Staring at the remaining 1246 dollars in my account, I slapped myself hard. This was the hard-earned money I had saved up over three years working in the factory.
On that rainy night in 2018, I curled up in front of the computer in my rented room, my fingers trembling as I refreshed the trading page. In just twelve days, my half-year salary had shrunk to only one-tenth. I couldn't swallow the instant noodles after three bites, my mind was filled with 'how to explain this to my parents.'
At that time, my monthly salary was five thousand, and this money was meant to repair the roof back home. Misled by the myth of 'doubling overnight' in the cryptocurrency world, I believed what netizens said about a niche coin having 'big capital behind it,' and without even understanding the white paper, I dove in with all my funds. The result was predictable; the market dealt me a heavy blow.
Eight years have passed, and I have grown from being a 'retail investor' in the cryptocurrency market who was bloodied by losses to a veteran capable of earning over ten thousand a month. Today, by revealing my trading system, these four ironclad rules that were bought with real money may help you avoid detours.
01 Only focus on targets recognized by capital; say goodbye to worthless junk that 'no one acknowledges when it drops'.
The lessons from 2019 are still fresh in my memory. At that time, a certain cryptocurrency dropped from $10 to $3, and I slapped my thigh shouting 'Isn't this a good time to buy?'. After investing my remaining principal, it fell all the way to $1.5. I was completely trapped as a 'long-term shareholder', and even the price of cigarettes dropped from $10 to $5.
I later realized: in the cryptocurrency market, cheap prices are not a result of falling, but are built up with real money. Junk coins remain junk, while coins that funds are eager to buy, regardless of their price, still have room.
My selection criteria are simple and practical: only select the top 30% of targets with the highest increase in the last 7 days, and the daily trading volume must have increased for 3 consecutive days. Skip anything with a trading volume below $5 million—cryptocurrencies with poor liquidity may not be sellable even if they make money.
More critically, the blacklist: any target that closes with three consecutive bearish days is removed from my watchlist. Don't believe the nonsense that 'a pullback is a buying opportunity'; continuous declines in the cryptocurrency market either indicate large funds are fleeing or the project is collapsing. Following this rule has helped me avoid countless pitfalls.
02 The monthly MACD golden cross is the signal to start; daily fluctuations are just noise.
When I first entered the market, I stared at the daily chart until my eyes hurt, losing sleep over a 2% rise and wanting to cut losses over a 3% drop. Now I understand that the daily chart is like a child's face that changes unpredictably; trading based on daily movements is merely being played by the market.
My method for judging the overall trend is simple enough to teach a middle school student: open the monthly chart and stubbornly study the MACD indicator. If the monthly MACD does not have a golden cross, do not engage no matter how lively it is.
Why? The monthly line represents the consensus of large funds, and below the zero line is the weak zone. During the bear market in 2022, ETH rebounded more than 10% several times on the daily line, but the monthly MACD was still lying below the zero line. Those who shouted 'the bottom has arrived' and rushed in ended up becoming bag holders.
I only enter the market in two situations: when the monthly MACD just has a golden cross, or when it retraces to the zero line after the golden cross. This is equivalent to following the main force for a free meal, rather than trying to extract profit from a weak position.
03 The 60-day moving average + volume spike candlestick, bottom fishing is based on signals, not feelings.
Seeing the trend correctly but buying at the peak is the reason many people incur losses. My buying standards are precise: the daily price must retrace to near the 60-day moving average and show a volume stabilization candlestick before I take action.
The 60-day moving average is the 'lifeline' of the short-term trend. When the price retraces to this level, short-term profit-taking positions are mostly cleared, and the selling pressure will be much smaller. The volume stabilization candlestick must meet two conditions: the shape is a bullish engulfing or a long lower shadow, and the trading volume for the day is more than 1.5 times the average of the previous three days.
My operation with ARB in 2023 is an example. After the monthly MACD golden cross, when the daily line retraced to the 60-day moving average and showed a bullish engulfing pattern, with trading volume twice that of the previous three days, I decisively used 20% of my capital to build a position and made a 40% profit in 15 days.
A small reminder: even if the signal is perfect, don't let your entry position exceed 30% of your total capital. There is no 100% certainty in the cryptocurrency market, and leaving some margin allows you to handle unexpected situations.
04 Protect your principal; profit-taking and loss-cutting are ingrained in me.
The essence of trading is not 'how much can I earn', but 'how much can I hold on to'. I have seen too many people go from a 50% profit to losing all their principal, all because of 'lack of discipline'.
My holding rules are posted next to my screen: use the 60-day moving average as the lifeline; hold when above it, and flee when below it.
Specifically, there are three steps: when the wave rises by 30%, reduce your position by 1/3; when it rises by 50%, reduce another 1/3; if the closing price falls below the 60-day moving average, regardless of profit or loss, directly liquidate.
In 2023, one cryptocurrency I held suddenly plummeted, closing below the 60-day moving average. At that time, I was still down by 5%, but I cleared my position without hesitation. As a result, it fell another 25% the next day. This rule saved me from disaster. As long as the principal is preserved, opportunities will still exist.
The mentality of taking chances is the fatal flaw of retail investors. What you think is 'just wait for a rebound' could be the beginning of the main force unloading; your fear of 'missing the sell' is actually the rational way to protect your principal.
I still remember that coworker who, in 2023, shouted 'I want to earn enough for the down payment' when his cryptocurrency was in profit. I advised him to take profits, but he didn't listen. As a result, half a month later, the price halved, and not only did the profit evaporate, but he also lost his principal. Meanwhile, by following these rules, I have been able to earn stable profits every year for the past few years.
The cryptocurrency market is not a casino, but a place that requires expertise and discipline. Those who think about 'betting everything to get rich' will eventually be eliminated by the market; only by maintaining the mindset of 'surviving to earn more' and adhering to their own trading rules can one survive in this market for the long term.
In eight years, I went from not understanding MACD as a novice to being able to earn stable profits. My biggest realization is that in the cryptocurrency market, lasting longer is more important than earning quickly.
Follow Xiang Ge, and let him guide you to understand more first-hand information and precise points in the cryptocurrency world, becoming your navigation in the crypto space. Learning is your greatest wealth!#巨鲸动向 #加密市场观察 $ETH
