Have you ever felt trapped in the trading game? That frustration of entering a trade and seeing the price move in the opposite direction is something many traders experience. I know you do too, that every time you get ready to make a move, the market seems to have a plan against you. I have had a trade with the RSI at an overbought or oversold level, where I had expected the price to reverse, only to have my stop loss hit and then, as if the market was laughing at me, go back on the path that would have led me to victory.
I noticed, and you will have noticed too, that 95% of traders on this platform are trapped not knowing if the market will turn in their favour again, not knowing whether to close the trade or hold it. Many unfortunately get liquidated without knowing what to do.
But what if I told you there is a way to change this narrative? Don’t follow the crowd; in trading, the herd is often heading for the abyss, so what you can do differently than the rest will make a huge difference in your trading. And here I will reveal to you a method that has worked for me and maybe just maybe, taking the fundamental pillars of it and adapting it to your way of trading can work for you too.
This message will reach very few, because very few are committed to generating profits in a professional manner and only want to be told about a crypto that will explode soon to take profits in 5 minutes and make 500%, without reading, without any effort, without preparation, as if this were not just another business that requires practice, deep knowledge of yourself and what you do, trial and error, and commitment.
If you are engaged, read the following lines carefully:
1. Understand the Importance of Statistics
Statistics allow you to analyze historical patterns and market trends. Certainly. But the statistics I am going to talk about and the ones that really matter are your statistics. Recording what you have been doing and what impact this has had on your trading is the most important thing you will need to do to achieve consistency in trading.
By studying your own past data, you can identify the behaviors you are repeating, and this will lead you to predict what you are doing wrong and what you need to change. Some key aspects to consider are:
- Emotions: Observe your emotions. If your entries or exits are drastic, you don't know exactly why you are entering and you don't know when to exit; you are not understanding what you are doing. The market is not there to prove you right or make you lose, it is not the platform that does not want you to win. There is something you still don't understand.
- Trading volume: If your trading volume is too high, take a moment to look at what you are doing because it is clear that you are losing a lot.
-Write down everything you do: Keep track of your operations, then you can graph them if you want, and reread what you have been doing. At the end of the year you will be able to understand your failures and continue improving what has worked for you.
If you want to know more about the statistical process, share this post with someone you can help and suggest it in the comments.
TACTICS FOR A SIMPLE STRATEGY
When I started trading, I only cared about the price and I saw the candles as a wave of profits to ride. And fear took over at every fluctuation contrary to my trade. I told myself that I had to get out because I would lose the little profit I had accumulated. This led me to a lot of frustration and losses.
So there's something I've been studying that's been sort of an indicator without being an indicator that's powerful in understanding what the market is doing, and I'll put it to you in a simple way:
The Volume
Cryptocurrency volume is an element that you should consider when entering into a trade. Not the volume bars, but the cryptocurrency volume in 24 hours. On its own, what it indicates is the number of operations that there are in the market at that moment, the purchases and sales. But in combination with the price, it will reflect if there is an increase in sales or purchases, a decrease, etc. Let's see:
- Confirms Trends: If the price is increasing and the volume is also increasing, this is usually a sign that the trend is strong (buying). Conversely, if the price is increasing but the volume is decreasing, it could be a sign that the trend is weakening (selling).
- Identify Reversals: A sharp change in volume can signal a potential trend reversal. For example, if you see a significant increase in volume after a prolonged decline, it might be time to consider a buy.
Many times you will see volume weakening a bit at peaks, sell signals, but it is not enough to enter a short. Why? Because at every peak there is always profit taking but there will not necessarily be massive sales unless volume increases while the price falls. What can happen is that the price can continue to rise after some sales.
Using the RSI
The RSI is a valuable tool for measuring the strength of a trend and detecting overbought or oversold conditions. Here's how to use it:
- Overbought/Oversold Conditions: You already know that RSI above 70 indicates overbought, and below 30 indicates oversold.
- Divergences: Pay attention to divergences between the RSI and price action. If the price is making new highs while the RSI is making lower highs, this may be a sign that the uptrend is losing strength.
You should take this into account as it will confirm your entry much more.
If there is overbought or oversold, it is not a direct signal to enter or close your trade, you must accompany it with volume and price action.
Price Action
Price action is fundamental to technical analysis. Here are some tips for applying it alongside statistics:
- Identify Supports and Resistances: Studying where they are will help you understand your price levels a little better. Where the price stops or where it can break. This analysis should be accompanied by volume.
- Candlestick Patterns: Candlestick patterns will help you read the price more easily. However, volume is king.
Final Tips for applying these simple steps:
- Practice: Before entering a trade, track the volume of the crypto. Analyze what moment of the market it is at (rising, falling). Check the news (use a website with an economic calendar to stay up to date). What day of the week it is and what time (On Fridays the volume goes down and depending on which side of the world you are on, however, in this market you can enter at 4 pm because that was the time that gave you the opportunity to take your entry).
The strategy is for intraday traders or day trading. 4-hour chart.
After 8 hours check how the trade is going and depending on the volatility you can take your SL to breakeven. Never go to bed without closing the trade or taking your SL to breakeven. You can also apply the trailing stop if you want to leave the trade open overnight.
-Keep a Record: Keep a trading journal where you write down your decisions and results. This will help you identify which tactics and strategies work best for you.
- Practice meditation or some relaxation method: Trading is emotional. Staying disciplined and calm is the best thing you can integrate into your trading. It will help you follow your analysis and statistics instead of reacting impulsively to market fluctuations.
Repeat every day, improve your ability to read what is happening in the market, study every day. If you don't like writing down, you can keep a voice record in Word with AI and also take screenshots of your screen to track the volume.
Conclusion
The statistical method emphasizes the use of personal statistics to support your trading decisions and is also based on the use of some relaxation technique, preferably pre-workout meditation.
This method is also based on the application of a strategy based on volume monitoring, RSI positioning and price action, with which you can improve your trading performance and increase your chances of success.
"Discipline is the bridge between your goals and your achievements. Without it, trading success is just a dream." Tony Robbins "The Holy Grail of Investing."
Remember, the key is practice and continued education. Start analyzing and trading with confidence!
These are times of reading.
