Recently, many people in the background are asking 'How to make money in a volatile market.' I can tell at a glance that many have been confused by the back-and-forth harvesting! First, let me give you some reassurance: volatility is not the end of the world; instead, it might be a 'benefit period' for retail investors—provided you don't operate blindly.
As an analyst who has been 'lying down and winning' in the crypto market for years, I never fight with the market or guess the ups and downs, after all, even deities can't guess right every time. But I have a 'counterintuitive' trading system that makes money based on probability and discipline, allowing for stable profits even in a volatile market. Today, I will break down this system for you, filled with practical insights, and I suggest you save it and read it slowly!
1. First correct a fatal misconception: not realizing profits is equivalent to working for nothing.
I have seen too many 'paper millionaires' who can't wait to show off to the world when their accounts are in the green, only to lose all their profits and even incur losses when the market turns, ultimately cursing and exiting the market. This stems from not understanding a core logic: only the money that is truly transferred to a secure wallet is your own!
My response method is the 'take half profit method': set a profit-taking line in advance, and as soon as profits reach 10% of the principal, transfer half of the profits to offline secure storage without hesitation. For the remaining half of the profit, you can let it fluctuate in the market; even if it incurs a loss, you have already made 5% of the principal, so you won't lose; if it continues to rise, that will be an extra surprise. This method may seem 'conservative', but it can help you lock in profits during bull markets and protect your principal during bear markets, ultimately earning more and more steadily than those who are greedy.
2. Misaligned positioning in two or three cycles: turning a volatile market into a 'cash machine'
The characteristic of a volatile market is its up-and-down fluctuations; chasing highs and cutting losses will lead to being hurt. So we need to change our mindset: rather than guessing the direction, we should 'layout in both directions'. Here, I will use my 'three-cycle misalignment positioning method', which simply means 'look at the big picture and act small', using three time frames to validate each other and find the safest entry points.
The specific operation is quite simple: first look at the daily chart to determine whether the current trend is upward, downward, or sideways; then look at the 4-hour chart to define the specific range of fluctuations and find key support and resistance levels; finally, look at the 15-minute chart to find the precise entry timing. Then, simultaneously set up two trades: one following the daily trend, entering when breaking key levels, with a stop loss placed below prior lows; the other placing a limit order when overbought or oversold signals appear on the 4-hour chart to capture profit from corrections.
Here, I must emphasize an iron rule: the stop loss for each trade cannot exceed 1.5% of the principal, and the profit target should be at least 5 times the stop loss. That way, even if one trade goes wrong, the profit from the other trade can cover the loss, and there might even be additional gains. I have used this method to make 'dual profits' in volatile markets, which is much more reliable than blindly guessing the direction!
3. Accept 'low win rates': the core of trading is 'big wins and small losses'.
Many beginners have a 'perfectionist complex', believing they must guess right every time, otherwise they are 'no good'. In fact, this is the biggest misconception! Trading is fundamentally a game of probability; even the top analysts find it hard to exceed a 50% win rate. What truly determines your long-term profitability is not the win rate, but the risk-reward ratio.
I have always maintained a 5:1 risk-reward ratio, meaning the money I make from one winning trade can cover five losing trades. Let me do the math for you: if your win rate is 35% and your risk-reward ratio is 5:1, your expected return will be positive in the long run; but if your risk-reward ratio is 1:1, even if your win rate is 45%, you will still incur losses over time. So don't get caught up in 'whether this time is right or wrong', but ensure that 'you earn more when you win and lose less when you lose'; this is the essence of trading.
### My exclusive life-saving discipline, just copy my homework.
1. Divide your funds into 10 parts, use only 1 part for each trade, and hold a maximum of 3 varieties at the same time to avoid excessive concentration of risk; 2. Stop trading after two consecutive losses, regardless of how reluctant you are to leave the market; trades made in emotional turmoil are 99% wrong; 3. After doubling your account, immediately withdraw 20% to buy stable assets to lock in profits, and don't reinvest all profits into risky ventures.
Finally, I want to tell everyone: the cryptocurrency market is never short of opportunities; what is lacking are those who can 'survive'. You don't have to stay up every night staring at the market, nor chase various rumors; as long as you can protect your principal, follow the rules, and trade with a probabilistic mindset, you can make money in this market in the long run.
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