I have been in this industry for eight years and have seen too many people rise and fall. In the early days, I was obsessed with researching various technical indicators, wanting to catch every fluctuation, only to be repeatedly slapped by the market. It was only later I understood that what truly allowed me to achieve stable profits was not 'how much I can do,' but 'what I dare not to do.' Today, I share my core principle: only trade in three types of markets, and stay on the sidelines in all others. This is not conservatism, but rather leaving bullets for the highest probability opportunities.
First type: Verification of the pullback after a breakout — It's better to wait for a retracement than to chase the high.
After the market breaks through a key position, most people rush to chase the high, but I prefer to wait for it to 'look back.' For example, after a price surge, if it retraces to the trend line or the previous high and shows stabilization with reduced volume and no breakdown of support, that is my entry point. This combination of 'following the trend + confirmation' has a much higher win rate than blindly chasing the highs.
Why can you make money?
Once market sentiment kicks in, it won't end directly, but the main force often deliberately washes out to scare off retail investors. As long as the structure is not broken during a pullback (for example, EMA20 holds, MACD stays above zero), it is a golden opportunity.
My habit:
Do not chase on the breakout day; wait for 1-3 K-lines to pull back for confirmation;
Set stop-loss below the pullback low by 2%-3% to prevent false breakouts.
The second type: the 'false drop trap' at the lower end of the consolidation—when the main force sets a trap, I come to pick up the leaks.
In sideways consolidation, a sudden bearish candle breaks the support level, and retail investors easily panic and cut losses. But if the price quickly pulls back into the consolidation range, it indicates a trap set by the main force. I will follow in when the price returns to the range, specializing in the 'repair market after a fake breakout.'
Key signals:
When breaking, trading volume increases but lasts a short time, quickly shrinking and rebounding;
RSI shows a bottom divergence (price makes a new low, but the indicator does not).
Risk control:
If the price breaks the level again after pulling back, stop loss immediately, indicating a real breakdown;
In this market condition, positions should be light, as it's easy for the trend to change at the end of a consolidation.
The third type: a second surge after a trend's pullback—an entry point to let profits run.
After a trend runs for a while, it often suddenly pulls back or consolidates, and many people get thrown off the bus here. I will observe whether the key support level holds (such as EMA50 or the middle band of the Bollinger Bands), and at the same time, if a breakout signal appears in the short term (like the 1-hour chart), that is the time to add positions.
The logic is very simple:
The real trend will not end easily; consolidation is to clear out the unsure holders. As long as the overall trend remains (for example, if the weekly chart is still bullish), a pullback is actually an opportunity.
My operations:
After adding positions, move the stop-loss to the cost price to ensure no loss of principal;
When profits reach twice the stop-loss amount, take partial profits and keep the remaining position for greater space.
Why does 'doing less' lead to winning?
Avoid emotional trading:
Most losses come from 'itchy hands'—participating in markets you don’t understand, resulting in being trapped or cutting losses. I’ve seen many people frequently trading in a bull market, which yields lower returns than dollar-cost averaging in spot trading.
Focus on high win-rate opportunities:
90% of the time, the market is filled with trash fluctuations; the really worthwhile opportunities are less than 10%. As Peter Brandt said: 'I only look for opportunities to turn $1 into $4, even if the success rate is only 50%.'
Protecting the principal is the hard truth:
In the cryptocurrency world, those who survive longer are not necessarily the ones who earn the most, but those who lose the least. Keep single losses within 2% of total capital, so you have chips to wait for big opportunities.
One last heartfelt truth
Many people worry about missing out on market opportunities, but what is most abundant in the cryptocurrency world is opportunity. The real risk is not that you earn less, but that you lose quickly. After eight years, my greatest gain is not the numbers in my account, but learning the 'courage to stay out of the market.' If you can’t even resist observing, then no strategy can save you.
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