As an analyst who has been in the crypto space for many years, I firmly believe that surviving in this highly volatile market requires not only a keen sense but also a disciplined trading system that has been tested by the market. Today, I would like to share some thoughts that I personally value highly and have repeatedly validated in practice, hoping to bring you new inspiration.
1. The trend is your friend: Skillfully use moving averages to grasp the big direction.
In the cryptocurrency market, ignoring the big trends is quite dangerous. I tend to view moving averages (MA) as the market's 'trend lifeline', especially the combination of the 50-period and 200-period moving averages, which can help me judge where the market's 'momentum' lies.
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Golden cross and death cross: When the 50-day moving average crosses above the 200-day moving average, forming a 'golden cross', it is usually seen as a signal that a possible medium-term upward trend is beginning. Conversely, when the 50-day moving average crosses below the 200-day moving average, forming a 'death cross', it may indicate that bearish momentum is accumulating.
It’s like the market is reminding us that the balance of power between bulls and bears may be changing.
The key lies in 'resonance': I personally place great importance on the resonance of trends across different time periods. For example, when the monthly level (observing long-term trends) shows a MACD golden cross, indicating a positive long-term outlook, if the daily level (observing medium-term trends) price can also pull back to key support levels like the 60-day moving average and stabilize, then the success rate of entry may significantly increase. This is equivalent to the forces of the long and medium term working in the same direction.
My personal view is: relying solely on golden crosses or death crosses for operation can easily lead to lagging results. It is essential to combine with other signals for comprehensive judgment, such as observing whether there are clear 'rejection' patterns (e.g., long lower wicks) near key moving averages, or whether trading volume increases again after a pullback with reduced volume.
Two, understanding the language of candlesticks: focus on these key patterns.
The candlestick chart is the most direct expression of market sentiment, and those with long wicks, known as 'tailed bars' (which I personally like to call 'testing lines'), often reveal the traces of the tug of war between bulls and bears.
The warning of Pin Bar: The classic Pin Bar (hammer, hanging man, etc.) has a long wick, indicating that the price once fluctuated violently but was ultimately pulled back near the opening price. This usually means that the advance in the current direction has encountered a strong counterattack from the other side.
For example, after a wave of rising, a Pin Bar with a long upper wick appearing at a high position may signal the exhaustion of buying power and the beginning of selling pressure.
'Double Pin Bar' strengthens the signal: Sometimes, the market forms two consecutive Pin Bars near key support or resistance levels. This 'Double Pin Bar' pattern often strengthens the possibility of reversal, indicating that after repeated struggles between bulls and bears in this area, one side may be about to lose.
Judging by position: the location where a pattern appears is far more important than the pattern itself. A bullish Pin Bar appearing near a support level after a continuous decline is much more significant than the same pattern appearing during a sideways consolidation.
My experience is: do not view any single candlestick in isolation. Only when these key patterns appear at important technical levels (such as the previously mentioned moving average support, previous highs and lows) does their signal reliability significantly increase. It's like a signal flare on the battlefield; only by combining it with the terrain (technical levels) can you determine its true intention.
Three, build your trading framework: from thought to execution.
With a way to judge trends and identify signals, a rigorous execution framework is also needed.
Choosing a 'healthy' market environment: I prefer to look for opportunities in markets with clear trends (whether strong unilateral trends or moderate upward channels).
Avoid those chaotic markets where prices fluctuate erratically; it can save a lot of unnecessary trouble.
Waiting for opportunities near the 'value area': For me, the 'value area' is those key support levels, such as the 60-day moving average in an uptrend or important trading zones from the past.
My strategy is to patiently wait for prices to pull back to these areas rather than chasing after prices that have already moved significantly away from support.
Looking for entry signals: After the price enters the 'value area', I will not act immediately. I will wait for a clear price rejection signal, such as a bullish Pin Bar pattern or an Engulfing Pattern, indicating that the bulls may regain control.
Set reasonable stop losses and take profits:
Stop loss: This is the 'fuse' of trading. My principle is that the stop loss must be set below the price level that can prove my judgment is wrong. For example, when going long, if the price effectively breaks below the moving average or pattern low that serves as support, it indicates that my judgment may be wrong, and I must decisively exit.
Take profit: I will refer to previous swing highs or obvious resistance levels to set initial profit targets. Sometimes I also use a 'partial take profit' strategy, such as closing part of my position when the first target is reached to lock in profits, while setting a trailing stop for the other part to try to capture a larger trend.
Four, crucial risk control.
In the cryptocurrency world, survival is always the top priority. No matter how good the strategy, without strict risk management, it could all go to zero.
Single trade risk control: I strongly recommend that the maximum potential loss of any trade should not exceed 1%-2% of your total trading capital. This is a rule that ensures you still have capital to continue playing even during consecutive losses.
Avoid emotional trading: The most common mistakes are 'FOMO' (fear of missing out) and 'revenge trading'. There are always opportunities in the market, and missing one opportunity is much better than making a wrong trade. Stick to trading according to your plan and maintain discipline.
My personal views and reminders.
There is no holy grail: the above shares more of an analytical thought process and framework. There is no 100% win-rate trading system in the world. Markets are constantly changing, and we need to keep learning and adapting.
Practice leads to true knowledge: Before you invest real money, it is strongly recommended to first practice these ideas with a demo account or with very small amounts of capital until you fully understand and can execute your trading plan stably.
Maintain independent thinking: The market has many complex views, and do not blindly trust any 'gods' or news. Cultivate your analytical ability and form your own trading logic, which is the way to long-term success.
The path of trading is a lonely practice; the key is to find a method that suits you and to be extremely ruthless in your discipline requirements. I hope my shares can inspire you.
What do you think of the current market situation? Are there any technical indicators or patterns that you are particularly concerned about? Feel free to exchange ideas. Follow Xiang Ge to learn more first-hand information and knowledge about the cryptocurrency circle, becoming your navigator in the crypto world. Learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
