Copy Trading Master’s Winning Strategies Review — Episode 77

Easy Copy, Smart Trade! Discover the winning strategies of our popular traders.

1. Copy Trading Master’s Introduction

User Nickname: Ray

Trader’s Profile: https://www.lbank.com/copy-trading/lead-trader/LBA3D77497

Trading Style: Short-term swing trading

2. Trade Operation Recap

Full position short on SOL with 25x leverage, opening price 250.62 USDT, closing price 244.74 USDT, single trade ROI +58.66%. Refer to the chart below for details.

3. Trade Review

3.1 Market Background

1) On January 15, 2025, U.S. core inflation data showed a significant cooling. December CPI rose 2.9% year-on-year, meeting expectations, while the month-on-month growth of 0.4% slightly exceeded market expectations. Core CPI grew 3.2% year-on-year, marking the first decline in six months and coming in lower than expectations and previous values, with a month-on-month increase of 0.2%. Following the release of the data, traders adjusted their expectations for the first Fed rate cut from September to July, with the total expected rate cuts for the year revised up to 40 basis points.

In addition, U.S. bank earnings exceeded expectations across the board, with JPMorgan Chase achieving record-high profits. Citigroup and Goldman Sachs also outperformed market expectations. These positive developments boosted market sentiment, with both U.S. stocks and bonds strengthening. Banking ETFs surged by more than 2.6%, and Goldman Sachs closed up 6.02%. The single-day gain in U.S. stocks was the largest since November 6 last year, the day after the U.S. presidential election.

Other macroeconomic events of interest included the unexpected drop in UK inflation to 2.5%, below the market expectation of 2.6%, which heightened expectations for a Bank of England rate cut. A Bank of England official predicted that five to six rate cuts might be needed this year, driving a 1.2% rise in UK stocks and a 16 basis point drop in the yield on 10-year UK government bonds.

Additionally, NVIDIA announced an upcoming quantum computing event, driving its stock and quantum computing concept stocks higher, with strong performance from the semiconductor sector. These multiple positive factors boosted global market confidence significantly.

2）On January 18, Donald Trump repeated a tweet on his personal X account (previously posted on Truth Social) about launching the official meme coin “TRUMP.” Within two hours of its launch, TRUMP’s market capitalization briefly reached $7.8 billion, with its FDV (fully diluted valuation) peaking at nearly $80 billion.

3）At noon on January 20 (Eastern Time), Donald Trump was sworn in as the 47th President of the United States in the Rotunda of the U.S. Capitol and delivered his inaugural address. He criticized the existing government for being long controlled by vested interest groups, resulting in a fractured society and a loss of public trust, and accused the U.S. government of incompetence in handling domestic crises.

Trump announced a series of executive orders, including declaring a national emergency at the southern border and deploying troops to curb illegal immigration; declaring a national energy emergency to abolish the Green New Deal, promote traditional energy extraction, and revive the traditional automotive industry; establishing an external tax bureau to impose tariffs on imported goods; reaffirming the recognition of only two genders; renaming the “Gulf of Mexico” to the “American Gulf”; and advancing territorial expansion and space exploration, including sending U.S. astronauts to Mars.

At the same ceremony, Vice President J.D. Vance was also sworn into office. Trump’s series of aggressive policies and statements have drawn significant attention.

4) On January 24, the Bank of Japan raised interest rates by 25 basis points to 0.50%, as expected by the market. This marks the largest rate hike in Japan in 18 years. The decision was passed with an 8–1 vote, and the bank also announced it would maintain its economic growth forecasts for fiscal years 2025 and 2026 while revising inflation forecasts upward.

In its latest Economic and Price Outlook, the Bank of Japan projected core CPI growth of 2.7% for fiscal year 2024, with inflation forecasts for 2025 and 2026 raised to 2.4% and 2.0%, respectively. The central bank attributed the inflationary support to the depreciation of the yen and rising import prices. Despite significantly negative real wage growth, the bank expressed stronger confidence in the persistence of inflation, stating that future policies would be adjusted based on economic, price, and market conditions, with further rate hikes if necessary.

Governor Kazuo Ueda’s remarks were interpreted as a key signal for the future path of monetary policy. The Bank of Japan noted that while global financial markets remain relatively stable, the economy and prices continue to face high levels of uncertainty. The bank emphasized its commitment to closely monitoring economic developments moving forward.

3.2 Trade Analysis

From January 18 to January 23, 2025, the 4-hour SOL candlestick chart showed a continuous decline from a high level to near a support level. After successfully testing the support level twice, a rebound occurred. However, the price faced resistance near a key resistance level and formed an upper shadow candlestick. The trading context is shown in the chart below.

1）On January 15, 2025, U.S. core inflation data showed significant cooling. December CPI rose 2.9% year-on-year, meeting expectations, while the month-on-month growth of 0.4% slightly exceeded market forecasts. Core CPI increased by 3.2% year-on-year, marking the first decline in six months and coming in below both expectations and the previous value, with a month-on-month rise of 0.2%. Following the release of this data, traders moved forward their expectations for the first Fed rate cut from September to July, raising the total expected rate cuts for the year to 40 basis points.

In addition, U.S. bank earnings exceeded expectations across the board. JPMorgan Chase achieved record-high profits, while Citigroup and Goldman Sachs also outperformed market expectations. This series of positive developments boosted market sentiment, with U.S. stocks and bonds both strengthening. Banking ETFs surged by more than 2.6%, and Goldman Sachs closed up 6.02%. The single-day gain in U.S. stocks was the largest since November 6 last year, the day after the U.S. presidential election.

As a result, starting January 16, BTC led a rebound in the crypto market, with BTC breaking through the $100,000 resistance level.

2）On January 18, Donald Trump repeated a tweet on his personal X account (previously posted on Truth Social) about launching the official meme coin “TRUMP.” Within two hours of its launch, TRUMP’s market capitalization briefly reached $7.8 billion, and its FDV (fully diluted valuation) peaked at nearly $80 billion. The FOMO sentiment surrounding $TRUMP led to a brief rally in SOL, pushing it to a new all-time high of $295.8. However, as $TRUMP peaked in the short term, SOL faced significant profit-taking pressure and underwent a correction.

From January 20 to January 23, the crypto market experienced a pullback due to sentiment concerns as Trump’s inauguration speech did not heavily touch on cryptocurrency policies. During this period, SOL successfully tested the $230 level twice before staging a rebound. Refer to the chart below for details.

3）During the Asian trading session on January 23, 2025, the crypto market experienced a pullback as traders closely monitored the upcoming Bank of Japan monetary policy meeting and potential remarks by Governor Kazuo Ueda.

In the morning of January 23, after missing an ideal opportunity to short near a key resistance level during the early hours, a new opportunity was sought as the price broke below a descending flag pattern.

From the chart, SOL exhibited a clear descending flag pattern on the 1-hour timeframe. Near the upper boundary of the channel, which coincided with a key resistance level tested multiple times, SOL formed a long bearish candlestick. This area was theoretically an ideal entry point for short positions due to its high risk-reward ratio and favorable win rate.

As the Asian trading session progressed, SOL quickly broke below the descending flag. Typically, a breakdown from such a pattern drives the price toward the next support level. The short-term support was expected around $246.8, while the broader support zone ranged between $235 and $242. On the 15-minute chart, a short position was initiated following the breakdown, with the stop loss set near the opening price of the bearish candlestick and the target take-profit range set between $235 and $242, yielding a risk-reward ratio greater than 3.4.

Subsequently, SOL’s rebound momentum was weak, and the price continued to decline. Considering SOL’s recent overall strength, the likelihood of reaching the lower boundary of the support zone was relatively low. Therefore, the position was closed upon entering the upper boundary of the support zone. Refer to the chart below for details.

3.3 Winning Strategies Summary

Advanced Trading: How to Improve Success Rates in Price Action Trading

Price action trading involves directly observing price charts without relying on traditional technical indicators. By focusing on market price movements and candlestick patterns, price action traders aim to understand the market’s inherent logic and the balance of supply and demand. Although this is a pure and efficient trading method, it requires traders to have heightened observation skills and adaptability. Below, we explore how multidimensional analysis and practical experience can enhance success rates in price action trading.

1) Fundamental Interpretation of Price Action

The essence of price action trading lies in understanding price movements and interpreting key candlestick patterns to assess market intentions, such as trend continuation, reversal signals, or consolidation phases.

· For individual candlesticks, the body length and the ratio of upper and lower shadows can indicate the balance of power between buyers and sellers.

· For a combination of candlesticks, observing the “consistency of highs and lows” can help identify whether the trend structure is continuing or reversing.

For example, if a certain level consistently rejects breakouts (with repeated long-shadow patterns), it often signifies that the area is a critical supply-and-demand balance point.

2) Core Elements of Price Action Signals

Accurately identifying signals is the key to success in price action trading. The following three categories of signals serve as the primary basis for analysis:

• Trend-Following Signals: In clear uptrends or downtrends, focus on continuation candlestick patterns after pullbacks, such as large-bodied bullish or bearish candlesticks or breakout formations.
• Reversal Signals: Classic patterns include hammer candlesticks, engulfing patterns, or inside bars. These signals are more reliable when they occur near key levels, such as support or resistance zones.
• Breakouts and False Breakouts: Breakouts typically indicate the market is entering a new phase, while false breakouts reveal a temporary imbalance in market forces. In price action trading, the probability of a false breakout can often be gauged by examining the position and length of candlestick shadows.

3) Risk Control and Position Management

Since price action trading involves intuitive signals and fast decision-making, robust risk management strategies are essential:

• Set Stop-Loss Levels Before Entry: Use candlestick patterns to set stop-loss points, such as a few ticks beyond the high/low of the previous signal candlestick.
• Focus on Risk-Reward Ratios: Common ratios like 1:2 or higher ensure long-term profitability in trading.
• Partial Exit Strategy: Set partial take-profit levels at key areas while protecting profits on the remaining position with trailing stop-loss orders.

4) Fundamental Principles of Price Action Trading

• Focus on Key Zones: The most valuable trading signals often appear near support and resistance levels or trendlines. Trading in these areas significantly improves success rates.
• Prioritize Trend Trading with Reversals as Secondary: Price action signals are more stable when trading with the trend, while counter-trend trades require additional confirmation.
• Combine Multiple Timeframes: Use higher timeframes (e.g., 4-hour or daily charts) to determine the primary trend direction and lower timeframes (e.g., 1-hour or 15-minute charts) to pinpoint specific entry signals.
• Avoid Chaotic Markets: When market volatility is low or price movements are erratic, price action signals are less effective, making it better to remain on the sidelines.

5) Conclusion

Price action trading emphasizes direct observation of price movements, allowing traders to avoid the distractions of excessive indicators and focus on the true dynamics of the market. While it requires experience and market sensitivity, mastering candlestick patterns, identifying key zones, and adhering to strict risk management can help traders enhance their success rates and maximize profits in volatile markets. Consistent practice and reflection are crucial, as the essence of price action trading lies in “understanding the market through the market’s own information.”

Note: Personal opinion, for reference only. Opportunities and risks abound, always do your research before investing.

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