Hello everyone, I am trader Gege. Following the previous article, the beginning of recent articles will discuss the essence of trading and how to trade well, hoping to be helpful. Today, let's talk about the source of returns from trading, and may your trading be calm!

The development of trends is similar to everything else, and it will inevitably conform to natural laws, from disorder to order and back to disorder. The most important thing is the trend that brings us substantial returns, which does not appear out of thin air, but starts from small trends and gradually extends to large trends.

This corresponds to the transition from small cycles to large cycles. Starting from the smallest cycle, the market's combined force will gradually accumulate energy towards long or short positions, inevitably leading to oscillations caused by mutual games during this period.

However, since traders intervene from the smallest cycle, their risk control logic must also be very small to match. When the market's combined force makes a choice in the smallest cycle, this force will inevitably continue to the next cycle. At this moment, what traders need to focus on is the feedback brought by the combined force of the current cycle, and they need to ignore the oscillations of the previous cycle.

Trading is really not that complicated. If it's right, hold on to it; if it's wrong, cut the position, and then endure the long-term torment brought by the disorderly market, but the premise is that your method and logic are correct.

You need to understand where the substantial returns come from. They are definitely not obtained by heavy positions or by flipping coins.

A perfect risk control system corresponds to a perfect asset management system, which can give you a good feedback as long as you strictly adhere to the discipline one day. However, until you completely close the position, you cannot determine whether this trade will bring you substantial returns, because the market has not finished, and your logic has not finished either.

When it comes to choosing cycles, we cannot use predictive thinking to deal with the market, because we can never be sure whether the direction you are entering at the moment is the turning point of the large cycle you mentioned.

When the smallest cycle gives you a direction, if you intervene according to discipline, then the impact of the larger cycle on your current cycle is only one thing, which is to form pressure or support. However, you cannot be sure that this pressure or support is stable, as this is just a probability event.

If this pressure or support is effective, it will lead to one consequence, which is that you will be stopped out. So, according to the risk control conditions of the current cycle, you should exit.

Subsequently, if this pressure or support is effective, it will definitely provide you with an entry opportunity in the smallest cycle that is in the same direction as the large cycle, so you can enter again. And if this pressure or support is ineffective, you should continue to follow the discipline and wait for the next cycle.

So, after this series of operations, do you think the large cycle will definitely continue to decline just because it started that way? Your logic was wrong from the beginning, and you are still using predictive thinking to face the market. In this chaotic market, we are all "blind" and the only thing we can do is to follow the channels dug out by the market, slowly moving forward, and these channels are the candlesticks.

Do not dig the channels before the market does, because you simply cannot.

Returning to the market, today is Monday. As usual, let's first look at the weekly chart of Bitcoin. The candlestick formed a bullish engulfing pattern, and the focus of this week is whether the market can stand above the 7-day moving average. After the daily chart recovered from the decline at the end of last month, it was resisted around 65,500 and retraced. The important position still needs to pay attention to the 60-day moving average. If it can break through and stabilize in the future, it will continue to test the resistance around 69,000-70,000. Our long position trend at the 57,600 level, after adding positions in line with the trend, has also completed profit-taking. Currently, we are waiting for the market to move up and then adjust our defense. It is certain that this trade will make a profit, it's just a matter of how much. Therefore, this trade is considered very successful because there is currently no risk.

On the 4-hour chart, the current decline is also considered as repairing the bearish divergence of the MACD histogram. If the oscillation continues, it will continue to test higher after the repair is completed. If it continues to decline, as long as it does not break 60,000, the bull side will not have a big problem, it's just that the oscillation period will be longer. The market sentiment is currently quite chaotic, because from the current low point, the washout is not thorough enough, the price does not make people feel painful enough to want to cut losses, which means the washout is not thorough. However, the blood-stained chips are not easy to pick up, and institutions will not allow very low chips to appear.

So, it's a bit contradictory now, but we won't dwell on this. Let's watch the market as it goes, there will always be opportunities. In the short term, as long as it does not fall below the 62,000-61,500 level, the bull side will not have a big problem. It is recommended to enter long on a pullback to the 62,000-61,500 level in the short term. The small trend is targeting 66,000-67,000, and if it can break through and stabilize, look at the 69,000-70,000 level. More real-time advice will be sent internally. This article ends here today, see you next time. For more real-time advice, find Gege. Suggestions are for reference only, manage your risk when entering the market, and determine profit and stop-loss levels on your own. Specific strategies should be consulted based on real-time market conditions.

By/Trader Gege, a friend willing to accompany you on the road to recovery.

Many individual investors are unable to enter the trading door, often simply because they lack a guide. The problems you ponder over can often be easily solved with a single piece of advice from an experienced person. Daily real-time analysis of BTC, ETH, BCH, LTC, EOS, XRP, DOT and other currencies is publicly available in the circle of friends, and there is also guidance in the experience exchange group. Real-time market analysis and operation guidance are available 18 hours a day, welcome to scan and add for real-time guidance. Note! The contact information below does not belong to me!

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