My Cryptocurrency Trading Experience: Turning 50,000 Yuan Into 20 Million in Two Years
After experiencing numerous ups and downs in the market, here are some key lessons and strategies I’ve learned:
1. Divide Funds and Manage Risks
Split your funds into five equal parts, and only invest one-fifth at a time.
Set a stop-loss limit of 10%. If a trade goes wrong, you’ll only lose 2% of your total capital. Even with five consecutive losses, your overall loss will be capped at 10%.
For winning trades, set a stop-profit target above 10%. With this approach, do you think you’ll get stuck?
2. Follow the Trend
Improve your win rate by going with the trend.
In a downtrend, resist the temptation to buy during rebounds. In an uptrend, view every decline as an opportunity to buy at a discount.
Is it easier to profit by catching falling knives or buying during pullbacks?
3. Avoid Short-Term High Flyers
Stay away from coins that have experienced rapid short-term surges, whether mainstream or lesser-known.
Few coins sustain multiple strong rallies. After a sharp rise, stagnation at high levels often leads to a natural decline if further momentum doesn’t materialize.
This seems simple, yet many still gamble on these coins.
4. Use MACD for Timing Entries and Exits
When the DIF and DEA lines form a golden cross below the zero line, breaking above the zero line signals a solid buy entry.
A dead cross above the zero line, followed by a downward move, is a cue to reduce your positions.
5. Avoid “Covering Positions” at a Loss
Adding to losing positions is a major pitfall for retail investors, often leading to heavy losses.
Instead, increase your position size when you’re in profit. Never chase losses by doubling down on a bad trade.
6. Volume and Price Are Key Indicators
Volume drives the market. Watch for significant volume breakouts during price consolidations at low levels—these often signal strong buying opportunities.
7. Trade Only in Upward Trends
Focus on coins with upward momentum for the highest probability of success and to avoid wasting time.
Key moving average signals:
3-day upward trend: Short-term rise.
30-day upward trend: Medium-term rise.
84-day upward trend: Main rally phase.
120-day upward trend: Long-term rise.
8. Regularly Review and Adjust
After every trade, evaluate your performance.
Check if the fundamentals or technical trends of the coin have changed.
Review the weekly chart to ensure it aligns with your initial analysis, and update your strategy as needed.
By sticking to these principles, you can improve your trading outcomes while minimizing unnecessary risks.