Things to know after buying Bitcoin:
1. When to sell?
The one who can buy is the apprentice, the one who can sell is the master.
I once bought LINK with 10,000 yuan, and the profit was doubled. In the end, because I had no clear goal, I gave up half of the profit before selling. If the selling target is not set well, it is very likely that the original account showed a profit, but in the end, the account ended up with a loss.
1. Set a target point for take profit and stop loss
Newbies can set three points before buying digital currencies. Buy point, take profit point and stop loss point.
However, the minimum requirement for this is to be able to understand pressure and support.
2. News aspect
Of course we can do more research on intellectual things ourselves and accumulate the underlying knowledge. However, some experiences or pitfalls of people who have been there can make you grow faster. It is said that reading history makes people wise! The same is true in the currency circle. Usually when we judge the trend of the market, we combine news and technical aspects.
Take the recent market situation as an example. Regulators have frequently taken action. Global crypto assets have suffered heavy losses and prices have plummeted. Under this extremely negative situation, the outlook for the crypto market is not optimistic. This is a relatively intuitive news impact.
In addition, you need to know the most basic things such as currency price, circulation volume, total volume, current market value, transaction volume in the past 24 hours, etc. The second is the currency’s computing power, number of active addresses, block size, Google search index, and fear and greed index. In addition, it is the net inflow and net outflow of funds of the currency, as well as the ratio of long and short positions on the trading platform. These data can be used as a reference for short-term price fluctuation predictions.
This data can be found on many information platforms. The ones you may be more familiar with are Bishijie, Feixiaohao, Lianwen, etc.
In addition, I have also compiled some information that can be shared with everyone for free!
1. Currency Forum
2. Foreign language information
3. A must-see website in the currency circle
4. Chinese information website
5. Transaction-related websites
How to see newly issued digital currencies as soon as possible?
3. Technical aspects
Everything cannot be considered alone. News is only a method of judgment, and indicators are also a method of judgment. That is to say, the so-called news and technical aspects must be combined to judge the current market trend, and the vision cannot be too single!
Of course, there are many technical indicators, and I certainly can’t cover them all in one article.
Below I will give an example of one of the indicators for accurate trading in the currency circle - KDJ.
1. What is KDJ?
The KDJ indicator is also known as the stochastic indicator. By introducing the concept of fast and slow moving averages, it calculates the volatility between the highest, lowest and closing prices within a certain period of time, reflecting the strength of the price trend and overbought and overbought dynamics.
2. How to understand the KDJ indicator?
On the general market-reading software chart, the yellow K line represents the fast indicator, the white D line represents the slow indicator, and the red line is the J line. Generally speaking, in terms of sensitivity, the J value is the strongest, the K value is the second, and the D value is the slowest. In terms of safety, J value is the worst, K value is second, and D value is the most stable.
Specifically, the calculation principle of KDJ is to use the highest price, lowest price and closing price of the last calculation period that occurred in a specific period (usually 9 days, 9 weeks, etc.) and the ratio between the three Relationship, to calculate the immature random value RSV of the last calculation period, and then calculate the K value, D value and J value according to the smooth moving average method, and draw a curve chart to study and judge the price trend.
Calculation formula of KDJ indicator
The domestic calculation period for the KDJ indicator is 9 days, and the K value and D value are 3 days. RSV(9)=(Today’s closing price-lowest price in 9 days)÷(Highest price in 9 days-lowest price in 9 days)×100 K(n)=(RSV value of the day+K value of the previous day)÷N D(n) = (K value of the day + D value of the previous day) ÷N J=3K-2D
3. Application of KDJ indicator
According to the value of KDJ, it can be divided into several areas: overbought area, oversold area, and wandering area. According to the general classification standard, the three values of K, D, and J are in the oversold zone when they are below 20, which is a buy signal; when the three values of K, D, and J are above 80, they are in the overbought zone, which is a sell signal; K, D The three values of J and J are between 20 and 80, which is the wandering zone, so it is advisable to wait and see.
1. Generally speaking, when the D line turns from bottom to top, it is a buy signal, and when the D line turns from top to bottom, it is a sell signal. 2. KD fluctuates in the range of 0 to 100, and 50 is the long-short equilibrium line. If you are in a long market, 50 is the support line for retracement; if you are in a short market, 50 is the pressure line for rebound. 3. When the K line crosses the D line at a low level, it is a buy signal, and when the K line crosses the D line at a high level, it is a sell signal. 4. When the K line goes above 90, it is an overbought zone, and when it goes below 10, it is an oversold zone; when the D line goes above 80, it is an overbought zone, and when it goes below 20, it is an oversold zone. It is advisable to pay attention to the timing of buying and selling. …
I have compiled some study materials, which are the following. You can share it with friends in need for free!
1. What are pressure and support? 2. What is a trend and how to identify it? 3. Dow Theory 4. Bollinger Bands 5. Elliott Wave Theory 6. Stochastic Index 7. Relative Index
4. Classic books
I will divide the book recommendations into three parts. The first is the study of the basic theory of digital currency, the second is the study of trading technology, and the third is the study of investment psychology.
1. Basic Theory of Digital Currency
1. "How to Invest in Digital Currency" Author: Wang Bo/Zhou Chaohui
This book is divided into three sections:
Basic knowledge: Let readers fully understand the concept and development of digital currency over the past six years;
2. Investment and Transaction: Introduces readers to all current types and technical points involved in digital currency investment, especially how ordinary investors choose a trading platform, open an account, recharge, buy, sell, and withdraw coins to successfully complete investment transactions;
3. Investment Philosophy: Discussing the wisdom of long-term investment in digital currencies from the source of human history and the various aspects of the digital currency ecosystem, supervision and development.
Suitable for the crowd: Mainly focused on conceptualization, suitable for novices who don’t know much about digital currency.
2. The book "Decrypting Bitcoin" is written by technical geeks and evangelists in the domestic Bitcoin field. Its professionalism and authority are beyond doubt.
From a professional perspective, it comprehensively introduces the development history, basic concepts, currency meaning, currency characteristics, generation principles, operating mechanisms, acquisition methods, transaction methods, circulation principles, and the treatment of Bitcoin by governments around the world in simple and easy-to-understand language. Attitudes and policies, as well as Bitcoin investment common sense, principles, strategies, techniques and investment risk avoidance, etc.
2. Trading technology
1. "Analysis of Technical Value Selling Points" Author: Yang Bo
This book introduces dozens of technical indicators in detail, expounds the principles, usage, and practical skills of each technical indicator in detail, and strives to demonstrate the practical use of each indicator from different aspects and all-round. It can be used as an investor to consult various technical indicators. The handbook of formula indicators can also be used as a handout to improve investors' practical skills.
In addition, the author also relies on years of experience accumulation to summarize the complicated technical analysis knowledge, methods and other contents in accordance with the principle of starting from the shallower to the deeper, in order to enable readers to master the technical analysis in the shortest time and open up the way to make profits in the stock market. Door.
Suitable for the crowd: This book starts from basic principles and gradually transitions to actual practice, with illustrations. This technical classic adopts a step-by-step and easy-to-understand approach, which is suitable for novices who want to get into trading.
2. "New Interpretation of Japanese Candlestick Chart Techniques" by Steve Nissen
Introduction: Candlestick chart is the most popular and oldest form of technical analysis in Japan. Its origin is earlier than the point and line chart in the West and also earlier than the bar chart. The first part of this book details the basic knowledge of candle charts, candle chart combination patterns, candle charts and the overall technical aspects of the market. The second part explains the difference index and new price charts, including three-line direction breakthrough charts, Renko charts and key charts. , thereby helping readers make better investments.
Suitable for the crowd: The author systematically explains the core candlestick charts in a simple, popular and thorough manner, and at the same time integrates candlestick chart analysis, trading, market status and actual combat. It is so detailed and logical, and suitable for beginners.
3. "Zen in Trouble: Illustrations of Technical Theory" by Baldick
This book is divided into 6 chapters, which comprehensively analyzes the essence of the theory of Zen teaching techniques and analyzes the techniques of Zen theory. It includes specific operation steps and analysis of difficult points, and is supplemented by practical diagrams to help readers quickly master the theory from simple to profound.
The greatest feature of this book is the illustrations. A large number of stock charts and schematics are also inserted, and the profound content is interpreted in the form of pictures and texts, making the book full of interest and readability.
Suitable for the crowd: This book first arouses readers' interest in reading through rich pictures, and then conveys the essence of entanglement theory to readers to help readers master the technique of entanglement theory. This kind of content distribution from the outside to the inside is suitable for people who want to make the leap from novice to operating master.
3. Investment Psychology
1. "Rich Dad Poor Dad" Author: Kiyosaki
I won’t go into details about how famous this book is!
main content:
Kiyosaki has two dads: "Poor dad" is his biological father, a highly educated education official; "Rich dad" is the father of his good friend, an entrepreneur who did not graduate from high school but is good at investment and financial management.
The "poor dad" who worked hard all his life lost his job, and the "rich dad" became one of the richest people in Hawaii.
Kiyosaki resolutely followed in the footsteps of his "rich dad" and entered the business world, and has since boarded the express train to wealth. Kiyosaki uses his personal wealth stories to demonstrate the completely different views on money and wealth between "poor dad" and "rich dad". The poor work for money, while the rich let money work for themselves!
Reasons for recommendation: This book is not just a chicken soup for the soul. The investment suggestions it puts forward are of great significance to practical operations. In addition to investment and financial management, it also contains content such as emotional sublimation and exploration of the meaning of life.
2. "Investment Psychology" Author: John R. Noffsinger
After reading this book, you will realize the value of traditional financial tools. Perhaps most importantly, investors' errors in reasoning can affect their investments and, ultimately, their wealth.
Reason for recommendation: By reading, you can learn many psychological biases that may affect investment decisions; understand how these psychological biases affect investment decisions; see how these wrong decisions can erode your wealth, etc.
I have compiled some better books, which can be shared with everyone for free.
1. Dow theory and practical combat 2. He Zaozhong interprets Gann's theory 3. The secret of the distribution of main chips 4. Flush formula from entry to proficiency 5. Investment psychological analysis 6. In-depth explanation of the relationship between volume and price 7. Decryption of handicap predictions and practical combat... …
4. Trading Psychology
I often have people come up to me and say that they suspect that the bankers are just keeping an eye on the little money in my pocket as a small retail investor. Otherwise, why would it go down every time I buy and go up every time I sell? Why do operations always go in the opposite direction?
This problem is actually very simple. Bankers use the trading psychology of retail investors to complete positions, wash orders, promote prices, and ship goods. So as a newcomer to the currency circle, you must understand the following!
Gambler's fallacy: the tendency to believe that the odds of something happening in the future will be changed by past events.
Just like in our trading, due to the influence of people's psychology, when certain key prices are reached, there will be certain resistance and support, which will form similarities in graphics. However, we must know that history will repeat itself, but it will not simply repeat itself. Therefore, as investors we cannot gamble!
Loss aversion: A strong preference to avoid losses. In other words, not losing money is far more important than making money.
For a qualified trader, losing 100 yuan and making one yuan should be the same thing. However, there are always some people who can accept not earning 100 yuan, but cannot accept losing 100 yuan. This is actually a sign of immature investment psychology!
Disposition effect: taking profits early but allowing losses to continue.
For example, if you buy a currency with a cost of 100, it will start to rise. But when the bullish trend turned bearish, it fell again. When you first started, you said you would sell when it returned to 100, but the situation did not improve. You said you would sell it at 70, and then you said you would sell it at 50 when it fell again. As a result, you sold it for 20 in the end!
Outcome bias: Only judging the quality of a decision based on its results, without considering the quality of the decision itself.
For example, when a black swan occurred in the currency circle, many people began to doubt themselves. However, Nassim Taleb once pointed out in his book "The Black Swan" the introduction of the concept of "narrative fallacy", that is, how the flawed past affects our worldview and our expectations for the future. Therefore, we often blind ourselves by making up far-fetched explanations for past regrets and believing them to be true.
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