Lesson Eleven

Yibo's crypto host shares valuable knowledge—keep it for later review.

How to use multiple “technical tools” (also known as technical indicators) together to judge buy and sell timing. The core is “indicator resonance”—simply put, when multiple tools give the same signal, the trading becomes more reliable and reduces errors. First, let’s clarify the basics:

Overbought: After a period of price increase, too many buyers push the price artificially high, possibly leading to a pullback (drop);

Oversold: After a price decline, too many sellers push the price low, possibly leading to a rebound (rise);

Resonance: For example, common indicators like RSI, KDJ, MACD, if they all signal “buy” or “sell” simultaneously, the signal is more accurate—much more reliable than relying on a single indicator.

Next, I’ll introduce how to use some common “technical tools”:

RSI (Relative Strength Index): Values above 70 indicate overbought, below 20 indicate oversold. Comparing values across different timeframes (like 15 minutes, 4 hours, 1 day) can reveal short-term fluctuations versus long-term trends;

KDJ (Stochastic Indicator): Crossovers of its two lines generate buy or sell signals. It also has overbought and oversold zones, and parameters can be adjusted based on the coin’s volatility;

MACD (Moving Average Convergence Divergence): Uses line crossovers and “divergence” from price (e.g., price rising but indicator not) to judge trend direction. Using different periods together makes it more accurate.

Now, the key part: “How to find reliable signals”:

Don’t rely on just one indicator. For example, if MACD signals a buy, also check if RSI is rebounding from oversold, and if volume is increasing (more buyers really entering);

Ensure consistency across different timeframes. For instance, if both daily and 4-hour charts show bullish signals, it’s more robust—avoiding situations where one says up and another says down;

Also, filter out “false signals,” such as using volatility indicators to assess if the market is too quiet, preventing being fooled by short-term fluctuations.

Next, how to operate in actual trading:

Entry timing: Multiple indicators should meet criteria (e.g., MACD golden cross + RSI rebound + price breaking key levels). Also consider volume and market sentiment (are traders too greedy or too fearful?);

Position sizing and risk control: Don’t invest all your funds at once. Adjust your buy-in proportion based on signal strength. Set “stop-loss” levels (sell when losses reach a certain point—avoid excessive losses). Be cautious with leverage;

Exit timing: Take profits gradually when targets are reached. If indicators show opposite signals (e.g., price should rise but indicators suggest decline), reduce or close positions promptly.

Finally, examples: For instance, when Bitcoin breaks above a moving average and MACD also shows a golden cross, it’s a buy signal; when Litecoin hits a bottom with increased volume and KDJ indicates oversold, you can build positions gradually. Also, avoid common mistakes like relying on a single indicator, changing parameters arbitrarily, ignoring market news. Regularly optimize your strategy by backtesting with historical data and considering other market factors.

Overall, the core principle is “don’t put all your eggs in one basket.” Use multiple technical indicators for mutual verification, combine with market conditions and risk management to improve your success rate in crypto trading and avoid pitfalls.