Focusing on candlestick charts to agonize over rises and falls is not as good as learning to calculate the space.
Many fans I communicate with initially ask the same question: 'Will this coin rise or fall next?'
Five years ago, when I just transitioned from an institutional trader to an independent trader, I was also obsessed with this question. It wasn't until I experienced multiple market lessons that I realized that merely judging the direction in the crypto circle is almost futile.
I remember the crash in May 2022, when Bitcoin's volatility exceeded 20% within 24 hours. At that time, I accurately predicted the downward trend, but I was washed out during the rebound—I saw the right direction but misjudged the volatility range, resulting in missing out on profits.
The charm and cruelty of the cryptocurrency space stem from its extreme volatility. It is common for mainstream coins to fluctuate over 10% in a day, and altcoins often experience price doubling or halving within the same day.
Price fluctuations are a false proposition; space is the true proposition.
Traditional financial markets have limits on price fluctuations, while the cryptocurrency market trades 24 hours non-stop without such limits, making price trends more like a dance without boundaries.
What does this mean? Even if you judge the direction correctly, you may get washed out of the market due to volatility. For example, you predict a certain cryptocurrency will rise, but a normal pullback during the rise may trigger your stop-loss. As a result, you were right about the direction but lost money.
I've seen too many traders who have a good grasp of technical analysis and can accurately judge trend direction, yet their accounts continue to incur losses. The problem lies in their focus on 'price fluctuations' while neglecting the core issue of how far the price can run.
For example, suppose Bitcoin is fluctuating around $66,000, and you predict it will rise. But if you don't know whether it might rise to $68,000 or $72,000, or if you're unclear about where the support level is, then when to enter, when to exit, and where to set stop-losses all become blind guesses.
Why can 'scythe hands' always make a profit?
After five years as an institutional trader, I learned the most important lesson: professional traders do not pursue precision in directional judgments but focus on optimizing the risk-reward ratio.
We ask ourselves not 'Will it rise or fall?' but rather: 'If it rises, how much can it rise? If it falls, how much can it fall? Is this trade worth participating in?'
This is the thinking of space—calculating the ratio of potential profits to potential losses. A good trading opportunity should have potential profits at least twice the potential risks.
For example, suppose a certain cryptocurrency is currently priced at $100, with strong support at $95 and resistance at $110. The potential risk is $5 ($100-$95), and the potential profit is $10 ($110-$100), giving a risk-reward ratio of 1:2, which meets trading conditions.
How to cultivate spatial thinking: three practical tips.
1. Identify key support and resistance levels.
Use historical candlestick charts to find repeatedly occurring high points (resistance levels) and low points (support levels). For example, Bitcoin has bounced multiple times at $95,000, making that level strong support; it has encountered resistance multiple times at $110,000, making it strong resistance.
2. Use moving averages to determine volatility space.
Moving averages are dynamic support and resistance. The 20-day moving average is an important dividing line between bulls and bears; if the price is above the moving average and the average is trending up, you can hold with confidence; if it breaks below the moving average and cannot quickly recover, you need to exit decisively.
3. Combine volatility indicators (ATR).
The ATR (Average True Range) indicator can help you understand the average volatility range of a cryptocurrency, allowing you to set reasonable stop-loss and take-profit points. If a cryptocurrency has a daily ATR of 5%, you should not set a stop-loss lower than 3%, as normal fluctuations could easily trigger it.
The transition from 'forecaster' to 'space manager.'
When I started teaching fans to focus on space rather than direction, their trading performance improved significantly. Not because their directional judgments became more accurate, but because they started to value risk control and learned how to set reasonable stop-loss and take-profit levels.
The cryptocurrency space is not lacking in stories of sudden wealth, but those who survive long-term are all traders who prioritize 'stability.' This is why I repeatedly emphasize: to survive longer is to earn more. Short-term looks at position, long-term looks at mindset; contracts are about wisdom, not luck.
Now, when fans ask me, 'Will it rise or fall?' I won't answer directly; instead, I will ask them: 'At what position do you plan to enter? Where will you set your stop-loss? What is your target?' For those who cannot answer these questions, I generally suggest they start with simulated trading and not risk real money.
Conclusion: Finding certainty in uncertainty.
The essence of cryptocurrency trading is not predicting the future but finding certainty in uncertainty—certainty about the risk-reward ratio, position size, and stop-loss location.
When you no longer get hung up on price fluctuations but start focusing on space, you have already surpassed 80% of traders mentally. Remember, the money in trading is not made from 'directional money,' but from 'spatial money.'
Even Bitcoin, a relatively mature asset, is affected by multiple factors such as global liquidity, Federal Reserve policies, and market sentiment, and no one can continuously and accurately predict its short-term movements. What we can do is calculate the space for each trade, control the risk, and then let the market unfold itself.
I hope everyone can remember: you may not know whether the next move is up or down, but you must know how high it could go if it rises and how low it could drop if it falls. This is the most important insight I've gained from being an institutional trader to a cryptocurrency blogger.
If you have any questions about space calculation, feel free to discuss in the comments section—I will choose some typical questions to answer in future shares.
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