Today, I will not beat around the bush and go straight to the topic of today: How to survive in "short-term trading"? This survival is not the same as that survival. It is about how to make a profit in the chaotic and uncertain contract market and how to keep the profit and get out of it safely? I believe this is a question that countless people have repeatedly pondered during the desperate time after their "margin call".
After a period of trial asset fluctuations in the "contract market", the author used his original market understanding to define the essence of "short-term contracts" and summarized the following most important points for your reference. (This article only represents the author's personal opinion and does not constitute any investment advice. The article is mainly used to start a discussion with traders around the world to discuss trading techniques)
Note: This article was originally written by "Chuan Shuo Crypto". Please do not use this article to post on Biannce Square. Those who use it will be held accountable.
1. Emotions. This is the first point I want to talk about. In a market with fluctuating prices, people are generally accustomed to looking for resistance in the rising process to intercept the rising trend and are eager to make profits. Almost 10/9 people lose money in this process. This example can be reversed. In the process of falling prices, people are eager to find support to intercept the falling trend and get their own profits. During the period of time that the author traded,
The author also conducted similar short-term transactions (BOLL, EMA, RSI). This is the reference indicator used by the author for short-term transactions. What I want to answer in this example is that everyone has heard the phrase "follow the trend". I still want to put this phrase in this category, based on the author's personal test. If you are a qualified trader or speculator, you must abide by these four words. Especially short-term swing trading! Emotions can only avoid their own certainty and achieve a leap in self by relying on themselves to find their own weaknesses, face their own shortcomings, and understand their own shortcomings.
2. Application of mentality and technical indicators, emotions and mentality sound like synonyms, but in my opinion there is a big difference between these two words. Why do I say that? Take your doubts and questions to see my explanation below.
2.1. In fact, "emotion" is also a small category of mentality. For example, the author's mentality changes during the three stages of opening, holding and closing positions in short-term trading. Before opening a position, everyone seems to pay attention to the extent of the market's "up and down" in the short term, and they will judge whether the market is overbought or oversold based on this. Then they formulate their short-term trading plans. This may be the most common short-term trading method I have seen.
2.2. It was mentioned above that according to whether the market rises or falls to reach one’s psychological overbought or oversold level, one can make short-term trading positions. This category also mentions that some people will conduct short-term trading based on technical indicators such as “boll band, macd volume column, kdj”. These may be the reference indicators used by most people for short-term trading. First, let me introduce these three indicators.
1. MACD: This indicator mainly converts the amount of funds into a volume column from the perspective of the moving average to reflect the display method for traders, but this indicator cannot be used for short-term contract market transactions. From the essence of vol funds, short-term funds do not belong to normal market funds, so I will mention how difficult short-term trading is here.
2. Boll band: I personally think that this indicator is the best indicator that can reflect the short-term market price. The initial moving average can be adjusted from the establishment code of the boll indicator. (If the upper track of the boll band encounters resistance, you can try to short sell. The middle track of the boll band maintains a neutral attitude and does not participate in the market's volatility trading. There are invisible funds locked in here. The lower track of the bool band holds two attitudes: support and break. When trading in real time, the author often observes whether there will be large-volume support, rapid rise in the pin, and other market sentiments to judge whether it is support or break)
3kdj: The essential difference between this indicator and macd is that the initial use is different. As mentioned above, macd is used to predict the amount of funds in the medium and long term price trend (such as buying opportunities before and after the golden cross and dead cross). This indicator often appears frequently in the medium and long term market forecasts, and is also the auxiliary indicator that is closest to the amount of funds combined with vol. So why is kdj the best tool for short-term trading? Seeing this, many friends must have guessed that the settings in terms of moving averages are different. The moving average of macd is basically corresponding to the medium and long term, while kdj is the moving average corresponding to the short-term market. In essence, kdj has more advantages in short-term trading. kdj is also divided into overbought and oversold. If you trade with boll bands in the short term and observe the same resistance and support of the two indicators, I think there will be different transactions.