Recently, a friend asked me about my trading strategy, so I decided to explain this logic thoroughly. Actually, the core contradiction in trading lies here — everyone looks at different chart timeframes, and naturally, their psychological expectations for the market vary greatly.

Take this recent trade as an example. The market movement was entirely within the predicted range, consistent with the logic of a certain coin’s performance yesterday: the central zone expanded, consolidated divergence occurred, followed by a pullback. After this pullback ends, there’s a high probability that the price will re-enter the central zone, with an initial target around 0.14.

Speaking of stop-loss, this is the most testing part of human nature. I set my stop-loss at 0.13, not randomly chosen, but based on an absolute defensive position in technical analysis. This method has an astonishing success rate in traditional markets and works just as well in the crypto space. Let’s review my recent dozen or so trades: aside from those where I moved the stop-loss with the market to break even, how many were actually stopped out? The results speak for themselves.

When building or adding to a position, I strictly control risk around this defensive level. For example, in this trade, if I were truly stopped out, the overall account drawdown would be about 46%. I can accept this because I’ve built my capital from small to large over time, and risk is always within my control.

Regarding the previous trade that was stopped out but still remained profitable — some might ask why I didn’t exit earlier or move the stop-loss lower. Honestly, the true boundary of the market can only be seen after it has played out. If I didn’t exit at the highest point, it’s because, at my trading level, that move still didn’t reach the exit signal. Being stopped out is definitely uncomfortable — watching profits shrink in real-time. But that’s the price of operating at this level. Trading has no perfect answer, only a rhythm that suits oneself.