You are very familiar with this method, benefiting for a lifetime.
There is someone around me who likes short-term trading; in just one or two years, he went from 10,000 to 700,000. He is now using this method to support his family and is somewhat wealthy.
After interacting with him for so long, I summarized a few points. I tried to do it for a while and felt it was still okay. You can trade at any time, and I will share with everyone; how much you understand depends on the individual.
First, look at the 8 rules.
1. Seek victory with stability.
Once you enter this market, you must not return empty-handed. It’s normal for investments to have both losses and gains. If you consider losses as a reason to fear this market, then you have completely lost. If investment is about preserving capital and making profits, then how could there still be poor people? Remember that investing is not something that yields results overnight. There is no path that leads to total darkness, nor is there a repetitive investment market where everyone loses. Trading involves ups and downs; no one profits completely, and this market is inherently unfair. Temporary gains and losses do not determine success or failure. If you lack confidence, just earn it back. Do not be timid; those who laugh last are the winners. Of course, if you have a gambling mentality, failure is inevitable.
2. Trade only with the correct mindset.
When you feel angry, tired, or stressed about something, do not trade; your mindset will affect your judgment. The key to maintaining a good mindset is engaging in other daily activities outside of trading. Activities like fitness, reading, and spending time with family and friends help cultivate the right trading mentality.
3. Immediate stop-loss.
Stop-loss is always correct; being wrong is also right. Holding on stubbornly is always wrong, even if you are right; learning to stop-loss means learning to protect yourself. Do not resist losing trades; stop-loss is the cost of trading, and stop-loss orders are the secret weapon of winners. Preserving capital is the eternal secret to not being defeated. Focus on stop-loss; in cryptocurrency trading, stop-loss is something you can control; do not consider profits because profits are determined by the market.
4. Unpredictable.
Do not predict future market conditions; instead, assess the nature of the current market and devise a trading strategy! Trading rules are more important than predictions! This is the real secret to winning in trading; predictions are a trap, a beautiful trap, fundamentally subjective. Everything must be determined by the market, which is always objective and not dependent on traders' subjectivity. Act according to the market, abandon any subjective elements, establish your trading system, give up predictions, and also give up fear and greed. Everything should be dictated by your trading system when entering and exiting the market; these are the prerequisites for a successful trader.
5. Effective strategies.
The essence of financial trading is to have an effective price trend strategy, coupled with good capital management and risk control mechanisms. Using ‘diverse’ yet ‘persistent’ methods, maintain a probabilistic advantage in the speculative market rather than betting everything. As long as you determine the risk you can bear before entering the market, in principle, you are a good trader. 'Plan your trade and strictly execute your trading plan' sounds easy, but whether you can 'trade your plan' is the most critical point and also the hardest to execute.
6. Be strict with yourself.
Overcoming oneself is very difficult. Qing Tian believes it is realistic to understand your own flaws and thoughts to avoid them. Trading doesn’t have to be so complicated; it needs to be simple and effective. When trading cryptocurrencies, find suitable trading principles based on your characteristics and strictly implement them. Discipline and mindset control are more important than improving technical skills; only then can you survive long in the market.
The most important thing in investing is to avoid failure, rather than trying to seize every success. The same goes for trading; it’s better to let go than to do it wrong. Sometimes waiting is also a form of profit.
7. Avoid excessive monitoring and anxiety.
Most newcomers in this market have a poor mindset and are easily affected by market fluctuations, with some even losing sleep over their positions. Once you place an order, regardless of whether it's a profit or a loss, try to look less at the candlesticks. Large bullish or bearish candlesticks during fluctuations can easily stir your emotions, which may lead you to prematurely end a trade, especially when in profit. If you really want to monitor the market, focus more on numerical quotes. Teacher Qing Tian always tells you what the market trend looks like and where the profit-taking and stop-loss positions are before each trade. Build your positions in several steps and strictly follow the trading rules I give you. Over time, you will naturally form your own trading system.
8. Respect and fear the market.
When the market is moving in one direction, never build positions in the opposite direction until there is sufficient evidence to show that the market has turned and the trend has changed. Do not stand in front of a heavy truck to block it. Trade in the direction of the medium trend; buy on dips in an uptrend and sell on rallies in a downtrend. Respect the market trend and trade accordingly to improve your trading success rate. In a clear uptrend, we need to establish a concept of mainly going long and cautiously going short! Do not stubbornly stick to your views!
He has become very familiar with this trading system.
01
The tools used in the trading system are very simple:
(1) Cycle: 5-minute level;
(2) Indicators: 120 Moving Average Trend Indicator + KDJ Oscillation Indicator;
(3) Pattern: Trapezoidal Rule;
02
Let’s discuss the specific use of the trading system from six aspects:
(1) Cycle: 5-minute level.
(2) Trend: Look at the 120 Moving Average.
(3) Pattern: Trapezoidal Rule.
(4) Entry and exit rules for going long.
(5) Entry and exit rules for short selling.
(6) Entry and exit rules during oscillation.
03
Now let’s discuss each one in detail:
(1) Cycle: 5-minute level.
Single cycle operation, only look at the 5-minute level, do not look at other time cycles.
(2) Trend: Look at the 120 Moving Average.
Only go long above the 120 Moving Average and only trade long above the line.
Only short below the 120 Moving Average and only trade short below the line.
(3) Pattern: Trapezoidal Rule.
An ascending trapezoid can be imagined like walking up stairs, step by step.
Descending trapezoid; you can imagine walking down stairs step by step.
(4) Entry and exit rules for going long.
Entry rules for going long: Price is above the 120 Moving Average, the trend is bullish, each trough of the trapezoid is higher than the previous trough (i.e., price bottoms do not make new lows), and each peak of the trapezoid is higher than the previous peak (i.e., price tops make new highs). If these conditions are met, enter long when KDJ indicates a golden cross.
Exit rules: If a peak does not make a new high and the price breaks below the corresponding trough of this peak, you must exit, or if the price makes a new high and then smoothly drops below the corresponding trough, you must exit.
(5) Entry and exit rules for short selling.
Entry rules for short selling: Price is below the 120 Moving Average, the trend is bearish, each peak of the trapezoid is lower than the previous peak (i.e., price tops do not make new highs), and each trough of the trapezoid is lower than the previous trough (i.e., price bottoms make new lows). If these conditions are met, enter a short position when KDJ indicates a dead cross.
Exit rules: If a trough does not make a new low and the price breaks above the corresponding peak of this trough, you must exit, or if the price makes a new low and then smoothly rises above the corresponding peak, you must exit.
(6) Entry and exit rules during oscillation.
Similarly, use the entry and exit rules from (4) and (5); if conditions are met, operate, if not, do not operate.
04
Summary.
(1) According to the above trading system, this trading expert made a profit of 57 times within two months. It may be because the market conditions are smooth and conform to the trading system, so we should also test the effectiveness of the system when studying it.
(2) A complete trading system should include not only cycle selection and entry-exit rules but also capital management rules. Therefore, after learning the above trading system, you should also add your own capital management rules to form a complete trading system.
There is a saying: 'The master leads you to the door, but the cultivation depends on the individual.'
Like and comment for more knowledge to become a trader who is not 'overly smart.'
Recently, I am arranging contracts and spot trading; keep up the pace and marry a few more wives before the New Year.
