I have been trading cryptocurrencies for 10 years, and it was only six years ago that I explored a trading system suitable for myself, and it was only under the guidance of experts that I awakened! Currently, I can't say I’m extremely wealthy, but I have achieved stable profits, at least I can steadily outperform 80% of people.
Long ago, I understood that an excellent trading system can effectively assist investors in their investments. I also realized that without a trading system, investing aimlessly is destined to lose more than win. However, summarizing a trading system is really quite difficult.
An excellent trading system is also counterintuitive; it requires you to overcome greed and fear, to act decisively, not to make subjective assumptions, and to strictly execute.
In the turbulent seas of the crypto world, true experts do not rely solely on technology, but rather on a profound understanding of market rules and strict adherence to them.
These six iron rules will help you navigate the cryptocurrency trading world smoothly and manage risks easily!
Price movements are unpredictable, mindset is king: Don't easily declare a peak during an uptrend, and don't assert a bottom during a downtrend. Just like whether Bitcoin can stand at $150,000, only when the market goes wild can the answer be revealed. What you think is a bottom may just be a short pause; the true bottom is always unfathomable.
Build positions in batches, stability is king: Experts never rush to achieve their positions, controlling each trade within one percent. Such a strategy allows them more trial-and-error opportunities, lower costs, and reduced risks.
Dare to chase highs, achieve greatness: In the crypto world, fearing heights makes one unfortunate. You should know that the main players’ costs in a cryptocurrency are far more complex than you imagine, including marketing costs, chip costs, development costs, etc., which can be several times or even dozens of times the input. Therefore, daring to chase highs can seize true opportunities.
In a bull market, you must seize the opportunity: A bull market is the only chance for a turnaround. Just like Buffett, even if he is smart, if he misses the bull market, he can only wait silently in the bear market. Therefore, in the crypto world, seizing the bull market means seizing the key to wealth.
Technical indicators are for reference only: Technical indicators often have lagging characteristics; they can only serve as references rather than the main basis for buying and selling. During strong upward trends, although technical indicators perform well, prices are already high, so chasing up requires caution.
Confident and fearless in the market: True cryptocurrency experts are full of confidence. They have experienced losses but have never been defeated. Because they firmly believe that they will ultimately conquer the market, this belief is the key to their success.
Trading cryptocurrencies is not only a battle of skills and luck but also a test of mindset and wisdom. Only those who master these iron rules and strictly adhere to them can remain undefeated in the crypto world!
Having learned my simplest cryptocurrency trading method, it's like having a hack in the crypto world, with green lights all the way, simply because I firmly grasp the following 10 rules.
1. Strong coins that fall for nine consecutive days at high levels must be followed up promptly.
2. Any cryptocurrency that rises for two consecutive days must be promptly reduced in position.
3. As long as any cryptocurrency rises more than 7%, there is still a chance for a surge the next day, so you can continue to observe.
For strong bullish coins, wait until the pullback ends before entering. 4.
5. If any cryptocurrency has three consecutive days of dull fluctuations, observe for another three days, and if there is no change, consider switching out.
6. Any cryptocurrency that fails to recover the previous day's cost price the next day should exit promptly.
7. On the rise list, wherever there are three, there must be five, and wherever there are five, there must be seven. Cryptocurrencies that rise for two consecutive days should be entered at a low; the fifth day is usually a good selling point.
8. Volume and price indicators are crucial; trading volume is the soul of the market. When price consolidates at a low level and breaks out with increased volume, it should be noted; when there is increased volume at a high level but price stagnates, you should decisively exit.
9. Only choose to operate on cryptocurrencies that are in an upward trend, as this maximizes the chances of success and avoids wasting time. A 3-day moving average turning up indicates short-term rises; a 30-day moving average turning up means a medium-term rise; an 80-day moving average turning up indicates a major upward trend; a 120-day moving average turning up indicates...
If the head is up, it indicates a long-term rise.
10. In the crypto world, small funds do not mean no opportunities. As long as you master the correct methods, maintain a rational mindset, strictly execute strategies, and patiently wait for opportunities to arise.
Understand indicator divergence in 2 minutes! Core! (Essential)
Is there a low-risk trading method that allows us to sell when prices are near the trend top and buy when close to the trend bottom? The answer is yes, such a method exists, and that is divergence trading.
I believe experienced traders are not unfamiliar with the concept of divergence; however, I want to discuss two types of divergence: one is the divergence between fundamentals and technicals, and the other is the divergence between price and indicators.
The so-called divergence between fundamentals and technicals means that the fundamentals are bearish while technically the price is rising, and in such cases, I do not participate. If you think back to the trading method I introduced, 'inventory + basis + technical signals', you will find that when the market is rising, we choose to go long on low inventory and deeply discounted futures, rather than on high inventory and significantly overpriced futures, because the former represents a resonance between fundamentals and technicals, while the latter represents a divergence. The potential philosophy behind this trading method includes a margin of safety thinking. Of course, most technical analysts do not pay attention to fundamentals, nor do they focus on the divergence between fundamentals and technicals; I am more cautious and do not participate in price rises that diverge from the fundamentals and are technically incomprehensible.
The so-called divergence between price and indicators means that K-line price patterns create new highs or lows, while the corresponding technical indicators do not create new highs or lows.
This is a trading method that most technical traders often use in practice. K-line patterns reflect price trends, while technical indicators reflect momentum trends. When prices reach new highs or lows, it reflects a change in price trends, while technical indicators do not reach new highs or lows, reflecting a depletion of upward or downward momentum. Since prices continue along the original trend with momentum depletion, it indicates a higher probability of a market reversal.
So what kind of technical indicators should we choose? Actually, it doesn't matter what indicators you use; you can use RSI, MACD, stochastic indicators, CCI indicators, etc. If price peaks keep rising, the oscillation indicators should also continue to rise; conversely, if price lows keep falling, the oscillation indicators should continue to decline. If there is inconsistency between price and oscillation indicators, and price and indicator trends diverge, then divergence occurs. This divergence is a conventional divergence.
Giving someone a rose, the fragrance remains on your hand. Thank you for your likes, follows, and shares! Wishing everyone wealth freedom by 2025!
The above are the summaries of my more than 10 years of practical experience and techniques in cryptocurrency trading. They may not be suitable for everyone and need to be combined with individual practices. As a trader, the most terrifying thing is not having technical issues but lacking proper understanding, falling into these trading traps without realizing it! There is no invincible trading system, only those who use trading systems invincibly! This is the truth; ultimately, trading systems must return to the person!
The cryptocurrency journey is long and slow; if you are also a fellow traveler, please follow, like, and comment 168.
