Born in 1995, I have been trading cryptocurrencies for 8 years and have been a full-time trader for 6 years. I have finally touched the 'realm of freedom' in trading.
Rolling from 500,000 in capital to over 75 million wasn't about luck or betting on the market correctly, but rather that heart-wrenching review four years ago that pulled me out of the mire of losses.
Today, I will share all the trading insights that I've kept hidden. After experiencing the heavy rain in the cryptocurrency world, I want to provide an umbrella for those who come after me.
Looking back now, that trading list from four years ago is my most treasured 'error notebook.'
Out of over 1,000 trades, nearly 70% were losing trades, and of the 30% that were profitable, most were small gains before exiting. The real account-destroying losses came from over 200 trades held too long.
Staring at those glaring loss records, I completely awakened: being greedy when it rises and holding onto positions hoping for higher prices, and being lucky enough to hold onto positions waiting for rebounds, this is the typical "gambler's mentality".
Those seemingly insignificant small losses are more terrifying; each time it is "I feel it will go up" and blindly entering the market without thorough research, with entry points being unclear, resulting in small losses accumulating to significant ones, like a frog slowly boiling in water exhausting its capital.
By the end of the review, I finally understood: the real good opportunities are never the "guessing the ups and downs" in range fluctuations, but rather the clear signals at the start of a trend.
In the next six months, I disassembled and reorganized all trading data, chewed and digested technical indicators and market rules, and finally polished out my own trading system.
If there is a core secret to stable profits right now, it must be the "market structure trading method"—this is the root of technical analysis; used correctly, it can yield significant profits, but used incorrectly, it can still lead to losses.
Today I will explain the two core strategies I use daily; even beginners can implement them.
First, pass the basic level: identify the "major highs and lows" so as not to be deceived by the market.
In structural trading, the first step is to distinguish the "major highs and lows" of the price, which is the core of judging the trend. First, look at a simplified model to establish awareness:
The essence of the upward trend is the continuous emergence of structures where "new highs are higher than previous highs, and new lows are higher than previous lows";
Once the price breaks below the previous major low, forming "new lows lower than previous lows", the upward trend is completely reversed.
In a downtrend, the opposite is true, continuously presenting "new highs lower than previous highs, new lows lower than previous lows" until breaking above the previous major high is considered a reversal.
However, real market behavior is never a straight line up or down; there will be pullbacks during an uptrend and rebounds during a downtrend, relying solely on observation can definitely lead to mistakes.
You must remember these two iron rules to ensure consistency in judgment.
Iron Rule 1: If key levels are not broken, all fluctuations are "small interludes"
As long as the price does not break below the main low of the upward trend, or does not break above the main high of the downward trend, any significant fluctuations in between are just normal pullbacks within the trend.
For example, after ETH breaks the previous high, even if it consolidates for a week and then drops by 5 points, as long as it does not touch the key support at the bottom, it is still an upward trend; do not be scared out by this pullback.
Iron Rule 2: At least 3 candlesticks of pullback count as "effective signals"
The market is filled with small pullbacks of 1 or 2 candlesticks, these cannot be considered effective signals and should not be used as the basis for determining highs and lows.
My standard is: there must be 3 or more candlesticks forming a pullback to confirm a new major high or low.
For example: after a certain cryptocurrency breaks a new high, if it shows a small pullback of 2 candlesticks, don’t rush to recognize the high;
Only when the 5th candlestick completes the pullback is this position considered the true "major high", with the corresponding starting point of the upward movement being the "major low".
This rule can help you filter out 80% of ineffective signals and avoid being misled by small fluctuations.
The same goes for downtrends; only when a pullback occurs with more than 3 candlesticks does the resulting low count as an effective major low.
Grasping this core will prevent mistaking a rebound for a reversal and blindly bottom-fishing and getting trapped.
Strategy 1: Trend reversal strategy, capturing turning points for significant profits
The goal of this strategy is to capture the first wave of the main trend after a trend reversal, maximizing profit potential.
The core logic is to "wait for confirmation before entering", do not guess turning points, only act on confirmed reversal signals.
Break down with practical cases for clearer understanding:
Step 1: Define the trend, find key levels
First, determine whether the current trend is up or down. For example, if a certain cryptocurrency is clearly in a downtrend, first identify the recent major highs and lows—pullbacks that exceed 3 candlesticks form a major low, and the high where the downtrend starts is the major high.
Step 2: Wait for the reversal signal to appear
As long as the price fluctuates between the major highs and lows, any rebound is still a pullback in a downtrend. It is only when the price breaks above the previous major high, forming the structure of "new highs greater than previous highs", that the downtrend is considered fully reversed.
Step 3: Find support levels and wait for confirmation signals
Don't rush to enter after a reversal; wait for the price to pull back to the "previous major high"—this position has now changed from a resistance level to a support level. When a bullish engulfing candlestick appears (a bullish candlestick completely covering the previous bearish candlestick), it indicates that the bulls are taking over, and this is the entry signal.
Step 4: Set stop-loss scientifically to protect the principal
Set the stop-loss below the support level and recent low, plus an additional ATR (Average True Range) space. This way, it can prevent breaking down while not getting swept by false breakouts; for instance, you can withstand a spike in price.
The logic of upward turning to downward is the same: when the price breaks below the major low, forming "new lows lower than previous lows", it confirms the reversal. Wait for a pullback to the previous major low (which has now become a resistance level) and if a bearish signal appears (such as a long upper shadow or bearish engulfing), then short, and set the stop-loss above the resistance level + 1 ATR.
Strategy 2: Trend-following trading strategy, making stable money from the trend
If the reversal strategy is about "catching turning points", the trend-following strategy is about "following the trend", which has a higher win rate and is more suitable for beginners. The core idea is "as long as the trend remains unchanged, follow it", and do not go against the market.
Step 1: Confirm the trend, lock in the direction
First, determine whether the current trend is upward or downward. For example, if in an upward trend, only look for long opportunities and abandon all short thoughts. Using previous methods to determine the major highs and lows, as long as it does not break below the major lows, the trend has not changed.
Step 2: Find the core support within the range
Within the range of major highs and lows, there are two key support levels: one is the "previously broken major high" (which has turned into support), and the other is the "support line formed by recent lows". The price will gain support near these two positions.
Step 3: Wait for the signal to enter the market and set the stop-loss
When the price pulls back to the first support level and a bullish signal appears (such as a hammer candlestick or bullish engulfing), you can enter the market. Set the stop-loss below the support level + 1 ATR to ensure you won't be swept away by normal fluctuations. If the price breaks below the first support, wait for the signal at the second support level; if it breaks again, it indicates the trend has changed, and you should exit and observe.
Similarly, in a downtrend, follow the trend to short, only look for bearish signals at resistance levels, stop-loss if it breaks key support, and never hold onto losing positions.
Final summary: The core logic of making money in trading
The essence of these two strategies is "to follow the trend" and relies on three cores: use two iron rules to identify major highs and lows, wait for key levels + candlestick signals to confirm before entering, and use ATR to set stop-losses to control risks.
The reversal strategy profits from large profits at turning points, while the trend-following strategy profits from stable profits from the trend; you can choose based on your personality or combine them.
I went from 500,000 to 75,000,000, relying not on predicting the market but on adhering to these disciplines: not greedy, not stubborn, not blindly entering. There is no guaranteed profit holy grail in the cryptocurrency world, but there are methods that can be replicated.
Collect these strategies, repeatedly compare them with market conditions, and slowly develop your own market sense.
The road of investment is long; short-term gains and losses do not matter. I have been through the rain and do not want you to go through it again.
Follow me, I will share more practical tips later. In the world of cryptocurrency, we will walk together more steadily.
