After so many years of trading, the biggest insight I’ve gained can be summarized in one sentence — simplifying complex things is often the beginning of making money.

I still remember when I first entered the market, wanting to learn every indicator and try every trading strategy. Candlestick charts, moving averages, MACD, Bollinger Bands… countless methodologies out there. At that time, I truly believed that the more tools I mastered, the closer I was to success. But what was the result? I became more and more confused. It took me years to realize one truth: tools themselves are not valuable; what matters is how you use them, and more importantly, whether you can stick with them after using them.

This time, I want to share not those complex systems that require several books to explain, but six core rules that I have tested in real trading and that can genuinely make money. These are accumulated from the turbulent crypto markets, and I hope they can help everyone avoid some pitfalls.

**123 Rule: The Key to Spotting Trend Reversals**

This rule is like the foundation of my trading system — incredibly simple to use but highly effective. It actually originates from the classic Dow Theory, but it’s especially intuitive for judging trend reversals.

How to understand it? Imagine a wave of decline finally coming to a halt. The price begins to stabilize gradually, then breaks above the previous downtrend line — this is the first key point. Next, the price may retrace, which is normal, but the focus is — it no longer makes new lows, which is the second key point. Then, the price moves upward again, this time breaking through the previous rebound high — the third key point. Connecting these three points forms an "N" shape, which signals a possible trend reversal.

When applying this to major cryptocurrencies like Bitcoin and Ethereum, I pay special attention to trading volume. A genuine trend reversal will be accompanied by a significant increase in volume — this is the most convincing confirmation signal. If the price forms a 123 structure but volume doesn’t increase, I usually wait a bit longer, as markets can be very deceptive.

Within the rules is technique; outside the rules is mindset. No matter how perfect the methodology, poor execution is useless. The most valuable aspect of these six rules isn’t their complexity but their resilience under market testing. I hope these experiences can help you on your trading journey.