Fifth Tip: Skillfully Use Technical Analysis Adjustments to Make Money in Short-Term Trading
In the cryptocurrency market, no matter how strong the upward trend is, it cannot reach its peak all at once, and in a weak market, it won't hit the bottom with a straight line; it must go through consolidation. After the consolidation and washout, a new wave of rise or fall can brew. This consolidation is technically referred to as a technical adjustment. So what causes this kind of adjustment?
Partly, it is due to profit-takers selling out, which puts pressure on the market from the opposite direction;
Partly, it is due to loss-takers adding positions to average down, which alters the market's direction;
Thirdly, some large players feel that the adjustment or rise has reached their psychological expectations and engage in short-term operations, which can significantly impact the price levels.
This type of adjustment provides us with a short-term opportunity. Seizing this opportunity can lead to considerable profits. For example, during an upward trend, if there are three consecutive days of rising red candles, but each one is shorter than the last, and the increase diminishes day by day, this indicates a signal that a strong rise is about to reverse.
Conversely, the same principle applies during a weak downward trend; taking short positions when an upward adjustment occurs, or going long when a rebound happens in a downtrend, is the best time to make money.
In summary: In grasping specific market conditions, there are many technical methods to analyze the market, and many people have learned numerous technical indicators, ultimately confusing themselves. This is truly unnecessary; trading techniques and methods only need to be moderate. Summarizing a set of trading methods that suit oneself is the key to remaining undefeated in the market.
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