Trading Rule 101

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Since I don’t do margin trading any more, neither long nor shot, what I do are only two things, one is to buy, the other is to sell.

I always believe that if I do it right, the profit will come to me, and I don’t need to chase it at all. This is also why I have to follow some rules and avoid all those mistakes which I had made before.

After missing tons of pumps, I have to change my trading strategy, basic rule is that to buy the dip and to sell when it is the biggest % gain (over 100% in 24H) of the day.

Part 1 To Trade

All you need to do is to follow the trend, & don’t go against it just because you miss the perfect/beginning entry. The following are the general rules of trading:

1.  Rule of Capital

Protect your capital, don’t lose money. This rule will be used when you are in doubt, when other rules don’t work.

For everything on exchange, capital means USD, not BTC, always protect your USD not your BTC.

Eliminate blind hope and always limit your loss.

2. Rule of Rumor & News

Buy the rumor when there’s a comfortable stop-loss, & sell the news before it comes out.

Warning: Rumor is only used to buy, not to hold.

For example, when an exchange starts to add a new coin, which usually will be pumped soon, and when the trading starts, it will usually be dumped after the pump.

3. Rule of Price

Price is only used to set a comfortable stop-loss, not to predict the top or the bottom.

When you think $10000/BTC is too high, you will doom to miss $20000/BTC.

4. Rule of Prediction

Only TA if a market is going to bull or not, don’t predict how high or how low the price will go.

One of my mistakes was trying to predict the top, 100% or 1000%.

Except stop-loss, no any other open orders any more.

5. Rule of Twitter

Stop searching Twitter for your current or next bags, otherwise you will get REKT sooner or later, since no matter what $ you search, you will always see someone is shilling it, cuz every coin has its own investors, and you 100% will buy their bags.

Sometimes you can just trade by a tweet from the dev team of a coin, or from a famous tweep who praises a coin. And most of the time, the more you dislike a market because of over shilling, the more you will earn from it.

6. Rule of Chart

Candlestick patterns

Mainly look for shooting star to exit and hammer to entry, no more BB, MACD, MA, EMA or FIB.

Only stick to the daily time frame for trending, and only stick to smaller time frames for buying at a lower price and selling at a higher price.

When the chart goes against the order book, trust the order book.

Part 2 To buy

While what to buy does not matter, when to buy, how much to buy and how many to buy will be very important.

1. When to buy

Only buy the bottom — when there is a strong support from price, orderbook, chart and/or rumor.

1.1 To buy the hammer


When there is a hammer on the daily or weekly chart, consider to buy if there’s a comfortable stop-loss.

1.2 To buy the orderbook

Buywall > Sellwall

When the buywall is much higher than the sellwall, people prefer to buy than to sell.

1.3 To buy the bottom

All Time Low

When the price is closed to all time low, it is a good time to buy.

Among the above 3 ways, the first two are good for short-term, while the last one is good for long-term.

2. When not to buy

You can only make money when the price of your bag is rising, so don’t add to a losing position, unless you are accumulating at a very low price with a strong support.

And as always, don’t buy anything without a comfortable stop-loss.

3. How much to buy

Too big position size will make you sleepless, and too small position size will just wast your time. So make sure every position is in your comfortable zone.

4. How many to buy

You can’t catch every pump, you don’t need to buy everything, just trade less & run the winners ALAP.

You only need one position to take profits, so just be patient till you see that position.

If you are in several positions, try to close those that you are not sure and put the fund into the one that you are sure.

Part 2 To sell

Same as to buy, you need to decide when to sell and how many to sell.

1. When to sell

Don’t time the market after buying, don’t sell until one of the following 3 obvious signals shows up:

1.1 Shooting Star

This is the exit signal, whether the last candlestick is fixed or not, exit when you see a shooting star on daily frame.

1.2 Fast Pump

When the price is rising very fast in a very short time (such as 100% in 24H), sell before leaving the screen.

1.3 Feeling Too Good

When you are feeling too good while the chart is still looking bullish and the price is already up 100% from ATL, sell it.

2. When not to sell

When the 24H vol is over 1000 BTC, and the price stops falling, don’t sell immediately even though the bull is not on the daily chart, instead, set an auto stop-loss to sell.

When the price is falling very fast in a short time, don’t sell, sell on the pullback.

When the candle stick has not reached the upper band of BB yet, which means that the bull has not yet come yet, you still have a chance to enter.

Don’t sell until it is the biggest % gain of the day.

After all and again, the most important things are to eliminate blind hope and limit the loss.

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