Understanding the emotions behind K-lines means you understand the market.
The story of my friend Xiao Lin (a pseudonym) might give you some insights. Three years ago, she worked three jobs every day to support her boyfriend while he pursued his master's degree, saving every penny for his future. Who knew that after her boyfriend became successful, he would only leave her with the words 'I no longer love you.' At that moment, she felt like a clown, and the three years of youth and effort seemed to have turned into a joke.
When she found me with red eyes, I had already been struggling in the cryptocurrency world for seven years. She didn’t have much capital, only ten thousand yuan saved from working, but there was a determination in her eyes that showed she was all in. 'Take me to trade cryptocurrencies,' she said, 'I will do whatever you say.'
I didn't promise her big gains, I just told her: 'The cryptocurrency market specializes in treating all kinds of discontent but can also reward those who are patient. If you are truly willing to listen and follow, I will share my trading insights with you.'
A month later, her ten thousand turned into one hundred twenty thousand. It wasn't because she was lucky, but because she strictly followed the six trading principles I gave her.
Volume is the compass for direction.
Price fluctuations are just the surface; trading volume is the truth. When prices rise rapidly but pull back slowly, it is mostly the main force quietly accumulating. A sudden large bearish candle after a rapid rise often marks the beginning of the harvest. The first indicator I taught Xiaolin was volume; she learned to follow up during volume breakouts and to observe during low volume consolidations.
A sharp drop followed by a rebound is a trap, not an opportunity.
When prices flash crash, many people think about bottom fishing. But I told Xiaolin that the sharper the decline, the more false the rebound. Especially during the main force's selling phase, any rebound is a trap to attract buyers. She has often resisted the urge to enter during sharp declines. As a result, those coins later dropped even further.
Consolidation at high levels with low volume is more dangerous than high volume.
Most people believe that high volume at the top is a dangerous signal, but I have found that long-term low volume consolidation at high levels is the real risk. This means that the main force has already left the market, and what's left are just retail investors competing. Xiaolin learned to decisively exit when this signal appeared, avoiding multiple large drawdowns.
Confirming a bottom requires two volume signals.
Bottom fishing is not about guessing the bottom. A single volume surge is not enough to determine a trend reversal; a real bottom requires a breakout after low volume consolidation. I taught Xiaolin to patiently wait for a second confirmation to avoid bottom fishing midway up. This habit allowed her to buy several times just before the market started.
The K-line is the result, while volume is the language.
Behind every K-line is the emotional game between bulls and bears. Low volume indicates a lukewarm market, while high volume represents capital inflow. Understanding volume changes is to understand the emotional fluctuations of the market. Xiaolin gradually grasped the main force's trading methods by observing volume changes.
Mindset determines success or failure; staying in cash is also a form of trading.
Finally, I told Xiaolin the most important rule: only those who dare to stay in cash are the real experts. Do not chase high prices out of greed, do not cut losses out of fear, and do not hold on stubbornly. In the cryptocurrency market, opportunities always exist; what is lacking is not opportunities, but patience to wait for them and the ability to seize them.
Xiaolin's success is not accidental; it is because she strictly followed these rules. In just one month, from ten thousand to one hundred twenty thousand, she proved that a good mindset combined with the right methods is the key to long-term survival in the cryptocurrency market.
Of course, I also reminded her that there are no guaranteed profitable trades in the cryptocurrency market; these principles only improve the win rate, and risk control must always come first.
In today's cryptocurrency world, there are still many opportunities, but most people don't lose to the market, they lose to their own mindset. When you can maintain a calm mindset and strictly execute your trading plan, you have already surpassed 90% of the participants.
I hope Xiaolin's story and these principles inspire you. On this road in the cryptocurrency world, we all need to continually learn and evolve. Feel free to share your trading insights in the comments; let's find certainty amidst the volatility together.
