Brothers who just entered the crypto world, are you often tortured by the vicious cycle of 'chasing when the market rises, getting trapped when you chase; panicking when it falls, and cutting losses when it rises'? As an analyst who has been in this market for 5 years and has seen 3 rounds of bull and bear markets, today I will share with you 8 'iron rules verified by blood and tears' — understanding these will at least help you reduce losses by five figures!
1. Don't be a 'high chasing death squad', the calm period is the golden pit
I have seen too many novices fall into the obsession of 'making quick money': seeing the K-line shoot straight up, their eyes turn red, fearing they might miss the next hundredfold coin, and suddenly they plunge in heavily. What happens next? Most likely they are standing at the mountain top feeling the cold wind. The real opportunity to enter is always hidden during the market's 'calm period' — either it's a long sideways grind that tests everyone's patience, or it's a moment when the price retraces to a key support level. Conversely, when the market chat is bustling, and even the neighbor's aunt comes to ask what to buy, you should be ready to press the take profit button tightly, as the noise often means 'the scythe is already raised'.
2. There are trend codes hidden in bullish candles; don't be dazzled by large bullish candles.
Looking at candlestick charts isn't about "who is the tallest"; it's about "who is steady." Those small bullish candles climbing step by step are like climbing stairs, each step solid, which is a reliable signal of an upward trend. But if a series of large bullish candles suddenly appears, it’s like riding a rocket; it looks exciting, but it’s actually not far from "running out of fuel"—this is often a precursor to a peak, so don’t be fooled into buying in during such "frenzy-like rises."
3. Stay calm during sharp rises and falls; distinguish between "real selling" and "false panic."
Remember an iron rule: after a sharp rise, there must be a correction. Those who dare to heavily invest without undergoing deep adjustments are just gambling on luck. When a major upward wave accelerates, it may look like a strong rise, but it could be the last sprint; declines also come in two types—sharp drops are often driven by short-term emotions, like someone suddenly shouting "run", causing a panic sell-off. However, a sharp drop may also rebound quickly. But if it's a gradual decline, with daily small drops and increasing trading volume, that's when the major players are truly offloading. In this case, you need to decisively exit and not think about "catching the bottom."
4. The key is the cooperation of volume and price; don’t be fooled by "enticing buying".
Newbies often overlook "trading volume", but this is the market's "truth". If the price is rising, but the trading volume is decreasing, it's like "a person lifting a sedan", watching the sedan rise while not many people are helping. It is likely that the major players are enticing you to buy in; conversely, if the price drops to a low level and the trading volume shrinks to the extreme, even hitting a new low with little volume, this often signals a "bottom", and when the volume rebounds, it's not too late to enter, which effectively "solidifies the basis for an upward trend."
5. Determine direction in a large cycle; don't get "lost in small fluctuations."
Many newbies stare at the 15-minute and 1-hour charts every day, selling with a slight rise and panicking with a slight drop. As a result of frequent operations, they lose a lot on fees and miss out on major market movements. When I look at the market, I always check the daily and weekly charts first—trends in large cycles are like the direction of a river, while fluctuations in small cycles are just the foam on the river. Building positions along the major trend is like following the river, saving time and effort; operating against the major trend, even the best sailor can easily capsize.
The essence of trading is actually the "monetization of cognition." These rules are not something I came up with out of thin air; they have been summarized from losing money and stepping into pitfalls in the market. The simplest logic often withstands the test of the market.
Finally, I want to tell my newbie brothers: there is no "get rich overnight" secret in the crypto world, only the patience to "slowly become rich." Write down these insights, practice more in real trading, and summarize them. Next time you encounter market fluctuations, first ask yourself, "Which rule does this conform to?" Gradually, you will transform from a "following the crowd" trader to a "win-win" trader.
The market has tortured me a thousand times, yet I must treat it like "first love"—but this first love must be approached with a clear mind! I will share more practical techniques later, such as how to find key support levels and how to set profit-taking and stop-loss orders. Follow me, and when the next market comes, we can steadily enjoy profits together and not be the "little pitiful ones" who get cut!
