The cold wind on the balcony woke me up, beneath the fluctuations of the K-line, how much of humanity's revelry and despair is hidden.
Three years ago that early morning, when I posted 'I've been liquidated, 1.9 million is gone' on social media, I threw my phone onto the sofa like a hot potato. The neon lights outside were still flashing, as if mocking me, the self-proclaimed 'six-year veteran analyst' and my failure.
That night, I made a mistake that most traders would make: seeing good news, I recklessly jumped in with all my capital, only to encounter a counterattack of 'good news turning into bad news.' When the margin call alert popped up, I froze—this was not just a loss of money, but a complete denial of my years of analytical experience.
Looking back, although I mastered various technical indicators at that time, I overlooked one crucial factor: market rhythm. Today, I want to share this lesson learned from 1.9 million and how to survive in the crypto market through 'rhythm'.
1 The illusion of technical indicators: Why do knowledgeable people still get liquidated?
Before my liquidation, I confidently believed I had mastered the market rules. Bollinger Bands, MACD, RSI... I was familiar with how to use each technical indicator and could accurately judge golden crosses and death crosses, yet I still faced defeat in real trading.
Technical analysis is not omnipotent in the crypto market. In traditional stock markets, technical indicators may be more effective due to large trading volumes and relatively rational investors. However, the crypto market is different; it is filled with panic and greed, and any sudden news can instantly invalidate seemingly perfect technical setups.
The biggest trap of over-relying on technical indicators is that it creates an illusion of 'controllability'. In fact, when the market experiences extreme conditions, all indicators fail. Just like the LUNA crash in 2022, those who relied on technical analysis to buy the dip were almost completely wiped out.
The biggest difference between the crypto market and traditional financial markets is its 24/7 uninterrupted trading nature. This means no opening and closing hours, no cooling-off periods, and emotions can ferment at any time, with fluctuations possible at any moment. In this environment, purely relying on technical indicators is like walking into a gunfight empty-handed, which is certain death.
2 What is the essence of market rhythm, and how to identify and follow it?
After my liquidation, I spent three full months reviewing my trading records and discovered a surprising pattern: most of my losses originated from counter-trend operations. Either I blindly shorted during an uptrend or kept trying to catch the bottom during a downtrend, resulting in being ruthlessly crushed by the market.
The essence of rhythm is to identify the main trends in the market. In the crypto market, trends can be divided into short-term, medium-term, and long-term. My personal experience is to look long and act short, determining the direction of small trend operations based on the judgment of the larger trend.
How to judge market trends? I have summarized three key signals:
First, pay attention to Bitcoin's trends. Bitcoin is the barometer of the crypto space, and most altcoins struggle to escape its influence. When Bitcoin is strong, altcoins may be weak; when Bitcoin is consolidating, altcoins often have the opportunity to perform. This is the primary indicator for judging market sentiment.
Secondly, grasp the flow of funds. By observing the price fluctuations of USDT, one can infer whether funds are flowing into or out of the crypto market. When USDT prices rise significantly, it often means funds are seeking safety, and Bitcoin may decline.
Third, identify the market sentiment cycle. The market constantly swings between greed and fear, and the most obvious indicator is trading volume. If a cryptocurrency with a certain trading volume declines, there is no need to worry too much; holding patiently usually leads to recovery. Conversely, volume-less increases are often traps.
Truly rhythmic traders understand to be greedy when the market is fearful and to be fearful when the market is greedy. When everyone is discussing a certain project, its value is often already fully reflected in the price, making entry highly risky.
3 'Structural rolling' strategy: How can small funds grow steadily?
After thoroughly understanding market rhythm, I created my own trading strategy: the 'Structural Rolling' strategy. The core of this strategy is not to predict the market but to follow it, striking at key points.
Specifically, I divide my funds into three parts: one part for day trading, focusing only on Bitcoin and Ethereum, taking profits when fluctuations reach 2%-4%; one part for swing trading, waiting for clear opportunities to act, holding positions for 2-4 days for stability; and another part as a trump card, remaining untouched in extreme market conditions, providing the confidence to turn things around.
The timing of entry determines half of the success or failure. I never blindly open a position; instead, I wait for two key signals: one is when the market shows a stable structure, such as forming clear support and resistance levels; the other is volume correlation; do not participate in volume-less increases and be cautious of volume decreases.
Take the 5-day moving average as an example; this is my most commonly used short-term indicator. In a bull market, a price pullback to the 5-day line is a buying opportunity; in a bear market, a price drop below the 5-day line is a selling signal. Simple yet effective, it surpasses various complex indicators.
Stop-loss is an important component of rhythm. In my strategy, a single stop-loss never exceeds 2% of total funds; once the stop-loss point is reached, exit immediately without letting a single loss affect the overall rhythm. Similarly, when profits reach expectations, I will first withdraw the principal and let the profits continue to run.
Many beginners' biggest problem is that they focus too much on the win-loss of each trade while neglecting the overall rhythm. In fact, even top traders cannot be right every time. The key is to strike boldly at the right time and cut losses in a timely manner when wrong.
4 The rhythm of trading psychology: How to avoid emotional decisions?
After a liquidation of 1.9 million, I fell into a vicious cycle of 'revenge trading': the more I lost, the more anxious I became, and the more anxious I became, the more I lost, resulting in me losing the borrowed money for margin in just three weeks. This is not a technical issue, but a typical psychological imbalance.
Emotional management is the soul of rhythm. In the 24-hour uninterrupted trading crypto market, an imbalanced mindset is one of the main reasons for losses. Once I realized this, I set a strict rule for myself: no more than 3 trades per day, regardless of profit or loss, and close the market at the set time.
Avoiding frequent trading is key. For the same cryptocurrency, holding long-term often yields greater returns than frequent trading. Frequent trading not only increases transaction costs but also makes it easy to make erroneous decisions due to emotional fluctuations.
Overcome the human weakness of 'chasing highs and cutting losses'. Chasing highs and cutting losses is a common issue among investors; they buy in when prices rise and panic sell when prices drop, resulting in being stuck at high prices and cutting losses at low prices.
To avoid this situation, one must cultivate the ability to think independently and not blindly follow the 'influencers' on social media. Everyone's capital, risk tolerance, and trading goals are different; strategies that work for others may not work for you.
Maintain a balance between life and trading. The crypto market always has opportunities, but health and life only happen once. When I made trading my everything, I found myself unable to make rational judgments due to excessive anxiety. Regular breaks and maintaining a stable mindset are far more important than a single profit.
5 A guide for beginners to cultivate a sense of rhythm
For beginners who have just entered the crypto world, I would like to offer a few specific suggestions to help you avoid detours:
First, start with a demo account and test the waters with small funds. The crypto market is full of opportunities, but what’s lacking is the ability to survive. It is recommended that initial capital does not exceed 2% of total assets, so that even if you lose it all, it won't affect your normal life.
Second, choose mainstream coins and avoid altcoin traps. Bitcoin and Ethereum are relatively stable, while altcoins are highly volatile, potentially losing 90% in a second. A common mistake beginners make is thinking mainstream coins are expensive and turning to low-priced altcoins, resulting in 'entering the market today and exiting tomorrow.'
Third, avoid contract leverage. For beginners, contract trading is like a meat bun hitting a dog, with no return. No matter how much you earn before, as long as you lose once, you could return to square one overnight.
Fourth, seize the golden trading hours. From 24:00 to 1:00 the next day is the period of low trading volume globally, making it easy to see 'unexpected market conditions'. You can set ultra-low buy orders or ideal sell orders before sleep, which could lead to unexpected gains.
Fifth, pay attention to the macroeconomic environment. The attitudes of governments towards Bitcoin and U.S. financial policies will have a significant impact on the crypto space. Spending a few minutes each day to follow relevant news is more valuable than staring at candlestick charts.
Lastly, and most importantly: record every trade. Human memory is limited, and by recording trading details, we can gain a clearer understanding of our trading behavior, identify problems, and summarize experiences.
Three years after my liquidation, I am still trading in the crypto market, but my mindset and approach are completely different. I no longer pursue overnight wealth but focus on hitting the market rhythm and steadily accumulating profits.
The crypto space is not short of opportunities; what’s lacking is the execution ability to keep up and the ability to survive.
Once I deeply understood this, trading became easy and orderly. I no longer stayed up late monitoring the market, no longer felt anxious, because I knew that as long as I hit the right rhythm, the market would always present opportunities.
I still remember that night when I sat on the balcony feeling the cold wind, thinking that was the end. Looking back now, that was merely a new starting point — it made me realize that 'hitting the right rhythm' is more important than technology.
I hope my experience helps you avoid detours and find your rhythm in this market full of opportunities and risks. Follow Xiang Ge to learn more firsthand information and crypto knowledge, accurate points, becoming your navigation in the crypto space; learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
