Recently, I often see people discussing ATH during trading, so I took some time to research and want to share some insights with everyone.

Actually, ATH is short for All Time High, simply meaning the highest price an asset has reached since it started trading. This is not just a number, but also represents the market's confidence in this asset reaching its peak. Many beginners get excited when they see ATH appear, but I found that this is often when the biggest pitfalls occur.

I have made this mistake before. When cryptocurrencies hit ATH, I thought it was a buy signal, but ended up getting trapped. Later, I realized that market sentiment during ATH periods is completely different. Although buying pressure is strong at this time, the risks also increase. It may seem like there is no supply pressure, but in reality, there are hidden risks of large-scale selling. Many traders rely on intuition at this point, which often leads to undesirable results.

So, what is the correct approach when ATH appears? I’ve learned a few practical techniques. First, use tools like Fibonacci retracements and moving averages for analysis. Common Fibonacci ratios like 23.6%, 38.2%, 50%, 61.8% often serve as support and resistance levels on charts. Moving averages help determine trend direction; if the price is above the moving average, it’s usually an uptrend, and vice versa.

The price breaking through resistance to reach ATH generally occurs in three stages. The first stage is “Action,” where the price breaks resistance with high trading volume. The second stage, “Reaction,” sees momentum weaken, buying pressure decrease, and often a retracement occurs. The final “Resolution” stage determines whether this breakout can truly sustain. I now carefully observe these three stages, especially near ATH.

Identifying candlestick patterns below the breakout point is also important; rounded or rectangular bottoms can confirm the breakout trend. Then, use Fibonacci from the lowest point to the breakout point to identify new resistance levels, such as 1.270, 1.618, 2.000, which are worth paying attention to.

In actual trading, I set profit targets and stop-loss levels first. The risk-reward ratio must be favorable before adding to positions, and I only increase my position when the price is supported by the moving average. This significantly reduces the risk when trading near ATH.

When your asset truly reaches ATH, what should you do next? It depends on your trading style. If you are a long-term investor with confidence, you can choose to hold everything, but only if you confirm that this ATH is not a short-term bubble. Most people opt to take partial profits, using Fibonacci extensions to measure psychological resistance levels. Others sell everything when Fibonacci extensions coincide with the ATH price, which usually indicates that the upward trend may be ending.

Honestly, ATH is a double-edged sword. It represents market enthusiasm and asset value, but also hides significant risks. The key is to use the right tools and strategies to respond. Now, I tend to be more cautious when encountering ATH, no longer trading on intuition. If you’ve also traded near ATH, feel free to share your experiences and thoughts.