Regarding the curse of 'buying and it drops, selling and it rises.' If you think about this issue from another perspective, you will understand a very simple truth: market makers have built such a large team and invested so much money to make your money, not to help you make money. This is the main point. All actions revolve around this point: market makers work hard for months or even a year to secretly collect bottom chips. Why would they lift you up? Therefore, before the price rises, market makers must push you off the vehicle. How do they do this? By washing out positions!
After market makers have been hiding for a period of time and have accumulated enough chips to control the market, the fate of the entire K-line is completely in the hands of the market makers. Controlling the K-line is equivalent to holding the hearts of retail investors. The K-line is like a rope, and retail investors are like a flock of sheep; wherever the market makers pull, you go. You think you won't be easily swayed, but you overestimate yourself. As long as you have humanity and desires, you cannot remain completely calm. Emotional fluctuations can occur in an instant, and buying and selling actions only take a second. It won’t give you any time to realize that your emotions are being manipulated. Once you realize all this, you have already completed the buying or selling action, which is also what the market makers want you to do.
When you think this will rise and so do others, most people will feel the same. Therefore, it’s not just you buying in; others are buying in as well. Once everyone is in, can the market makers still push the price up? When the price does rise, you all make profits and leave; who will buy from the market makers then? Therefore, once you all follow in, the market makers will wash out positions until there are no weak hands left. Unless you uninstall the platform after your purchase, then the market makers truly have no way, but how many can do that?
Conversely, when no one thinks this will rise, and no retail investors flood in, and the previous retail investors have mostly been washed out, then the market makers will start to push the price up, directly raising it with a big green candle. Whether you chase or not, if too many people chase, I will repeat the washout action again. If you don’t chase, then why wouldn’t the market makers continue to rise? You successfully miss the opportunity. Therefore, 'buying and it drops, selling and it rises' has a certain inevitability, resulting from the actions of the vast majority of retail investors. This is a dynamic direction. As long as it involves the 'majority of people,' this curse will occur. How to be among the minority? Market makers hunt retail investors, and we hunt market makers. When market makers hunt retail investors, we watch the show. When market makers lift the price, we follow the trend. When market makers distribute chips, we run away. The common characteristic of the minority is: patience. Like a wolf, they watch their prey, motionless. Knowing oneself and knowing the enemy can lead to victory in every battle. Understanding the movements of the enemy allows for targeted strikes.
If you think about getting rich overnight and can't help but make dozens of trades a day, then the K-line movements mean nothing to you, and your money will eventually go to zero. Don’t deny it; patience is a luxury for most retail investors. Of course, this does not apply to professional short-term traders, who need not only patience but also sharp insight. If you have nothing and rely solely on guessing, you are gambling, and you are gambling against a market maker who can cheat. How can you not lose?
Selecting coins and catching bottoms:
If you want to compete with market makers, you need to have a comprehensive understanding of them. Each market maker has their unique trading methods.
Some are bold and aggressive, while others are cautious and meticulous; some are bloody and violent, while others are gentle and refined. Based on their attitude towards retail investors, they can be divided into two types: benevolent market makers and malicious market makers.
Starting from the bottom.
Climbing slowly all the way; as long as you are in the vehicle, it won’t be long before you see returns. There aren’t huge fluctuations, so there’s no need to panic.
You, the market maker, make money and also bring you along to earn, giving you a big brother feeling. This kind of market maker is rare! However, most are like this: a big spike to lure in buyers, distributing to retail investors at high points, and then a big drop to cut them off. Many small investors are left hanging on high spikes, and the methods are extremely violent and cruel. The same trading techniques are repeatedly used, and they enjoy it. In front of such market makers, it’s very difficult for you to make money. Even if you make a little profit by good luck, you will ultimately give it back to them, and not only will you not make money, but you will also suffer greatly. Such market makers are ruthless with their trading methods.
By observing the trading methods used by market makers, one can roughly judge what type of market maker they are, then estimate the difficulty of making money in this market, and choose those with simpler difficulties.
With this basic concept in mind, let's look at the entry points of market makers, which is commonly referred to as catching the bottom. What is the 'bottom'?
Can we catch the bottom? First, let's talk about what forms the 'bottom.' When the price of a coin reaches its market value, the 'bottom' is about to appear. How to understand this? When the value of a commodity is recognized by the 'majority of capital,' its value will be in a relatively stable state. This 'majority of capital' can be considered as the market makers, and the value recognized by them is essentially its market value.
When a commodity is suddenly and frequently acquired, it cannot remain stable at the original price. Scarcity increases value, and at this point, the price will rise. Once the price rises, buying power will relatively decrease. As buying power decreases, the price will seek to balance and fall again. If it falls to a new low again, it indicates that the previous low price was not recognized by market makers, meaning they did not genuinely acquire it.
When the price hits a new low again, buying power will reappear, and the price will rise again. As buying power decreases, the price will drop again. If at this time the price does not return to the original lowest price, it indicates one thing: 'capital is continuously acquiring.'
If you can judge correctly eight out of ten times, then you can make money. If you want to rely on luck to catch the very bottom, remember that there is always a lower bottom; trying to catch a falling knife will only result in injury.
Riding the coattails:
For retail investors, do such powerful market makers have weaknesses? Yes, this weakness is the market maker's throat, and what we need to do is strike precisely. When a market maker infiltrates a coin and starts collecting chips, that coin is unlikely to make new lows again. Even if there are occasional events that lead to new lows, they will quickly be pulled back. When the main chips are collected sufficiently, the main player must do one thing: initiate a rise. Even if many retail investors enter the market at this time, the market maker must still push the price up because they have enough chips. At this time, what we need to do is ride this wave and enjoy the profits.
When does a trend start? When a coin stops making new lows, it indicates that market makers have entered, and the upward trend has begun. Once the trend starts, every decline is an opportunity to enter; do not miss it.
During the upward process, many retail investors will follow the trend. The goal of a downturn is to wash out positions, but in reality, during the rise, you chase at high points, and during the washout, you cannot bear the losses at low points and sell off. Take a look at your trading records; it’s quite ridiculous to reflect on it. Every decline in an upward trend is a washout. Don’t think that every decline means this coin is failing, that it will drop to zero or be delisted. It's merely a washout, a false action at most. As long as you have this concept in mind, you have already surpassed 80% of retail investors. At least the K-line has a larger framework in your eyes; as long as there is a large framework, you have a sense of security, and the rest is patience.
Strategic trading:
How are resistance and support levels formed?
Resistance levels are created by the collective power of retail investors, who remain united in this area. After a peak has many retail investors trapped, these investors become numb and indifferent. Whether in the stock market or cryptocurrency market, after significant drops, they become indifferent; a slight rise makes them anxious to sell, fearing profit loss. The real action is to stop losses in time and hold on to the trend patiently to reap the rewards.
When the price returns to this position, everyone rushes to exit their positions. After waiting so long, that price point returns, and due to the massive selling pressure from those exiting their positions, a resistance level is formed with significant suppressive power.
The same principle applies. Support levels often play a supporting role only in an upward channel. When many retail investors chase the price at the previous high, and the price returns to this level, the market sentiment remains bullish, resulting in very little selling pressure. This forms a practical support level, and prices often rebound from this point. There are no absolute support levels, nor absolute resistance levels. Support and resistance levels only have effect within a fixed trend.
There are no unbreakable resistance levels, nor unbreakable support levels, so simply drawing lines is of no use. The trend is the overall framework; without a framework, no indicator has judgmental value.
Five major investment rules:
1. Consider and observe the project from multiple perspectives. Do not blindly follow others. Many copycat projects have appeared in the cryptocurrency space; if the founder runs away, there is no way to hold them legally accountable.
2. Understand blockchain-related knowledge and know the industry pain points that blockchain solves before entering the cryptocurrency market.
3. For the project you want to invest in, you must have a comprehensive understanding of it. Understand whether the project truly uses blockchain technology, whether its founder is public, and whether the business logic of this project is closely linked to the token. Check if similar projects already exist in the same industry and whether they address industry pain points. If the project is successfully implemented, does it have the ability to generate profits in real life?
4. If you cannot accurately judge the future prospects of a coin's project, do not invest more than 20% of your assets in blockchain investments, and do not put all your eggs in one basket.
5. Quality projects will also experience fluctuations. Treat them with a calm mind; for the projects you believe in, don’t be too concerned about the price in the short term. Pay attention to whether the team’s development progress aligns with the white paper. Additionally, only by holding long-term can you ultimately earn more profits.
That's all for today. During a bull market phase, many people hope to have discussions. If you really can't navigate the cryptocurrency space yourself, don't force it. Seek mentorship early to learn the latest information, strategize, embrace the bull market, improve your winning rate, and say goodbye to being trapped at high positions.
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