I have seen too many little cuties rush in when they see a golden cross on the daily chart, only to be pressed down by the main force; staring at the MACD red bars and going all in, then turning around to be trapped at the peak singing. To be honest, playing in the crypto circle, the gap between intermediate players and novices is not about how many fancy indicators you can look at, but whether you can provide a signal to 'verify its authenticity'! Today I’ll share 3 ultra-simple verification methods that you can directly apply after reading, helping you avoid 80% of false signals and stabilize your gains.
Let’s talk about the first one, which is my most commonly used 'Multi-Period Resonance Technique'! A single period's signal is like a 'bad guy', sweet talk is just a trick to get you into bed. For example, the daily chart looks very promising, but the 15-minute chart is still falling continuously; this is likely to be a trap to lure you in! When I usually watch the market, I must do 'daily + 15-minute double confirmation': only when both periods show signals in the same direction and the moving averages are all pointing in one direction can I dare to test with a small position; as long as one period lags behind, no matter how tempting it looks, I can hold back and not act. There was a time when a popular asset looked like it was about to take off on the daily chart, but the 15-minute chart was still hesitating; I firmly held back my buying hand, and sure enough, within two days it pulled back, allowing me to avoid a disaster. Another time, when the double periods synchronized to give a bullish signal, I decisively followed in with a small position and ended up making 12 points, which was fantastic!
The second 'dual insurance on volume and price' can be regarded as a 'mirror to reveal false signals'! Just looking at MACD? That's too narrow! Only the combination of MACD + trading volume can expose the small movements of the main force! Remember two cores: top divergence = 'runaway warning'—the asset price hits a new high, but MACD doesn't follow, and the trading volume shrinks, indicating that buying power is weak, so quickly reduce your position to lock in profits; bottom divergence = 'bottom-buying signal'—the price hits a new low, but MACD doesn't drop and the trading volume shrinks to the extreme, at this point you can boldly add to your position, likely to find a bargain. When a certain mainstream asset fell to a low point, it exactly met the characteristics of bottom divergence; after I added to my position, it quickly rose by 40 points; another time, another asset surged, but MACD and trading volume were off, I timely reduced my position and avoided a subsequent 15-point correction; this operation has been regarded as classic by me to this day!
The third 'double testing rule' is specifically for treating 'single signal superstition'! These two brothers, support and resistance levels, do not count with just a single test! For example, at a certain support level, if it bounces back the first time it falls here, it might just be coincidence; only if it falls to this position again and bounces back quickly, while the trading volume increases, then that is the real support level, so feel free to add to your position; the same goes for resistance levels; if it fails to break through twice and trading volume shrinks, it indicates strong selling pressure, so quickly reduce your position to mitigate risk. Previously, a certain popular asset repeatedly tested a resistance level and failed twice; I decisively reduced my position, and it indeed corrected later, perfectly avoiding the pit~
The core logic is actually very simple: intermediate players never bet on 'isolated evidence', but instead look for 2-3 pieces of evidence to back each other up! These 3 methods may seem plain and unremarkable, but they are all experiences I gained from real losses; there are no complex formulas, no need for rote memorization, and beginners can easily grasp them.
In the crypto circle, seeking stability is 100 times more important than seeking speed! Do you think those who made a lot of money did it by luck? Wrong! They simply have an extra layer of 'verification thinking', avoiding those seemingly tempting traps.
