trading is to follow the trend of funds, avoid time pits, and improve the efficiency of fund use.
You can understand it this way: gold will always shine, it’s just a matter of time.
The right side transaction itself is to follow the funds to pan for gold, and then take action after seeing the gold, which greatly reduces the time cost required for gold panning.
In addition, there are several other advantages to right-side trading.
1. Avoid floating losses and stop loss risks.
Left-side trading is to start buying and building positions during a decline. To put it bluntly, left-side trading often indicates floating losses.
However, there are many cases where paper losses may turn into real losses.
When you don’t have funds on hand and are in urgent need of funds, you must sell the tokens to cash out. At this time, if the tokens are still in a downward channel or there is no profit, you will face the embarrassing situation of stopping losses early.
To be precise, it is easy to incur actual losses due to stop loss.
Trading on the left side requires a long wait, while trading on the right side can perfectly avoid it and reduce unnecessary losses.
2. Avoid stock selection mistakes.
The second point is to avoid problems in project selection.
Retail investors are actually very weak in judging the quality of projects, but this is the strong point of capital.
The price of the currency has risen and funds have intervened heavily, indicating that funds have conducted in-depth research and analysis on this stock.
No large amount of money would be foolish enough to take over blindly. Only after careful calculation and consideration would one choose to buy.
Therefore, the probability of making money by following the funds to choose projects is much higher than choosing projects based on fundamentals yourself.
After all, funds are the driving force behind the rise in currency prices, not those empty performance results.
3. Be patient and hold on to maximize profits.
The final goal is to maximize profits.
If you buy a token and it goes up all the way, it is easier to hold on to the token for a long time without any psychological burden or pressure.
Some people may also say that they are afraid of high currency prices and may start selling before the price rises much.
In fact, this is normal, because when the price exceeds one’s cognition, one will panic and want to sell.
But in essence, the selling in this situation, compared with the selling after being trapped in the left-side transaction and being released, will take longer and the profit will be higher.
Several iron rules for right-side trading
In fact, most of the veterans in the cryptocurrency circle advocate right-side trading.
But it is not so easy to really do the right side of the transaction.
An excellent right-side trader is not like what everyone imagines, who checks the list of gainers every day and looks for stocks that break through the trend.
Instead, we first put those projects with outstanding themes and good fundamentals into our watchlist and wait for the right buying point signal to appear.
There are actually many iron rules for right-side trading, and it is not just about taking breakthroughs and chasing gains for granted.
First, the trend breakthrough is confirmed.
The first principle, I think there is no need to say much, is trend breakthrough.
But many people still don’t understand, which means it is called a trend breakthrough.
There are three confirmation signals for a trend breakout.
First, the currency price hits a short-term high, second, the currency price breaks through the long-term trend pressure, and third, the moving average turns upward.
It can be said that all three are indispensable, and this is the obvious confirmation signal of a trend breakthrough.
The first principle of right-side trading is to wait for clear signals before intervening, without any prior lurking.
Second, trading volume increased.
The establishment of any upward trend is accompanied by an increase in volume, and the end of any trend is accompanied by a decrease in volume.
This is an inevitable law, because this is how the capital cycle works, from entry to exit.
The increase in trading volume is an inevitable condition for the start of a trend, so it is also a principle that must be followed in trend trading.
Third, wait patiently for a false breakout.
Another key point is the false breakout in the trend.
This situation is very common. It seems that the price is about to break through, but after buying, it encounters a continuous decline.
At this time, you must not cover your position.
If the project you choose is promising in the long term, you can choose to lie low and wait patiently for confirmation of the next trend buying point.
If the project you choose is promising in the short term, there may be a risk of stop loss.
Fourth, wait for a pullback before adding to your position.
The last one is to miss the trend and wait for it to pull back to cover your position.
For some individual stocks, the trends that emerge are not long-term trends, but short-term trends.
It is very likely that after a trend buying point appears, the price will continue to rise if there is any hesitation.
In this case, it is recommended not to chase high prices blindly, because although the trend channel has been formed, the slope of the channel is not determined.
The best way is to wait patiently for the slope of the trend channel to become clear, and to increase your position when the stock price falls back.
Right-side trading is not as easy as imagined, otherwise all funds can choose to enter the market through right-side trading.
However, right-side trading itself is not complicated. It is a resonant behavior of a cluster of funds, which forms a trend and brings about a short-term premium in stock prices.
It would be wiser for ordinary retail investors, especially those who lack investment research capabilities, to choose right-side trading.
Don't be superstitious about the so-called left-side trading theory of some big guys. It is indeed correct for them, but it is not applicable to retail investors.
If you want to accumulate capital as quickly as possible in the cryptocurrency world, you must understand the essence of trend trading.
As for the bear market, left-side trading may be necessary, but if you can judge that it is a bear market, shorting is far wiser than left-side trading.
A small ship is easier to turn around, which is the biggest advantage of small retail investors.
Only by grasping the advantage of capital flexibility can you reap the dividends from the main force and earn the money you deserve.
Stock trading wisdom and life philosophy
The most difficult thing about stock trading is not stock selection, nor buying and selling, but waiting; the most difficult thing in life is not hard work, nor struggle, but choice.
If you can't hold on to the sand, let it go; if you have an opportunity that is hard to grasp, let it go! In the cryptocurrency world, necessary giving up is not failure but wisdom; in life, necessary giving up is not reduction but sublimation.
In life, what kind of mood you have will determine what kind of outcome you will have; in life, what kind of thoughts you have will determine how you live; in the stock market, what kind of actions you take will determine what kind of results you will get.
The winner says: Although this is difficult, it is possible; the loser says: Although it is possible, it is too difficult. Although this is only a small difference, it is destined to have different results.
In the cryptocurrency world, many people are not unwilling to steadily earn a small amount of money, but they are tempted and cannot control themselves when they see others earning more money than themselves; similarly in life, many people are not unwilling to accept new ideas, but are unwilling to abandon old ideas. But success does not lie in how much you get, but in how much you throw away.
What we can control is our efforts, but what we cannot control is the results. We cannot predict the future, we can only work harder now! The best way to prepare for tomorrow's transaction or tomorrow's life is to concentrate all your wisdom and enthusiasm to do today's work to perfection. This is the only way to deal with the future.
In the cryptocurrency world, no matter how strong you are, there are always people stronger than you; in life, no matter how outstanding you are, there are always people better than you. Only by continuous learning can you constantly improve yourself and become a wise person. So don't easily refuse to learn new knowledge, because you are not refusing others, but your own growth.
