Let's talk about sideways movement first. There are no clear buy signals or sell signals in sideways movement. It's basically a cycle of ups and downs, and neither buying nor selling is the right move.
So, what is the best strategy to use during sideways movement? In my design, Fish is a coin with high volatility, while Ton is a relatively stable coin. Should I exchange it for Ton to break even, or should I exchange it for Fish to take advantage of the price fluctuations?
First of all, it's clear that sideways movement is the result of two opposing forces balancing each other out, with buying and selling in equilibrium. The frustrating thing about sideways movement is that 1. you don't know when it will break out, so if you exit, you're afraid of missing out on a big increase, and if you enter, you're late for a big decrease, becoming a brand new clown. 2. Sometimes it gives you false signals, and if you misread them, you'll start chasing the increase and killing the decrease, becoming a cute clown.
Let's use the exhaustive method to see which situation is better and think through all the possibilities. My mom taught me that you should always think ahead to be prepared.
But actually, it depends on the specific situation. For example, if it involves multiple coins, some coins are valuable, meaning they are unlikely to go to zero, while others are pump and dump coins, which you should sell as soon as you think of them, without holding them overnight. So, let's focus on the thinking process for valuable coins. For example, are you monitoring the market and able to react accordingly?
- Sideways movement, break even
- Big drop
You've preserved your capital and avoided a significant decrease. Since it's a valuable coin, there is more room for it to rise in the future, so you win. - Big increase
You missed out on a big increase, and the rhythm may be disrupted. Buying means chasing the increase, and it may drop afterwards, so if you don't catch the increase and instead catch the decrease, it's equivalent to a loss. This can lead to a disrupted rhythm. If you're monitoring the market, there's a chance you won't experience the decrease. But also understand that it may not be a peak, but a mountain range.
- Sideways movement, break out
- Big drop
You've taken advantage of the decrease, but since it's a valuable coin, there's a high probability that it will rise again. - Big increase
You've taken advantage of the increase and made money, and the rhythm is just right. Sell during the pullback to avoid the decrease.
Overall, both strategies have their advantages, but if it's a valuable coin, I would prefer the break out strategy during sideways movement. And usually, sideways movement involves small drops and small increases, without a severe decrease, but sometimes there can be a sharp increase.
If you're monitoring the market, definitely break even. Can you have a 30% increase in one minute? Probably not. Preserving capital and waiting for the trend is the most suitable decision. Breaking out and waiting for the trend is passive because you've already entered the market. Generally, the decrease is more intense than the increase.
The same applies to downlines. For downline valuable coins, break out. If it's a downward trend or at a high point, wait a bit longer and find a suitable time to break out.
Today, it kept dropping, and during sideways movement, I broke out and took advantage of a $100 decrease, hehe.
Because I had classes today, and it was a waterfall-like decrease that I couldn't escape. So I lost $100.
Well, not just $100. I made some trades today, thinking I had sold everything, but then I realized I hadn't sold them.
Today, I went from 273 TON to 237 TON, which is a decrease of about $150, or around 900 yuan.
Most of today was a series of judgment errors, and the most important thing is that I overestimated Fish. I didn't perfectly capture each upward rebound and ended up experiencing a decrease. And the upward rebounds were very small, almost negligible.
And it was a two-stage waterfall-like decrease, with not enough time to react, and each stage was more severe and intense than the previous one.
Let's reflect on optimizing the trading strategy. Originally, the trading strategy was based on signals, judging based on two red or two green candles. But this may not be suitable, or maybe it is, but it's not perfect.
We need to consider the market context, whether the market is in a sideways market with ups and downs. In that case, two red and two green signals are valid. If it's an upward trend, two red signals mean a decrease, but what if it doesn't go up? We need to be more cautious. The same goes for a downward trend.
Is it going against the trend? Should I break out?
Now is not the time to break out, when will it be?
I need to modify my trading strategy again.
I need to consider the concept of resistance levels, where it's clear that there is resistance at a certain level, meaning it can't go up or down easily. At this point, I need to look at the overall market. If the market has a 30% pullback in a day, then it's probably a good time to buy. When the resistance comes, things will change, and it could be a big increase or a big decrease, both are possible.
This is a complex operation. The first wave is luck. If the next line is a big increase, then the probability of a continuous increase is high, and vice versa.
Doing it based on cycles is fine, but you also need to have a big picture view. Only looking at cycles can cause you to lose sight of the big picture.
The rhythm is disrupted, and I'm operating like a fool all day.
I had almost 90,000 Fish, but I ended up with only 78,000. I made too many operational mistakes. DeDuse's website is too slow.
I experienced some decreases and failed to buy at the high points.
I made too many mistakes in judging the candlestick today. The most important question is, did the trading strategy fail?
- I misjudged the pullback level because it was a new high, not a cycle I was familiar with, so I was too optimistic about the pullback.
- I was too impatient multiple times. When I saw a strong upward trend, I thought the trend had arrived, so I bought and sold, resulting in losses.
- I sold too late when I was losing due to network issues. But this also caused the price to go up when I bought.
- I didn't dare to predict the bottom and the bottom pressure level.
The decision I need to make is whether to focus on Fish or net profit. I don't care about the quantity of Ton, but the quantity of Fish. The amount of Fish will definitely increase, and this cycle may last for three to five months. Before that, I need to accumulate more Fish. It's about whether I want money or coins. I want coins. If I want money, I'm afraid of decreases, but if I want coins, I'm not afraid of decreases. If it goes up, I'll have more coins, and if it goes down, I won't have fewer coins. During sideways movement, no one can predict what will happen. Sell at high points and wait, buy at low points and wait, and make judgments when there is a trend. Buy when it's available, regardless of whether it's going up or down. Fish coins should not be reduced.