In the crypto world, countless investors fall into the "Chasing Gains, Panic Selling → Emotional Collapse → Blind Trading → Shrinking Capital" vicious cycle. As a crypto analyst who has experienced three rounds of bull and bear transitions, I deeply understand that the key to breaking free from emotional trading is not predicting the market, but establishing a scientific decision-making framework. Today, I will share a combination strategy of two core indicators to help you build a robust trading system.
🔍 1. 200-Day Moving Average: Identifying the "Compass" for Bull and Bear Transitions
Core Logic: The 200-Day Moving Average is the "Dividing Line" for Bull and Bear Markets in the crypto space; it can filter out short-term noise and reveal the direction of long-term trends.
Practical Application Method:
Trend Judgment:
Bull Market Signal: When the coin price stabilizes above the 200-day moving average and the slope of the moving average is upward, it is considered that a long-term upward trend is established.
Bear Market Signal: When the coin price continuously operates below the 200-day moving average and the slope of the moving average is downward, it is advisable to reduce positions to avoid risks.
Key Operation Points:
Breakthrough Confirmation: The coin price must break above the 200-day moving average from below with increased trading volume, and must stabilize above the closing price for 3 consecutive days to confirm a valid breakthrough.
Pullback Opportunity: In an upward trend, when the coin price pulls back and stabilizes near the 200-day moving average (e.g., with a long lower shadow), it is a low-risk accumulation point.
Case Verification:
In January 2024, Bitcoin broke above the 200-day moving average, achieving a 70% increase within 3 months.
During the bear market in 2022, every rebound near the 200-day moving average was an opportunity to reduce positions, avoiding deep losses.
My exclusive parameter optimization:
Mainstream coins (BTC/ETH) directly use the 200-day parameters.
Altcoins have higher volatility, which can be adjusted to a 150-day moving average to improve sensitivity.
Combine EMA (Exponential Moving Average) to give recent prices higher weight and reduce lag.
📊 2. RSI Indicator: A 'thermometer' for capturing market sentiment.
Core Logic: RSI measures the speed of price changes to identify overbought and oversold market conditions, providing early warnings of reversal points.
Advanced Usage (Exceeding the conventional 70/30 rule):
Dynamic Threshold Adjustment:
Strong Bull Market: Adjust the overbought line to 80 and the oversold line to 40 to avoid selling too early.
Extreme Market Conditions: RSI breaking above 90 followed by divergence (price making new highs while RSI does not) is a strong sell signal.
Divergence Identification Techniques:
Top Divergence: Continuous price highs with gradually lowering RSI peaks, indicating a depletion of upward momentum.
Bottom Divergence: Price makes new lows while RSI lows rise, suggesting a weakening of downward momentum.
Confirmation Conditions: Wait for the price to break through the short-term trend line or moving average before acting, to avoid false signals.
Multi-Period Resonance Strategy:
When daily RSI > 70, check if the 4-hour RSI shows divergence.
Weekly RSI < 30 and daily RSI shows bottom divergence, forming a high win-rate buying combination.
⚖️ 3. Indicator Combination: Build a bi-directional verification system.
Golden cross + RSI bottom divergence:
When the 50-day moving average crosses above the 200-day moving average (Golden Cross), with RSI < 30 and forming bottom divergence.
Case: In October 2023, ETH showed this combination, with a subsequent increase of 120% over 2 months.
Death Cross + RSI Divergence:
The 50-day moving average crosses below the 200-day moving average (Death Cross), and RSI > 70 shows divergence.
Case: In April 2022, BTC showed this signal, followed by a 50% drop.
Position Management Supporting Plan:
Strong Signals (Double Indicator Resonance): Can allocate 20% of position.
Neutral Signals (Single Indicator Trigger): Allocate 5-10% of position for trial and error.
Always set stop-loss levels: 8-10% below the buying price or 3% below key support levels.
🛡️ 4. Avoid Common Traps: My practical insights.
Market Fluctuation Filtering:
When the 200-day moving average is flat, the market is in a consolidation phase, reducing the weight of RSI signals.
Using Bollinger Bands (BOLL) to assist in judgment: Price touches the upper band + RSI > 70 strengthens the sell signal.
Response to Extreme Market Conditions:
Indicators may fail during black swan events (e.g., RSI fell below 10 in March 2020).
At this time, combine on-chain data (e.g., net outflow from exchanges) to judge institutional intentions.
Cycle Adaptation Principles:
Short-term traders: Focus on observing 4-hour to daily signals.
Long-term investors: Prioritize weekly to monthly signals to avoid frequent operations.
💡 5. Upgrade your trading system.
Sentiment Monitoring Tools:
Record the RSI values and moving average positions for each trade to build your own 'signal database.'
Regularly review erroneous trades to identify personal bias deviations (e.g., always selling too early when RSI = 65).
Dynamic Adjustment Mechanism:
Quarterly backtesting of indicator win rates, adjusting parameters based on market volatility.
During bull-bear transition periods (such as reducing to half a year), shorten the moving average period to 120 days.
Follow me @链上标哥 to avoid getting lost!
