Brothers, last night I said I would teach everyone how to see 'contraction explosion', and this morning I had a practical experience on PIPPIN, it was simply 'thrilling'.
I originally wanted to catch a bottom rebound, and I did catch the bottom, with a peak profit of 14%. However, just because I hesitated for a minute, the profit was swallowed up by fluctuations in just a few seconds, and in the end, I could only leave with a small profit.
Reviewing this 1-hour chart of PIPPIN (see above), I summarized several 'life-saving' advanced points in practical trading:
1. The 'downward opening' after a contraction is the most deadly.
You see, before the crash on PIPPIN, the Bollinger Bands contracted very narrowly (this is called 'death contraction'). Once the price breaks below the purple lower band, and the lower band opens vertically downwards like a waterfall, this indicates an extremely weak opening.
Lesson: Bottom fishing in such a weak trend is like catching flying knives with bare hands; a rebound is often just a brief flash.
2. Why does your profit evaporate in an instant?
In high-volatility cryptocurrencies, the 'width of the opening' of the Bollinger Bands represents the risk.
When the bands are stretched like a giant trumpet (refer to the latest position in the chart), every 15-minute candlestick's fluctuation could be over 10%.
Practical conclusion: In this market, a profit of 10%-15% is a reward from heaven. If the trading volume (the red bars below) starts to shrink, or if the rebound touches the pink middle band (MB) and fails to break through, don’t hesitate – just run!
3. Advanced Technique: Dynamic stop-loss is your 'bulletproof vest.'
The only thing I did right this time was to dynamically raise the stop-loss level.
Now that we have learned to look at the Bollinger Bands, don’t fixate on a single price level for stop-loss. When the price rebounds, move the stop-loss to the pink middle band of the 15-minute chart or just a bit above your entry point. Even if you eventually get stopped out, at least you won't lose money.
Today's practical summary:
In contracts, precision is a skill, and speed is an art.
A contraction indicates an explosion, but the 'greed' after the explosion will make you lose your capital. In the face of high volatility in cryptocurrencies, be a ruthless trader; doubling profits is not a dream.
Tomorrow's content is even more explosive: I will combine the practical data from this PIPPIN to discuss how to use the 'divergence' of Bollinger Bands and MACD to see through the false breakthroughs of the market makers at a glance. Brothers who want to see the actual trading points, let's hear from you in the comments!