Trader's Seven Weapons Series – Power Practice (Part 1)

Solidify Your Judgments, Layer Your Understanding

Earlier we covered discipline, belief, and love. They are the mindset, the foundation, the reason you can stand back up after a breakdown.

But that alone is not enough. You also need **power** – the concrete ability to stay steady amid market volatility, to identify signals in the noise, and to make judgments from complex information.

“Power” is not an abstract concept. It is a cognitive muscle you can train, measure, and continuously strengthen.

This article discusses four types of power: **Support Power, Comprehension Power, Learning Power, and Empathy Power**. Each comes with practical methods.

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### 1. Support Power: Your Technical Bottom Line

Support power is not about stubbornly holding. It means knowing what levels you can see, what volatility you can withstand.

It is the boundary you draw before opening a position, the rational judgment basis that keeps you calm when markets swing violently.

**Practical Configuration of Technical Indicators**

Below are core indicator tools every trader should master and consistently use:

**Moving Averages (MA)**
- MA20: Short-term trend line, judges the strength of short-term direction.
- MA60: Medium-term lifeline. If the price breaks below and fails to recover for more than three days, the trend may have reversed.
- MA120/200: Long-term bull/bear dividing line. Price above MA200 indicates a long-term bullish pattern; below MA200 warns of weakening long-term trend.

**Bollinger Bands**
- When price touches the lower band and the bands widen, it may enter oversold territory; touching the upper band with widening may signal overbought territory.
- When Bollinger Bands narrow, it often means a directional breakout is approaching – heavy positions should be avoided beforehand.

**Relative Strength Index (RSI)**
- RSI ≥ 70: Overbought zone, not suitable for chasing longs.
- RSI ≤ 30: Oversold zone, not suitable for chasing shorts.
- RSI between 30 and 70: Normal volatility range, trade in trend direction.
- Watch for divergence: price making new lows but RSI not → potential bottom reversal; price making new highs but RSI not → potential top reversal.

**Volume**
- Breakout of important MA or resistance with high volume → signal is more reliable.
- Rebound with low volume → likely a technical retracement, not a trend reversal.
- High volume decline followed by low volume consolidation → selling pressure is exhausting, place under observation.

**MACD**
- MACD golden cross (DIF crossing above DEA) + above zero line → bullish signal confirmed.
- MACD death cross (DIF crossing below DEA) + below zero line → bearish signal confirmed.
- Histogram bars turning from negative to positive or vice versa is an early signal of direction change.

**Fibonacci Retracement**
- In a clear uptrend or downtrend, focus on retracement levels 0.382, 0.5, 0.618.
- 0.618 is typically the limit for strong pullbacks. If price breaks below 0.618 and fails to recover, the original trend may be over.

**Volume Profile**
- High-volume nodes often form support or resistance.
- When price is above a high-volume node, that node becomes support; when price breaks below, it becomes resistance.

**ATR (Average True Range)**
- Use for dynamic stop-loss: stop distance = key support/resistance ± N * ATR.
- Widen stops when ATR is high, tighten when ATR is low. ATR itself does not give direction, but it tells you “how volatile the market is right now” so you can adjust position size and stop width accordingly.

**Support Power Practice Checklist**
- What is the current price position relative to MA20, MA60, MA120?
- Is it near the upper, lower, or middle Bollinger Band?
- Is RSI at extreme values?
- Does recent volume confirm the price direction?
- Is MACD histogram direction aligned with price direction?
- What is the price position relative to key Fibonacci retracement levels?
- Is the price above or below high-volume nodes?
- Is ATR at a recent high or low?

Before opening a position, confirm that at least 4 of the above indicators point in the same direction – this is the minimum threshold for your support power.

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### 2. Comprehension Power: The Ability to Dissect Information

Every day, the market floods you with countless pieces of information. 90% is noise, 9% is useless data, and less than 1% truly affects price direction. Comprehension power is the ability to identify that 1% and correctly judge its impact on the market – both direction and magnitude.

**Daily Training Methods for Comprehension Power**

**Daily Information Deconstruction Exercise**
- Choose 3 market news items each day and break them down: What type of information is this? Policy? Fundamentals? Capital flows? Sentiment? Which assets will it affect? What is the direction of impact? Is the impact short-term or long-term?
- Continue for 21 days. After 21 days, you will find your perspective on news has completely changed.

**Reverse Reading Training**
- After reading an extremely bullish analysis article, force yourself to write down three reasons why the analysis could fail.
- After reading an extremely bearish analysis, force yourself to write down three reasons why it could fail.
- The purpose of this training is not to make you “neutral,” but to build immunity to single narratives.

**Historical Replay Comparison**
- When you form a judgment on certain information, record it first, including your judgment, basis, and expected market reaction.
- One week later, check back: How did the market actually move? Where were you right, and where were you wrong?
- The core value of this exercise is not “improving accuracy,” but “building a catalog of your own judgment biases” – knowing the types of information where you are more likely to make mistakes is more valuable than knowing those where you are more likely to be right.

Unlike other traders who give vague bullish/bearish predictions, if you haven’t followed me, you haven’t seen my previous analysis – I directly stated the outcomes for Bitcoin and Ethereum.

In fact, technical analysis boils down to one sentence: **a trending market is just a series of oscillations**. If you can realize this, you will definitely become an excellent trader.

For example, “sell the rally” is a trending market. One day, if Bitcoin really plunges to $50k or $40k, the Fed starts cutting rates, wars stop, tariffs drop… then macro bullishness arrives, and it becomes “buy the dip.”

So Ethereum will likely remain below $2,500 this year, and Bitcoin will oscillate below $90k.

Brother Bower said Bitcoin will definitely break $150,000 this year. That depends on whether Bitcoin can break $100,000 in September; otherwise, I am bearish.

Finally, I encourage everyone to buy spot. I recommend holding LINK, AAVE, RENDER, FET, etc., but do not trade them speculatively.