Retail investors enter the crypto space, and most people only focus on price movements, unaware that trading volume is the key to revealing the true market picture. Honestly, volume is like a person's heartbeat; understanding its rhythm is the real entry point. Most losses happen because traders fail to read volume properly.

Let's start with the most basic rule—don't just watch price fluctuations. Why? Because price is only a surface phenomenon; the real capital flow is hidden in trading volume. When the price rises, is it institutions accumulating, or retail investors chasing the high? When it falls, is it the main force shaking out weak hands, or is a genuine bear market coming? The answer becomes clear when looking at volume. The difference between a false rally and a real surge often hinges on a single word: volume.

Next, many people fall into this trap: after a sharp price spike, it begins to slowly decline, and panic sets in. Actually, there's no need to rush; this is often when the main force is quietly accumulating. But the real trap is another scenario—when trading volume suddenly surges, followed by a huge bearish candle, that’s a danger signal. This pattern is called "bait and switch," where it looks like a rebound is coming, but in reality, it’s trapping those rushing in to buy the dip.

After a flash crash, the price gradually climbs again, and this is when most are easily fooled. Many think the market is reborn, but in fact, this is the final stage of the main force offloading. The market punishes those who think "it can’t fall anymore." Sometimes, buying the dip halfway up is more painful than chasing a high, because you think you've found the bottom, only for prices to keep dropping.

The coordination between volume and price is very particular. During an uptrend, strong volume indicates market enthusiasm and consensus. Once the volume shrinks and the price consolidates, it’s a prelude to a sharp decline. Don’t hold onto the hope of a rebound. Increasing volume doesn’t necessarily mean a top, but decreasing volume is definitely a warning sign.

Don’t impulsively buy when volume hits bottom. A single day of huge volume might be a false move; a genuine reversal requires sustained high volume during consolidation. At this point, the best approach is to slow down, observe carefully, and determine whether this is truly the bottom.

Ultimately, trading isn’t about candlestick charts; it’s about human psychology. Volume reflects market consensus, while price is just an emotional surface. If you can read the greed and fear behind volume, you can accurately gauge market rhythm instead of being led by it.

The most difficult yet most profitable principle is the highest level of trading—"Wu Wei" (non-action). Not greedy, not fearful, not impatient—these three seem simple but are the hardest to master. Being able to hold cash and wait for real opportunities, and acting decisively when signals are clear—that’s true winning. Not being swayed by market ups and downs ensures longevity.

Mastering these 7 principles will elevate your trading skills beyond most retail investors. To stay steady in the crypto world, these fundamentals are your foundation.