Having been in the crypto world for a long time, everyone understands that kind of anxious feeling of wanting to act but being afraid of getting trapped.
I still remember that summer in 2019 when I watched BTC strongly break through its previous high, and only one voice was in my head: 'Go! If I don't get in now, it will be too late!' However, as soon as I fully invested, the price unexpectedly plummeted, and I was trapped for half a month. That feeling was like ordering a takeout that looked delicious, only to find out it was leftover food.
What hurt more was that when a real opportunity for ETH arose later, I hesitated because of the shadow of the last time and watched it leave in the dust. After hitting my thigh, I realized: the crypto world doesn't lack opportunities, it lacks capital that isn't trapped.
Over the years, I've slowly figured out three 'foolproof methods' that have helped me avoid many pitfalls.
Trading volume doesn't lie; real money is the hard truth.
Have you noticed that false breakouts are often 'loud thunder, little rain'? The price jumps around happily, but if you look closely at the trading volume, there's hardly any change. It's like someone banging drums saying they want to parade, but only three to five people show up, clearly lacking confidence.
A true trend's initiation must have a significant increase in trading volume, ideally over 50% higher than the average level of the previous few days. Why do I place such importance on this number? Because market makers can manipulate charts, but it's hard to fake trading volume for a long time. Real money entering the market cannot be hidden.
I have a painful lesson: last year, a certain altcoin suddenly surged from $5 to $5.2, breaking through the previous high. At that time, several groups were shouting 'it's taking off,' but when I looked at the trading volume, it was almost the same as the previous few days. I held back from chasing, and the next day it fell back to $4.8. Later, I realized that was just the market maker testing the market's response.
Be patient and wait for the pullback; true trends do not fear validation.
Many people rush in as soon as they see a breakout, fearing they will miss out on a fortune. But in my experience, a true trend never fears you getting on board; it will give you a second or even third chance.
My strategy is: after a breakout, do not rush to chase higher prices, but patiently wait for a pullback confirmation. For example, after the price breaks through a key resistance level, there is usually a retracement testing process. If this previous resistance level now turns into a support level and holds during the pullback, it is a relatively good entry point.
It's like confirming whether a person is reliable; don't look at their performance when everything is going smoothly, but observe their reactions under pressure. The market is the same; the pullback after a breakout is its 'stress test.'
Key support levels are the lifeline of the trend.
Whether it's a true trend or a false breakout, the key is to see if it can hold the core support level. I usually focus on the 5-day and 20-day moving averages, especially whether the price can stay above the 5-day line for three consecutive days.
My trading system has a strict rule: after buying, if the price breaks below the 5-day line and cannot recover that day, I will decisively reduce my position; if it breaks below the 20-day line, I will liquidate and observe. This sounds simple, but sticking to it is not easy—people always have a sense of luck, always thinking 'what if it rebounds?'
Do you remember last year's false breakout with ETH? After the price broke through 12,000, it fell below the 5-day moving average on the third day. I sold according to my strategy; although I made a little less profit, when I later saw it drop to 10,000, I was glad I got out in time.
Mindset is the ultimate technique.
After all, these technical methods are all about solving one problem: how to control that heart that is afraid of missing out.
I've come to realize that the market always has opportunities; there's no need to try to seize every single one. It's like surfing; missing one wave isn't a big deal, but getting knocked out by a big wave is terrifying. Those who trade frequently every day, chasing every hotspot, often find that high transaction costs and poor timing choices significantly reduce their profits.
Researchers have traced back to find that those once-popular stocks saw their activity index drop from 1000 points to 10 points, a decline of over 99%. This example, although from the traditional stock market, applies equally to the crypto market: blindly chasing hot trends often leads to unsatisfactory results.
To summarize
In these years of trading cryptocurrencies, my biggest realization is: slow is fast, and less is more. Using these three 'foolproof methods,' I might miss some 'head fish' opportunities, but I can avoid most deep pits. In the long run, stable returns are more substantial than rollercoaster-like excitement.
Do you have any secret tips for identifying false breakouts? Feel free to share and discuss in the comments~ Follow A Ke for more first-hand news and crypto knowledge, accurate points, and become your guide in the crypto world; learning is your greatest wealth!#美联储降息 #巨鲸动向 $ETH
