Ten years of trading cryptocurrencies, from losing 7 million to making back 10 million, my seven iron rules!
I have been in the cryptocurrency space for over 10 years, starting with a capital of 5,000, making over 10 million during the bull market, then losing everything in three years and additionally losing 7 million, finally borrowing 200,000 to turn things around, and earning back 10 million. Throughout this journey, I have summarized seven iron rules for trading cryptocurrencies, and today I want to share them with you, hoping to help you avoid detours!
Iron Rule 1: Understand market sentiment, trading volume is key
- Volume without decline: Increased trading volume but price does not drop may be a stop-loss signal.
- Volume without rise: Increased trading volume but price does not rise may indicate a short-term peak.
- Sustained volume during price increase: During the price increase, trading volume needs to steadily increase; if it suddenly decreases or there is an unusually high volume, the upward trend may end.
- Key levels with volume during decline: When the price declines, if key levels are broken with increased volume, the downward trend may continue.
Iron Rule 2: Key levels determine buying and selling*
- Resistance levels, support levels, trend lines: When prices reach these levels, act quickly!
- Fibonacci retracement: I use it to predict resistance and support, and it works very well.
Iron Rule 3: Monitor multiple time windows
- 1-minute chart: Look for entry and exit opportunities.
- 3-minute chart: Monitor the wave conditions after entry.
- 30-minute/1-hour chart: Determine intraday trend changes.
Iron Rule 4: Don't rush to recover after a stop-loss
- Stop-loss = trade completed: Every trade is a new beginning, don’t let previous operations affect your mindset.
Iron Rule 5: Simple and practical position management method
- Three-part position method:
1. Buy the first part when the price breaks above the 5-day moving average;
2. Buy the second part when it breaks above the 15-day moving average;
3. Buy the third part when it breaks above the 30-day moving average.
- Strict stop-loss: Sell the first part if it drops below the 5-day moving average; sell the second part if it drops below the 15-day moving average; sell everything if it drops below the 30-day moving average!
Iron Rule 6: Have a strategy for selling
- High position breaks below the 5-day moving average: Sell one part first and observe the subsequent trend.
- Breaks below the 15 and 30-day moving averages: Sell everything without hesitation!
Iron Rule 7: Increasing positions and stagnation are signals
- Increasing positions with stagnation: If the price does not rise while holdings increase, it may be a short-selling opportunity.
- Increasing positions with decline: If the price does not drop while holdings increase, a rebound may be imminent.
