When I first started trading, I was like a headless fly, doing everything randomly. I learned every method, studied every K-line, stayed up late every night watching the market. And the result? My account kept shrinking. Only later did I realize—complex things are not necessarily useful.

After years of live trading trial and error, I summarized 6 trading rules, each based on real experience earned with hard cash. I share them in hopes that everyone can avoid detours.

**Rule 1: The 123 Rule—Catch the Moment of Trend Reversal**

This is the foundation of my trading system, especially useful for judging when a trend will reverse. It originates from Dow Theory, but I’ve adjusted it based on the characteristics of cryptocurrencies.

The core involves three steps:

First, the price breaks through the original trendline (for example, breaking the descending trendline in a downtrend).

Second, the price pulls back but does not break the previous low (in an uptrend) or does not surpass the previous high (in a downtrend).

Third, the price again breaks through the previous high (in an uptrend) or the previous low (in a downtrend), confirming the trend reversal.

Many people fall into a trap when using this rule—ignoring volume. A true reversal will always be accompanied by increased volume. If the price breaks through but volume is ordinary, it’s likely a false signal, easy for the big players to sweep away.

My practical experience is to combine the 123 Rule with the 4-hour chart for the best results. This cycle filters out short-term market noise without missing major moves. When the 123 Rule is confirmed on the 4-hour chart, that’s when I heavily enter positions.

**Rule 2: The 2B Rule—A Key to Spotting the Main Force’s Tricks**

The 2B Rule is my most handy contrarian trading tool. It’s especially suitable for finding counter-trend opportunities amid the intense volatility of the crypto market.

Its logic is: When the price drops near a key previous low, if it doesn’t break that low but instead quickly rebounds, it indicates bullish support at the bottom. At this point, taking a contrarian long position has a good chance of success. Conversely, if the price rises near a key high but doesn’t break through and quickly falls back, it indicates bearish pressure.

The key is to identify genuine support and resistance levels. Not all highs and lows count—only those tested repeatedly with obvious volume.

**Core Ideas of Rules 3 to 6**

Besides the above two, I also summarized rules for tracking moving averages, risk management position sizing, emotional control and psychology, and market cycle-based timing. All these revolve around one core— in the high-volatility crypto market, you must seize opportunities but also control risks.

Honestly, none of these 6 rules are profound theories. They are repeatedly summarized and validated through practical experience. The crypto world changes fast, markets are crazy, but the underlying trading logic remains constant. Mastering these few rules is much more effective than blindly learning a hundred different methods.