Having immersed myself in the crypto world for seven or eight years, from initially blindly chasing gains to now operating steadily, I’ve accumulated quite a few practical insights. Some of these lessons were learned the hard way with real money, while others are patterns verified through repeated testing. Today, I want to share the 7 core principles—even mastering just one of them can help you avoid some common big pitfalls.
**Volume Structure Is the Core of Trading**
Many people spend all day watching candlestick charts; they chase after rises and cut losses during dips. In reality, this approach is completely backwards. Price is just the final result presented by the market; trading volume is the true force driving price movements. Think of volume like a pulse—strong pulses indicate a healthy heart, while weak pulses should raise suspicion. Traders who don’t understand volume logic haven’t truly entered the market.
**Stepped Declines After Rapid Rises ≠ High Risk**
This phenomenon is quite common. Usually, it’s market participants exchanging and clearing chips, not necessarily indicating imminent danger. However, if a large red candle with high volume appears at a high level, you should be alert. This isn’t just retail panic; often, big funds are distributing positions at high levels, which can lead to subsequent weakening.
**Flash Crashes and Rebounds Are the Most Hidden Traps**
After a sharp market decline, there’s often a weak rebound. Many mistake this for a new upward trend. In reality, it’s often the final distribution of chips. The market loves to harvest those who cling to the hope that “it won’t fall further, so it should rebound.” Not participating at this point is the correct approach.
**Low Volume Is the True Risk Signal**
Many believe that increasing volume signals a top, but actually, it’s quite the opposite. During an uptrend, rising volume indicates strong market consensus and health. Conversely, when prices rise but volume shrinks significantly, it’s often a sign that the bears are quietly gathering strength, hinting at an impending reversal.
**Volume at the Bottom Indicates Sustainability**
Volume at the bottom is common, but it doesn’t necessarily mean a reversal has begun. Sometimes it’s just a tentative probe by funds. A meaningful bottom reversal requires volume to break above key support levels and sustain. In comparison, slow and steady rises are often safer because they reflect more rational participation.
**Price Is Emotion, Volume Is Consensus**
On the surface, trading crypto involves studying candlestick patterns and technical indicators, but at its core, it’s about human nature. Volume represents the strength of market participants’ true consensus, while price often reflects collective emotion. If you understand what volume signifies, you can better gauge the market rhythm.
**The Secret of Masters Is Wu Wei (Non-Action)**
Those who truly make money are never the fastest responders nor the most frequent traders. Their common trait is maintaining a calm mindset, waiting patiently for opportunities, not blindly chasing profits, and not fearing short-term fluctuations. They don’t rush into trades; they stay patient when it’s time to hold, and act decisively when it’s time to add positions. Mastering this rhythm is key to surviving long-term in the market.
Those who can go far in the crypto space are always participants with both solid trading logic and strong psychological resilience. If you genuinely want to understand contract trading principles and break free from the cycle of repeated losses, take the time to thoroughly grasp these principles and verify them through real trading.
**Volume Structure Is the Core of Trading**
Many people spend all day watching candlestick charts; they chase after rises and cut losses during dips. In reality, this approach is completely backwards. Price is just the final result presented by the market; trading volume is the true force driving price movements. Think of volume like a pulse—strong pulses indicate a healthy heart, while weak pulses should raise suspicion. Traders who don’t understand volume logic haven’t truly entered the market.
**Stepped Declines After Rapid Rises ≠ High Risk**
This phenomenon is quite common. Usually, it’s market participants exchanging and clearing chips, not necessarily indicating imminent danger. However, if a large red candle with high volume appears at a high level, you should be alert. This isn’t just retail panic; often, big funds are distributing positions at high levels, which can lead to subsequent weakening.
**Flash Crashes and Rebounds Are the Most Hidden Traps**
After a sharp market decline, there’s often a weak rebound. Many mistake this for a new upward trend. In reality, it’s often the final distribution of chips. The market loves to harvest those who cling to the hope that “it won’t fall further, so it should rebound.” Not participating at this point is the correct approach.
**Low Volume Is the True Risk Signal**
Many believe that increasing volume signals a top, but actually, it’s quite the opposite. During an uptrend, rising volume indicates strong market consensus and health. Conversely, when prices rise but volume shrinks significantly, it’s often a sign that the bears are quietly gathering strength, hinting at an impending reversal.
**Volume at the Bottom Indicates Sustainability**
Volume at the bottom is common, but it doesn’t necessarily mean a reversal has begun. Sometimes it’s just a tentative probe by funds. A meaningful bottom reversal requires volume to break above key support levels and sustain. In comparison, slow and steady rises are often safer because they reflect more rational participation.
**Price Is Emotion, Volume Is Consensus**
On the surface, trading crypto involves studying candlestick patterns and technical indicators, but at its core, it’s about human nature. Volume represents the strength of market participants’ true consensus, while price often reflects collective emotion. If you understand what volume signifies, you can better gauge the market rhythm.
**The Secret of Masters Is Wu Wei (Non-Action)**
Those who truly make money are never the fastest responders nor the most frequent traders. Their common trait is maintaining a calm mindset, waiting patiently for opportunities, not blindly chasing profits, and not fearing short-term fluctuations. They don’t rush into trades; they stay patient when it’s time to hold, and act decisively when it’s time to add positions. Mastering this rhythm is key to surviving long-term in the market.
Those who can go far in the crypto space are always participants with both solid trading logic and strong psychological resilience. If you genuinely want to understand contract trading principles and break free from the cycle of repeated losses, take the time to thoroughly grasp these principles and verify them through real trading.
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