A friend in the cryptocurrency world, a Beijing guy, three years ago after our phone call said he had blown up contracts three times and was in debt of 60 million, then disappeared without a trace. It turned out he had been in seclusion for three years, and now after clearing his debts, he has several small fortunes, earning a monthly income in the seven figures and an annual income in the eight figures!
Some time ago, when we met, I summarized the insights he gained over the past three years (the three axes of cryptocurrency trading), organized them, and through thousands of trading practices, his win rate surprisingly reached 98%. Now, I share this with those destined to receive it.
Without further ado, let's get straight to the point!
First Axe: Essential Cryptocurrency Investment Skills for Retail Investors - The Six Major Moving Averages Theory of K-line!
How to understand technical knowledge of the market to make correct trades? For short-term trading, focus on the important positions of moving averages on the 5-minute and 1-hour charts. Moving averages are very important in any investment product, as they determine the average price changes within a cycle. The secret to judging trends lies in the combination of market feel, technology, and mindset. Next, the instructor will explain how to read the six major moving averages in K-lines:
One, the 5-day moving average - attack.
Grasp the 5-day moving average to form an offensive in the short term, and the price will fluctuate continuously. If the attack line does not weaken or pull back, it indicates strong short-term explosive power. Conversely, it is weak. Similarly, when the price falls, everyone should pay attention to the importance of the attack line in the bearish trend. If the decline is severe (steep angle), then the selling pressure is extremely strong.
In practical trading, when the price breaks above the attack line and the attack line is strongly upward (steeply upward), it indicates that short-term trading can be captured, and one should actively go long at this time. Similarly, when the price breaks below the attack line and the attack line starts to turn downward, it indicates that an adjustment or bearish trend has begun, and one can enter short positions.
When the 60-minute K-line is falling along the 5-day moving average, it confirms that a short-term downward channel has formed. Then, when a bullish candle appears and hits the 5-day moving average, one should short when it falls. At this time, it is best if the 5-minute K-line forms a double top. During a downward trend, never rush to buy on the rebound; one can only wait until the rebound reaches the 60-minute K-line contacting the 5-day moving average or the 10-day moving average or the daily line touching the 5-day moving average to short, using the 5-minute line to assist in judging short-term buying and selling points.
Two, the 10-day moving average - trading.
Also known as the market line. The main function of the trading line is to drive the price to continue to rise or fall in a medium-term wave trend. If the trading line rises steeply and powerfully, it indicates a strong medium-term upward trend. Conversely, it is weak. Similarly, when the price enters a bearish wave, the trading line can also cause the price to fluctuate downward.
In practical trading, when the price breaks through the trading line, and the trading line is in a continuous upward attack state, it indicates that the wave medium-term trend has started, and short-term long positions can be actively entered. Similarly, when the price breaks below the trading line and the trading line turns downward, it indicates that the bullish trend has ended, and large-scale adjustments or bearish trends are about to begin, at which point one should go short.
Three, the 20-day moving average - support.
The main function of the support line is to assist the trading line in promoting and correcting the price's operational intensity and trend angle, stabilizing the direction of the price trend. It also plays a role in correcting the slow response of the lifeline.
In practical trading, when the price breaks through the support line and the support line is in a continuous upward attack state, it indicates that a wave medium-term trend has started, and one should actively go long. Similarly, when the price breaks below the support line and the support line is turning downward, it indicates that the phase medium-term bullish trend has ended, and a phase adjustment or bearish trend has begun, at which point one should go short.
In a general downtrend, performing short-selling after 1-2 strong red candles appearing at relatively low positions is possible, but one must take profits immediately. One should not think about making large profits at this time, as it can easily lead to being trapped. Before the 60-minute line forms a double bottom, timely judge the upward trend based on the 5-minute line and enter long positions as soon as possible, such as going long after completing 3-4 downward waves (resistance decline) on the 5-minute line. If the 60-minute line strongly breaks through the 20-day moving average, one can make a great profit that day.
Four, the 30-day moving average - lifeline.
The main function of the lifeline is to indicate the medium-term operational trend of the price. In a medium-term wave upward trend, the lifeline has strong support and resistance. If the angle of the lifeline's upward movement is steep and powerful, it indicates a strong medium-term upward trend. Conversely, the trend is weaker, and the support will also weaken. Similarly, when the price enters a bearish trend, the lifeline can suppress the rebound behavior of the price, causing the price to continue to weaken.
The lifeline is the foundation of a major bullish or bearish trend. In practical trading, when the price breaks through the lifeline and the lifeline is in a turning upward attack state, it indicates that the medium-term bullish trend has started, and one should actively go long. The lifeline will not be easily broken during the phase of a major bullish trend adjustment. However, when the price breaks below the lifeline and the lifeline is in a turning downward state, it indicates that a larger-scale adjustment or bearish trend has begun, and one should actively go short; pay attention to Fengchu to keep up with market news and grasp the major trend to help you profit steadily!
Five, the 60-day moving average - decision.
The main function of the decision line is to indicate the medium-term reversal trend of the price, guiding the price to operate within the established trend during major wave levels. When the price breaks above or below the decision line in significant volume, it indicates that a major reversal trend has started, and corresponding trading decisions should be made. When the price breaks the decision line, it generally will not reverse direction in a short time; even if the major players create a bait for long or short positions, it will at least operate above or below the decision line for about 10 to 25 trading days before it can reverse.
In practical trading, all major players have a clear understanding of the decision line. The decision line has a decisive significance in the trading plans of major institutions regarding the nature of the market. Therefore, when the price breaks above the decision line and the decision line is in a turning upward attack state, it indicates that a medium-term bullish trend has formed, and one should actively go long. Once the decision is made, it generally will not be easily changed. Thus, once the price breaks through the decision line, it will not be easily broken during a phase adjustment. However, once the price breaks below the decision line and the decision line is turning downward, it indicates that a major bearish trend has begun, and one should decisively go short.
Six, the 120-day moving average - trend.
Like the decision line, the main function of the trend line is to indicate the medium- and long-term reversal trend of the price, guiding or directing the price to operate within the established trend during large-scale fluctuations. When the price breaks above or below the trend line, it indicates that the major trend has reversed, and corresponding trading decisions should be made.
When the price breaks through the trend line, it generally will not reverse direction in a short time. Even if the major players create a bait for long or short positions, it will at least operate above or below the trend line for about 10 trading days or several trading weeks before reversing.
Second axe: teach you how to grasp the best buying and selling timing.
Classic K-line chart explanation: W-shaped bottom pattern
1. Appears after a significant drop in coin price or after a long period of decline.
2. There are two obvious low points of coin prices, and the two price lows are roughly at the same price level.
3. The first bottom of the W-shaped bottom is sometimes a sharp bottom and sometimes a rounded bottom, while the second bottom is mostly a rounded bottom.
4. The trading volume of the second low point is generally smaller than that of the second bottom, indicating good market capital locking.
5. When breaking the previous rebound high point, it usually requires significant trading volume to accompany it, and the volume shrinks during the pullback.
K-line chart classic explanation: breakthrough of the triangle
1. The appearance is often in the middle of a price rise or at the bottom.
2. The high points of each price rise and the low points of each decline form a 'triangle'.
3. From left to right, the price change range becomes smaller and smaller, the trading volume gradually shrinks during the pattern, but at the end of the pattern, the trading volume expands, ultimately breaking through the upper edge of the triangle with a large bullish candle or a small bullish candle.
4. When the price breaks through the upper edge of the triangle, there is often a pullback action, stabilizing at the original high point line to confirm the effectiveness of the upward breakthrough.
K-line chart buying and selling signal: counterattack
Under the premise of establishing an upward trend, the coin price is in a slow rising channel. After a period of slight upward movement, the coin price suddenly comes to a halt during the upward process, followed by a consecutive decline in price, although the extent of the decline is not large. While the coin price pulls out a series of (5 to 7) bearish candles, the trading volume gradually shrinks.
In fact, this is a deliberate method of the major players washing the market. After a wave of price increases, a certain amount of trapped positions and profit positions have accumulated in the market. To successfully expand upward space in the future, it is necessary to flush out these trapped and profit positions. Thus, the major players push down the price, causing investors with positions to feel uncertain, thereby losing their composure and selling their coins; meanwhile, investors looking to build positions dare not enter the market rashly, achieving the purpose of the major players washing the market.
K-line chart buying and selling signal: counterattack
This is a large bullish candle that opens high and rises. The condition for its formation is that the coin has undergone a significant decline, short-selling volume is released, and new bullish momentum is re-accumulated.
When the volume in the volume zone is in an extremely contracted state, suddenly one day, the coin price opens flat and then quickly attacks, closing at or near the highest price of the day, forming a large bullish candle that opens high. This is a strong sign that the coin price has hit a short-term bottom and is a good opportunity to enter the market, and we refer to this large bullish candle that opens high as the "counterattack."
Third axe: classic buying K-line pattern
Classic buying K-line pattern
All paths lead to the same destination, consistent yet diverse. I believe everyone comes to this investment market to make money, just in different ways. Every article written by the instructor aims to provide some help to friends who feel helpless on the investment road. After more than a decade in the market, transforming from an investor to a ferry operator and analyst. Strength and responsibility are my principles. Sharing exclusive strategies daily is only to bring you a share of profits while striving in the market. Grateful to have you on this journey.
Next, I will popularize knowledge about classic K-line buying signals.
1. Star of Hope
"Star of Hope" is also known as the "Morning Star," a typical buying signal.
The appearance of the 'Star of Hope' usually signifies that the selling side's strength has been exhausted, and the price is unable to create new lows. Therefore, new friends can maintain a positive attitude when encountering this K-line combination pattern and buy in appropriately.
2. High-position parallel bullish candles
The so-called high-position parallel bullish candles refer to a sudden upward jump after a period of rising, where individual coins produce two bullish candles with almost the same opening price.
Generally speaking, after forming high-position parallel bullish candles, if the following day's trend remains strong, it can be seen as a very strong buying signal, as the market is often likely to see a continued bullish trend.
3. Lower five bullish candles
Generally speaking, a lower five bullish candles usually appear after a sustained period of decline. Their appearance indicates that the bulls are gradually shifting from a disadvantageous position to a dominant position, and the price is very likely to bottom out and rebound. Therefore, the lower five bullish candles can be seen as a strong buying signal.
4. Gradual rise
First, individual coins record small bullish candles for several consecutive trading days, followed by one or two large bullish candles, forming an overall gradual rise pattern.
Generally speaking, a gradual rise often appears in a bullish market, especially in the early stages of a bullish trend. The probability of this combination pattern appearing is very high, and its occurrence indicates that there will be fluctuations and upward trends in the future market. Therefore, new friends should not only buy in time when they discover this pattern but also hold firmly; only in this way can they obtain the final benefits.
5. Bullish Vanguard
The specific shape of the bullish vanguard is: the first K-line is a medium or large bullish candle, and it has an upper shadow that occupies about one-third of the body. It then begins to fall back and consolidate, and after a period of consolidation, the resulting K-line suddenly breaks above the upper shadow of the previous first bullish candle.
Generally speaking, the bullish vanguard usually appears in a bullish market. If it appears while the short-term moving averages are also in a bullish arrangement, it is a very strong buying signal, and the price is likely to have significant upward space.
Of course, all of these are theoretical aspects, and the specifics depend on whether investment friends can truly pay attention to these during trading. It is particularly important to choose a teacher who can walk alongside you on the investment path. I may not have given you too much warmth, but there is a phrase called 'to the best of my ability'. I don't promise overnight wealth or 100% profit secrets; I only offer a stable trading system and a sincere heart. Trust me, come find me. Saying too many unrealistic things feels very hypocritical. I don't seek overnight wealth! I seek steady progress.
I am A Gui, having experienced multiple bull and bear cycles and possessing rich market experience in various financial fields. Here, I penetrate the fog of information to discover the real market. More opportunities for wealth codes are at your grasp; don’t miss out and regret!