Recently, the cryptocurrency market has indeed been tough to navigate. I believe many friends have encountered losses during their trading journey and are feeling down. Today, I will borrow some motivational quotes from Bit Lang to encourage everyone and discuss what to do next.
1. Correctly view trading success and failure
If you have been liquidated or didn't execute a trade well, how can you recover your losses? In fact, in the long journey of trading cryptocurrencies, whether it's a market trend or a single trade, whether it ultimately succeeds or fails, in the context of potentially hundreds of thousands of trades you might experience, it's just a drop in the ocean. Therefore, never become overly complacent after a single success, feeling invincible; nor should you be overly distressed after a failure, getting trapped in negative emotions. Remember, a calm and peaceful heart is always the most powerful weapon of a professional trader. When you become impatient, blind, fearful, or anxious due to market fluctuations and changes in assets, regardless of whether you are currently making a profit or a loss, you have already lost psychologically.
2. Cryptocurrency funds and lending risks
In our trading speculation, while the returns can indeed be considerable once successful, to be honest, the success rate is at most around 1%, with 99% of cases likely leading to failure. Therefore, when you first invest, use a small amount of money, such as 1,000 or 2,000. If you have extra funds, consider buying some spot during significant price drops. If unfortunately, you fail and lose everything, don't be disheartened; calm down and work diligently to earn money while learning more about cryptocurrency trading. Once you have accumulated enough knowledge, you can continue. But one thing to remember: never borrow money to trade cryptocurrencies! Once you borrow, your life can easily fall into an irretrievable situation, affecting not only you but also your family. Don't obsess over those stories of people who changed their fate through borrowing; the chances of such things happening to you are exceedingly low. After all, in trading speculation, mindset is crucial; technical skills are only one aspect, while mindset accounts for at least 80%. If you are still in debt, how can your mindset improve? A good result is simply impossible.
3. Methods to judge cryptocurrency breakthroughs
I have been trading cryptocurrencies for ten years, starting with an investment of 50,000. Now, I support my family through trading and have accumulated quite a bit of experience. It can be said that I have tried 80% of the methods and techniques available in the market. If you want to treat trading as a second career to support your family, sometimes listening to and observing others' experiences can reveal insights beyond your understanding, which could save you five years of detours. Take the example of how to judge whether a cryptocurrency has broken out; we can analyze it from four aspects: volume, price, time, and space.
(1) Volume
As the saying goes, 'Before the troops move, the supplies must arrive first.' In the early stages of a trend formation, increased volume is an essential element, especially the first increase in volume after a long period of consolidation, which deserves our keen attention. However, be cautious; this is not the best entry point. Generally, one should wait for a pullback after the initial test, and after the main force has finished washing out, when a second increase in volume occurs, that is when we have a real opportunity to enter the market.
(2) Price
When judging, usually looking at the closing price is sufficient. Regardless of how the cryptocurrency's price fluctuates during the process, as long as it stabilizes at closing, it indicates that the main force is serious. This is the key to distinguishing between false and genuine breakouts. To summarize, if the closing price can settle above the resistance level, the probability of a genuine breakout significantly increases.
(3) Time
Before a breakout occurs, the cryptocurrency price should ideally have experienced a relatively long period of decreasing volume consolidation, lasting over three months, and the concentration of chips should be less than 10%. Only in such cases can the main force accumulate sufficiently, making the subsequent rally more explosive.
(4) Space
We need to identify the key resistance levels. The resistance levels mentioned here could be the price drop points following a previous increase in volume, or they could be the necklines of formations like W bottoms or head-and-shoulders bottoms, or even the integer price levels of the cryptocurrencies. Once we clarify these resistance levels, if the cryptocurrency price breaks through them, we can measure the potential price increase more easily.
These four dimensions are the foundation for judging horizontal breakthroughs. To help everyone better understand, I, Old Liu, have decided to share some of my personal trading notes that I have treasured for many years. Each summary in these notes is the essence I have formed after countless nights of reviewing.
4. Techniques for trading using support and resistance levels
Today, Old Liu will teach everyone a simple and practical cryptocurrency trading tip, which is how to use support and resistance levels to make trades. You should know that in trading, support and resistance levels are crucial for determining entry and exit points. If used well, they can minimize risks and yield considerable returns.
(1) How to correctly draw support and resistance
Step 1: Zoom in on the chart, find the long-term cycles.
Teo believes that if we look at the long-term charts, we can more easily notice those very obvious key price levels. Generally, we start from the weekly chart, and then progressively analyze the daily chart, 4-hour chart, and so on. The second step is to identify the most obvious price levels.
The obvious price levels mentioned here are often some clear highs and lows, or the starting points of a rising or falling trend. We start drawing on the weekly chart and then further into the daily chart.
This third step involves adjusting the previously drawn lines to ensure that these support and resistance lines touch as many key price levels as possible, making the drawn support and resistance levels more accurate and more valuable for reference.
In summary, whether you are a novice or an experienced trader in the cryptocurrency market, the gains here are not just financial but also involve growth in investment knowledge and experience. In this process, we can not only gain insights into market analysis, the foundational knowledge of trading, and the methods of using various investment tools, but we can also witness exciting fundamental analyses, an understanding of the chaotic international situation, and the identification of various investment forces. I hope everyone can become both a winner and an expert in their investments!
If you are still getting stuck or losing money in this market, don't hesitate, just type 333 in the comments, and let's exchange ideas together.