From Struggles to Success: My Proven Crypto Trading Strategy
I have been trading for nearly a decade, and my journey has not been without challenges. In the first three years, I invested 1.2 million yuan in the stock market. However, due to a lack of proper strategy, I ended up losing most of this investment. My balance dropped to only 100,000 yuan, and I became the target of ridicule from my friends and family, who called me irresponsible and crazy. Their harsh words made me question myself, but I was not ready to give up. I promised my partner that I would make one last attempt with the little I had left.
I spent months analyzing charts, learning from my mistakes, and developing my own set of trading principles. The result? I turned 100,000 yuan into a remarkable 30 million yuan in just three years. It wasn’t luck; it was the result of disciplined trading and continuous learning. Now, I’m going to share my key strategies and principles, so you can apply them too.
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Key Trading Principles for Beginners and Professionals
1. Understanding Market Sentiment
Market emotions are a valuable indicator. Pay attention to trading volume and activity.
If volume is high but price stops falling, it often indicates that the decline is coming to an end.
If volume remains strong but prices stop rising, the uptrend may be coming to an end.
During an uptrend, moderate and consistent increases in volume suggest a strong rally, while sharp spikes in volume may indicate a reversal.
In a downtrend, increased volume breaking through key levels confirms continued decline.
2. Identify Critical Price Levels
Recognize resistance, support, and trendlines on the chart. Tools like Fibonacci retracement can help predict important levels. Be quick to react when prices approach or break through these points.
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Effective Time Frames for Trading
1 Minute Chart: Best for precise entry and exit points.
5-minute chart: Useful for tracking short-term price movements.
1-Hour Chart: Ideal for identifying general market direction and trends.
Important Tip: If a trade moves against you, don’t rush to immediately recover your loss. Accept the loss, reset your mindset, and approach the next trade as a new opportunity.
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Simple and Highly Profitable Trading Strategy
This method is beginner-friendly and, with discipline, can be effective for anyone. Here's how it works:
1. Use Moving Averages
Apply three moving averages to your chart:
6-day moving average (short-term trend)
20-day moving average (medium-term trend)
40-day moving average (long-term trend)
The 40-day moving average serves as a key support or resistance level.
2. Allocation of Funds
Divide your capital into three equal parts:
Phase 1: When price crosses the 6-day moving average, invest 33% of your capital.
Phase 2: If price crosses the 20-day moving average, invest another 33%.
Phase 3: Once price crosses the 40-day moving average, invest the remaining 33%.
3. Exit Strategy
If the price falls below the 6-day moving average, sell the first position.
If it falls below the 20-day moving average, sell the second 33%.
If price crosses all three moving averages, exit the trade completely.
4. Re-entry Rules
If price bounces and crosses the 6-day or 20-day moving average, re-enter the market using the same allocation strategy.
5. Sell at Summits
Follow the reverse method to sell:
When price starts to fall, sell 33% when it falls below the 6-day moving average.
Hold the remainder unless price falls below the 20-day and 40-day moving averages.
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Discipline is the Key
Although the strategy may seem simple, its success relies on strict discipline. Trading emotionally or neglecting your stop-loss levels can lead to unnecessary losses. Stick to your plan, and over time, you will see consistent results.
This approach has transformed my trading career and my life. While no strategy is foolproof, following these principles will help you navigate the market with confidence and reduce risk.