Insights on Trading in a Unilateral Market: Flow with the Trend Like Water
(No indicators, purely practical experience sharing)
1. How to Identify a Unilateral Market?
1. Observe Price Action:
Unilateral Uptrend: Prices rise like climbing stairs, with each high point continuously elevated, and low points not breaking previous lows; each pullback is brief, sometimes sideways instead of down.
Unilateral Downtrend: Prices fall like descending stairs, with low points constantly refreshed, rebounds unable to break previous highs, and quickly crushed after a rebound.
2. Feel the Market Sentiment:
During an uptrend, retail investors start shouting "the bull is here," ignoring negative news;
During a downtrend, the market is filled with pessimism, and even good news is not believed.
2. What to Do in a Unilateral Uptrend?
Core mantra: “Buy on Divergence, Sell on Consensus”
1. Follow the Trend on First Acceleration:
When prices suddenly break through previous highs with increased volume (for example, Bitcoin breaking a key integer level), and the pullback does not break, enter directly.
Experience: Hesitation leads to defeat, but don’t take too heavy a position (within 30%).
2. Pullbacks are Money-Making Opportunities:
If the rise is too fast and a brief pullback occurs (for example, dropping back near the starting point), and volume shrinks, decisively increase your position.
Taboo: Don’t wait for “the drop to the right level”; the market won’t give you comfortable prices.
3. When to Exit?:
When everyone in the market is frantically calling for buys, and media headlines are all about skyrocketing prices, start reducing your position in batches;
If prices fail to make new highs for three consecutive days, exit completely.
3. What to Do in a Unilateral Downtrend?
Core mantra: “Don’t Catch Falling Knives, Just Wait for Rebounds”
1. Early Downtrend: Avoid All Bottom Fishing:
Once prices break key support, every rebound is an escape opportunity, not an entry signal.
Experience: In a downtrend, “cheap” is just a trap; there’s a basement below the floor.
2. Shorting on Rebounds:
Wait for prices to rebound to the starting point of the previous drop (for example, from 10,000 to 8,000, rebounding to around 9,000), and if the rebound fails to break through, short directly.
Tip: Observe the volume during the rebound; a shrinking volume rebound = shorting signal.
3. When to Cover Shorts?:
When prices fail to make new lows for two consecutive days and a long lower shadow appears, cover half of your short positions;
If there’s a sudden increase in volume and it breaks the previous day’s high, exit all positions.
4. Survival Rules in a Unilateral Market
1. Position Management:
In a unilateral uptrend (long-term rolling positions): The initial position should not exceed 10%, and total position during pullbacks should not exceed 30%;
In a unilateral downtrend (long-term rolling positions): Same as above
(Note: Short-term traders can close positions anytime as long as they meet their psychological target price.)
2. Stop-Loss Iron Rule:
In an uptrend, stop-loss if it breaks the previous day’s low;
In a downtrend, stop-loss if it breaks the previous day’s high.
3. Emotional Resistance:
When others are greedy during an uptrend, stay clear-headed;
When others are fearful during a downtrend, remain patient.
5. One Last Honest Word
A unilateral market is the most “generous” period in the market, but most people lose money because:
During an uptrend, they always want to wait for “a little drop to buy,” and end up waiting as prices rise higher;
During a downtrend, they always want to “catch a bottom,” and end up catching lower and lower.
Remember: Trends don’t happen every day; when they come, hold on tightly, and if you miss it, wait for the next one.
(Note: The above is a summary of personal experience, not absolutely correct, and should be adjusted according to one’s own personality.)
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