When I first entered the circle, I was like a naive rookie chasing highs and cutting losses, until I turned three months' salary into 'fuel' for the exchange. After much pain, I realized that in this zero-sum game, emotions are the greatest enemy, and discipline is the only moat. The eight insights I share today are not quick-fix secrets, but a set of systematic survival rules I summarized after trial and error with real money. They helped me transition from a programmer's mindset to a trader's mindset.
1. A sharp drop in the early session can be a buying opportunity, while a sharp rise should be taken as a chance to take profits.
The first two hours of the early session serve as a 'magnifying glass' for the day's emotions. Overnight positions and news will erupt intensely. My habit is to enter lightly when there is a sharp drop of more than 3% within the first hour of the market opening, and the trading volume significantly increases, waiting for the second 15-minute K-line to stabilize. This is because the low points created by panic selling often attract short-term funds. Conversely, if there is a rapid rise in the early session, especially without volume, I usually take profits in batches. This is often the main force 'fishing', luring in high-chasing buyers.
Key point: Actions in the early market must be quick, and your mindset must be stable. Don't be greedy expecting to capture the entire wave; it's enough to catch the meat in the fish's belly.
2. Don’t chase highs during surges; absorb deeply during afternoon drops the next day.
Have you ever had this experience? Seeing a certain coin surge by dozens of points, unable to resist FOMO and jumping in, only to buy at the peak and start diving the next second. This is the most typical retail trap. A truly strong coin will not give you an easy opportunity to get in; any surge that allows you to easily chase in is likely a trap.
For deep drops occurring in the afternoon (especially after the European market opens), I usually won't act immediately. I will wait until half an hour before the closing time. If the price no longer sets new lows and can stabilize above key support levels in the next morning's early market, I will consider cautiously testing the waters. This is called 'right-side confirmation.' Although it may cost some bottom profits, it can avoid the falling knife of a continuing decline.
3. Don't panic when the morning drops; be cautious with your cuts. It's best to wait quietly during a sideways market.
In the morning, when you see your holdings drop, many people will instinctively cut their losses. But think about it: if it's the main players washing out, what they love most is to create panic in the relatively illiquid early market and take away your bleeding chips. My experience is that a morning drop, unless accompanied by major bad news or breaking key stop-loss levels, is mostly a 'false move.'
What tests patience more is the sideways market. Cryptocurrency prices can be like a dead fish, completely still, making it easy to get itchy hands. My trading system has an iron rule: no new positions during sideways trading. Sideways is a temporary ceasefire between bulls and bears, and the next big trend requires a volume breakout to confirm direction. Until the direction is clear, staying still is the best operation.
4. Don’t sell until the target price is reached, don’t buy before reaching psychological levels, and don’t trade during sideways chaos.
This is the ultimate test of discipline. Before placing each trade, I stick notes with the buying price, target profit price, and stop-loss price on the side of my screen. This effectively prevents temporary decisions caused by emotional fluctuations during the trading day.
‘Don’t buy before reaching psychological levels’ means refusing to compromise. Don’t raise your buying price just because you’re afraid of missing out; the market is never short of opportunities. And ‘no trading during sideways chaos’ is an extension of the previous point, emphasized again because too many people stumble at this step. Taming the inner demons with rules is the first step to stable profits.
5. A bearish candle pullback is a buying point, while a bullish candle surge is a selling point.
This is contrary to popular intuition and requires a bit of contrarian thinking. When a bearish candle falls and retail investors are panicking and selling, you should think: Who is buying? It’s very likely that astute large funds are quietly accumulating. Conversely, when a big bullish candle rises, and the market is in a frenzy, you need to be alert: Who is distributing?
I particularly like to buy in batches at the end of a bearish candle during a volume contraction, especially for quality coins whose fundamentals remain unchanged and are just dragged down by the market. The timing for selling, then, is to take profits in batches during a big bullish candle with increased volume. Remember, the main players will never be kind enough to let all retail traders exit easily at the top.
6. When the crowd is excited, I remain calm; when the market is in panic, I am greedy.
This requires cultivation. When everyone in your community is showing profit screenshots and various 'teachers' are calling for you to add positions, it's an extremely dangerous signal. I have a simple indicator: when the previously quiet WeChat group messages start to explode in growth, it’s time to consider gradually exiting.
On the contrary, when the market crashes, and the group feels lifeless, even when someone starts cursing and leaving the group, I open my core cryptocurrency observation list and start carefully selecting those that have been 'wrongly killed.' Excess returns often come from maintaining rational thinking when others are fearful.
7. High and low consolidations require patience; act only when the direction is clear.
Consolidation markets are the most grueling, but they are also the breeding ground for trends. My experience is that the longer the consolidation lasts, the greater the subsequent breakout force tends to be. In the face of consolidation, I will only do two things: first, review past consolidation patterns before breakthroughs; second, rest and conserve energy.
The authenticity of a breakout needs to be identified. I require that a breakout meets two conditions: first, the closing price must hold above key resistance or support levels for more than three days; second, trading volume must continue to expand. A false breakout often quickly falls back into the consolidation range.
8. Prolonged sideways movements reaching highs are the final act; timely profit-taking locks in profits.
This is a rule to protect profits. When a coin has been consolidating at a relatively low level for a long time and suddenly surges quickly, this first wave is often a trial or starting wave. However, if it is a long-term consolidation at a high level after a significant increase, and suddenly surges with increased volume again, it is very likely to be the final sprint, known as the 'doomsday wheel.'
How to distinguish? The key lies in observing the persistence of the surge and the relationship between volume and price. If it’s a healthy start, after the surge, it will enter a new platform for consolidation with ample turnover. If it’s a baiting situation, there is often a quick surge followed by a more significant drop. During a prolonged sideways movement, taking profits in batches is always a prudent choice.
Summary: These eight insights are essentially a set of algorithmic responses to market emotions. Its core is not prediction, but reaction—providing corresponding disciplined actions based on different market states. The cryptocurrency circle is never short of opportunities; what’s lacking is a calm mind that can execute an effective strategy to the end.
Which rule resonates with you the most? Or what confusions have you encountered in actual operations? Feel free to share your thoughts in the comments section, and let’s dissect this thrilling speculative game together. Follow Xiang Ge to learn more firsthand information and accurate points about the cryptocurrency circle; learning is your greatest wealth!
