Preface
This article serves as a recap of key lessons in trading. It’s structured into two segments: mindset and techniques.
⚠️ Disclaimer:
None of the content here constitutes financial advice. Cryptocurrency trading carries high risks and is not legally protected—avoid it unless fully aware of the dangers.
Mindset
Most beginners enter trading during bull markets, lured by visible profits. Initial gains often lead to overconfidence, followed by losses that prompt a deeper study of trading.
Failure Training
Like snipers or pilots, traders need deliberate failure training to stay calm under pressure. Many abandon their strategies after a few losses due to lack of resilience.
Training Method:
- Execute 30 trades using your system.
- Aim to lose in 20 of them—this reveals how hard it is to intentionally fail, often resulting in unexpected profits.
- Trust the system: By detaching from profit goals, you’ll validate your strategy’s effectiveness.
Over 50% of traders never follow a system consistently. This exercise builds discipline and confidence.
Overcoming Greed
The hardest mindset trap is chasing "the last profit." Even seasoned traders struggle with this.
Example: After tripling your capital, the urge to squeeze out extra 10% gains can cloud judgment.
Solution: Stick to your plan. If markets were predictable, everyone would be rich.
Short-Term Trading Techniques
Core Principles
- Trend-following: Trade with the trend, not against it.
- Right-side entries: Confirm trends before acting—no guessing tops/bottoms.
- Risk control: Always set stop-losses.
- AB=CD patterns: Capitalize on post-surge pullbacks for 1:1 profit targets.
Short vs. Long-Term Trading
- Short-term: Driven by emotions (e.g., FOMO or panic).
- Long-term: Tied to fundamentals like inflation or policy changes.
Key Insight: Crypto rallies spread gradually; crashes happen swiftly. Adjust strategies accordingly.
Resistance & Patterns
Forget complex shapes like head-and-shoulders—focus on price rejection zones. Example:
- A strong bullish candle hitting resistance, followed by a failed drop, signals a long opportunity.
Shorting Strategies
- Bear flags at resistance: Sell when bounces fail to break resistance.
- Flat-top breakdowns: Short after consolidation fails to advance.
👉 Explore advanced shorting tactics
Pro tip: Shorts often hit targets faster (3–6 hours vs. 24+ hours for longs).
Long Trades
- Enter after confirmed uptrend pullbacks (1:1 reward).
- Hold until momentum wanes, e.g., when rallies don’t meet expected targets.
Case Study:
- In a bullish trend, hold through minor dips unless trendlines break.
- Use moving averages (e.g., 5-day MA) as dynamic support for entries.
Handling Choppy Markets
- Flag patterns: Easy to trade but rare.
- Complex consolidations: Wait for clear breakout candles.
- Avoid overpredicting: Markets defy expectations—react, don’t anticipate.
Trading Frequency, Win Rate, and Risk/Reward
Choose two of three:
- High frequency + high win rate (scalping): Small gains, tight stops.
- Low frequency + high risk/reward (swing trading): Fewer trades, bigger payouts.
- Ultra-low frequency + high win rate (long-term investing): Patience required.
Avoid labels: Stay flexible. Adapt to market conditions—don’t lock into "only shorts" or "only longs."
Position Sizing & Review
How to Review Trades
- Quantitative analysis: Stats on historical moves (e.g., pullback depths).
- Manual replay: Watch past charts to build intuition ("screen time").
Pro tip: Manual review cultivates "feel," though it’s time-consuming.
Avoiding Hindsight Bias
Test hunches in real-time with a small account:
- If you "knew" a drop was coming, did you short it? Track 20 trades to see if gut instincts align with results.
FAQs
Q: Why do most short-term traders fail?
A: They neglect risk management and let emotions override systems.
Q: How do I stop overtrading?
A: Set daily limits. For example, max 3 trades/day—after that, step away.
Q: What’s the biggest edge in trading?
A: Consistency. A 55% win rate with solid risk/reward beats sporadic wins.
Q: How long to develop "feel" for markets?
A: 6–12 months of daily chart review + live practice.
👉 Boost your trading discipline
Final Tip: Trading isn’t about being right—it’s about managing wrong bets gracefully. Stay adaptable, and let probabilities work for you.