It was through trading cryptocurrencies that I achieved class mobility and financial freedom! If there weren't opportunities in the crypto world, I might still be working overtime at some company, possibly facing difficulties from my boss. Or being challenged by clients! I have this chance to turn my life around. How many people spend their whole lives only to see this opportunity slip away! Or never have it at all! One day in the crypto world is equivalent to ten years in reality.
This is not just talk. "The crypto world is a place that easily inspires faith."
In 2024, we will start the crazy bull market early, and 2024-2025 will be extremely wild, unimaginable!!
1. Avoid revenge trading
When a trade is closed, whether profitable or at a loss, it is essential to firmly adhere to the rules. After executing a stop-loss, try not to look at it again within 24 hours. This effectively avoids revenge trading; opening a position driven by revenge emotions can easily lead to larger losses. Some believe that you should get up from where you fell, but before new entry conditions are triggered, it is more important to calmly observe. Since traders look at charts for hours daily, it is hard to resist the temptation to open positions again after a stop-loss. This is especially crucial when using leverage for swing trading; one must avoid a revenge mentality.
2. Avoid trading on weekends as much as possible
Every weekend, the volatility of cryptocurrency prices increases, and trading volume is small. This makes it difficult to predict short-term price movements. The reason is simple: weekend buy and sell orders are usually smaller, and market liquidity is lower, making it easier for whales to manipulate short-term prices, which exacerbates the disadvantages of retail traders. Additionally, since the cryptocurrency market operates 7×24 hours without stopping, the trading intensity is much higher than that of the stock market, and weekends are a good time to relieve stress and rest; after all, life is greater than trading.
3. Trade at specific times
As mentioned, the cryptocurrency market operates 7×24 hours continuously, never stopping. Even full-time traders cannot keep watching the charts all the time. To maintain a clear mind, set fixed trading hours for yourself. After opening a position during trading hours, set your take-profit and stop-loss, and then you can do other things. This eliminates the impulse to constantly check your phone or study K-lines, and trading won't affect your normal life.
4. Do not develop feelings for a specific asset
If you fall in love with the asset you are trading, it can easily lead to poor decision-making. Excellent traders use efficiency and rules to make money, giving themselves an edge because most people's trading behavior is dictated by emotion. "Be a trading machine without emotions" can ensure decisiveness and principle in trading. Many traders suffer significant losses because they easily become emotionally attached to specific altcoins, teams, or projects. This may be acceptable for medium to long-term investors, but it poses potential disasters for short-term traders.
5. Maintain simple trading rules
Traders usually combine various indicators, news, and K-line patterns to find suitable trading convergence points. This is not a problem in itself, but it is important to avoid over-analyzing, which complicates issues. In fact, when a K-line pattern that fits your system appears on the chart, you can start trading. At the same time, be sure to set good stop-loss settings and position control; this is especially important.
6. Only trade with the right mindset
When you feel angry, exhausted, or stressed about something, do not trade; your mindset will affect your judgment. The key to maintaining a good mindset is having other daily activities outside of trading. For example, fitness, reading, spending time with family and friends—all these help cultivate the right trading philosophy.
7. Keep a trading journal
Reviewing a trading journal can be tedious, but it is meaningful as it helps you avoid making the same mistakes. Both profitable and losing trades have specific reasons behind them; recording trade details is a way to learn and can help you grow quickly.
8. Do not attempt to catch flying knives
"Catching flying knives with bare hands" refers to traders attempting to bottom fish in assets that are crashing. The motivation to bottom fish is usually to lower the cost price and recover losses caused by a sharp decline. Trying to accurately bottom fish during a plunge is unwise. It is a more prudent approach to wait for stabilization and for resistance levels to turn into support before entering the market.
9. Do not ignore extreme market conditions
While referring to technical analysis indicators, we cannot ignore black swan events or other extreme market conditions. Ultimately, the market is driven by supply and demand, and sometimes the market can be extremely unbalanced.
Take the RSI relative strength index as an example. Typically, if the indicator is below 30, the asset can be considered oversold. Does this mean it’s safe to bottom fish? Not really! It only indicates that the market is under the control of sellers. In special market conditions, RSI may reach extreme values, even dropping to single digits or close to zero. Even then, it does not necessarily mean that prices are about to reverse.
Trading purely based on technical indicators can result in substantial financial losses. This is especially true during black swan events, as extreme price behavior can render technical indicators ineffective. The market can continue to move in one direction, and no analysis tool can prevent this trend.
10. Do not forget that technical analysis is a probability game
There is no absolute correctness in technical analysis; it is essentially a probability game. This means that no matter what technical methods you use to formulate strategies, you cannot guarantee that the market will operate as expected.
Technical analysis is just a form of prediction and should not be treated as a deterministic event for trading.
No matter how rich your experience or how impressive your track record, you cannot assume the market will follow your technical analysis. If you hold this mindset, you can easily overbet on a preset, leading to excessive risk exposure; the market will teach you a lesson in no time.
11. Do not overtrade
The number of trades is not positively correlated with profits. Even if the market offers multiple opportunities, try not to operate on more than three trades simultaneously. The more types and numbers of positions, the harder it is to manage risk. If multiple trades are stopped out, you may suffer significant losses.
Pioneer day trader Jesse Livermore said it well, "Money is made by patiently waiting, not by trading." We should strive to avoid trading just for the sake of trading. In fact, under certain market conditions, remaining an observer and waiting for opportunities can help us avoid many unnecessary risks.
What trading lacks is not opportunities; what is most precious is the capital. Every trader should formulate and refine a set of trading rules suitable for themselves. After summarizing failures and successes, make wiser decisions and improve trading success rates.
Finally, if you are a short-term trader, in principle, only allow yourself to make four types of trades. First, large profit trades; second, small profit trades; third, break-even trades; fourth, small loss trades. Stop-loss is counterintuitive, but it is one of the most important principles in short-term trading.
Some may say that short-term trading is speculation! First, I want to say that short-term is not speculation; true short-term trading involves mastering certain market operating rules and requires strong skills as an investment behavior.
Some may say that short-term trading is speculation! First, I want to say that short-term is not speculation; true short-term trading involves mastering certain market operating rules and requires strong skills as an investment behavior.
And even in speculation, we say it is essentially no different from investing; both involve buying low and selling high. Whether speculation or investment, success requires accurately grasping market trends, investment targets, and timing, while overcoming human weaknesses.
The so-called patterns can only be viewed as a concept from a probabilistic standpoint; there cannot be completely accurate judgments, because the entire market unfolds across multiple dimensions of emotion, information, etc., and the most difficult to predict is emotion. Therefore, we can only attempt to make rough judgments.
How exactly should we proceed? We need to learn to summarize historical trades, identifying what conditions appeared in historical trades and what patterns followed in subsequent trends.
In the middle of this, the role of K-line charts is indispensable. Besides reflecting short, medium, and long-term fluctuations, the most macro point is that it can tell you which projects have good market value management and which projects have faltered after being dumped and are purely cutting leeks. For example, we have mentioned before that there are many forked coins from BTC, and in fact, aside from BCH, the K-line charts of other forked coins are hard to read.
Just a few examples: Li Xiaolai's Super Bitcoin SBTC, Bao Er Ye's Bitcoin God bitcoin GOD, Bitxin BCX... Let's check out these coins' K-line charts on Mytoken:
The K-lines of these forked coins have been declining since the start, with basically no volatility, sliding down like a slide, offering no chance for retail investors to escape. It can be seen from their K-line charts that the large holders no longer have a lot of coins; these coins are concentrated in the hands of retail investors, so no one is pulling the market up, effectively becoming legacies. Many retail investors have traded these coins from short-term to medium-term, from medium-term to long-term, and from long-term to legacies.
Of course, there is another type of coin that is the complete opposite; it keeps going up without looking back, with no pullbacks at all. For example, the ARP coin I previously introduced, which shot up like a rocket, leaving many retail investors extremely excited and chasing the rise, fearing they might miss the chance for financial freedom.
So what should retail investors do when encountering such coins? First, try to avoid touching such coins, but if you enter, be sure to stop loss in time. The method is simple: always keep a mental red line, and once the price crosses that line, even if it's something you bought, you must sell it painfully; this is also a way to be responsible for yourself.
So what should retail investors do when encountering such coins? First, try to avoid touching such coins, but if you enter, be sure to stop loss in time. The method is simple: always keep a mental red line, and once the price crosses that line, even if it's something you bought, you must sell it painfully; this is also a way to be responsible for yourself.
As a newcomer to the crypto world, we should pay attention to a few points:
1. First, build confidence and experience through simulated trading before proceeding to real trading.
Pursue quality before quantity. In short-term trading, take it step by step, with the principle being to avoid significant losses.
3. Be content when making money and be rational when losing money. Trading cryptocurrencies is essentially the art of regret; we cannot demand too much from ourselves.
4. Practice yields true knowledge; if there are experts to guide you, consult them, and your progress will be faster.
If we can achieve the above four points, then at least as investors, we won't lose our way in the crypto world.
The focus is coming:
Next, I will lead my followers to invest in a few coins expected to rise by over 60%. Stop being like a headless fly buzzing around; follow my lead and let's achieve greatness together. If you want to follow the strategy, type '1' in the comments, and I will personally guide you.
Keep an eye on: doge, sui, cow, mask... these coins might be the next gold mines. Let's seize the tail of wealth together in the new era of blockchain.
