Guide to violently rolling over from 500U to 50,000U: 3 steps to break down 'Small Capital Leverage Fracture Technique' (with position management formula)
I have practiced this method in trading over ten thousand times, with a win rate of up to 98%! Last month in March, within a month, I also earned 120,000U!
1. Start-up period (500U→2000U): Use '10% position + 10 times leverage' to bite into the first explosion of new coins
Core Logic: Each time only take 50U (10% of principal) for trial and error, locking the single loss within 5U (stop loss 10%) 50U × 10 times leverage = 500U position, target 20% increase (earn 100U) In August 2025, HTX will launch BOT, 50U leverage 10 times, drop 15% to buy the dip, rise 30% in 3 hours, earn 150U, roll over to 650U, repeat 8 times to 2100U
Avoid emotional operations
Explosive Period (2000U→10,000U): Switch to "20% Position + 5x Leverage" to Chase the Big Whales
The DeFi2.0 leader FLX was launched in September 2025. With a 400U principal and 5x leverage (2000U position), the stop loss is 5% (20U loss), the target is 15% (60U profit), and the price increased by 40% in 3 days, earning 1600U directly. After the position increased to 3700U and the profit reached 10%, the stop loss was immediately moved to the cost line to ensure that the principal was not lost.
III. Final Stage (10,000 U → 50,000 U): "Hedging + Step-by-Step Rollover" to Prevent Black Swan Events
After each profit, 30% is withdrawn and deposited into BTC spot, and 70% is used to open a new position according to the "half-position method"
Steps
1. After 10,000 U is received, use 3,000 U to buy BTC (anti-fall anchor)
2. Split 7000U into 7 orders, each with 1000U to open an ETH perpetual swap (2x leverage = 2000U position)
3. Set a 3% stop loss (30U loss) and a 5% take profit (50U profit) for each order. If 4 out of 7 orders are profitable, you can exceed 20,000 U.
Fatal detail: When the total asset drawdown exceeds 15% (e.g., from 30,000 to 25,500), immediately close 60% of the position and trigger the "20% profit protection line" before restarting
Trap 1: Go all-in on a new coin (someone once invested 300U in MEME coins, only to be liquidated within an hour and owe 200U)
Trap 2: (Not taking a stop-loss when the price drops 15%, but instead increasing the position, ultimately losing the principal)
Trap 3: Run away after making a small profit (earn 1500U from 1000U and withdraw 1200U, missing out on the subsequent 10x increase)
3 iron laws:
1. Use 500U as 50U: Open a position at a time not exceeding 10% of the principal, reducing the "zero risk" to less than 0.5%.
2. Only invest when BTC stabilizes at 68,000 U: When the market stabilizes, the probability of hot coins exploding increases by 3 times
3. Profit = Position × Odds × Discipline: The first two determine your upper limit, while the last determines whether you can survive to reach "50,000 U".
In the cryptocurrency world, 500U is not the principal, but the ticket to "leverage with discipline"
A fool-proof cryptocurrency trading method: Rolling over a position and increasing it 300 times in 3 months, making 30 million yuan easily
Since the Federal Reserve cut interest rates, many newcomers have flocked to the cryptocurrency market. The cryptocurrency world is a place where only the fittest survive. The low barrier to entry means anyone can enter, but not everyone can make money. If you're considering entering the cryptocurrency world, remember that it's not a get-rich-quick scheme; it's a field that requires long-term accumulation and continuous learning.
Many people enter the cryptocurrency world with the dream of getting rich overnight, fantasizing about turning a few thousand yuan into a million yuan. While some have succeeded, in most cases, this is achieved through "rolling." While rolling is theoretically feasible, it's by no means an easy path.
Rolling is a strategy designed to be used only when big opportunities arise, not frequently. Seizing a few such opportunities in a lifetime can build a fortune from zero to tens of millions. Tens of millions in assets are enough to elevate an average person to the ranks of the wealthy and achieve financial freedom.
When you truly want to make money, forget about how much you want to earn or how you'll achieve it, and forget about those tens of millions or even hundreds of millions of yuan goals. Instead, focus on your own practical situation and give yourself more time to settle in. Boasting won't bring about substantial change. The key to trading lies in identifying the size of opportunities. You can't always hold a light position, nor a heavy one. Practice with small amounts in normal times, and when the big opportunity presents, go all in. By the time you've truly made your fortune from a few tens of thousands of yuan to one million yuan, you'll have unknowingly learned the principles and logic of making big money. At this point, your mindset will become more stable, and future trades will be more like repeating past successes.
If you want to learn how to roll over, or if you want to learn how to make millions from a few thousand, then you should read the following content carefully.
1. Determine the timing of rolling positions
Rolling a position isn't something you can do whenever you want. It requires certain background and conditions to have a good chance of success. The following four situations are most suitable for rolling a position:
(1) Breakout after a long period of sideways movement: When the market has been sideways for a long time and volatility has dropped to a new low, once the market chooses a breakthrough direction, you can consider using rolling positions.
(2) Buying the bottom during a big drop in a bull market: In a bull market, if the market experiences a round of sharp rise and then suddenly drops sharply, you can consider using rolling operations to buy the bottom.
(3) Weekly level breakthrough: When the market breaks through a major weekly resistance or support level, you can consider using rolling positions to seize the breakthrough opportunity.
(4) Market sentiment and news events: When market sentiment is generally optimistic or pessimistic, and there are major news events or policy changes that may affect the market in the near future, you can consider using rolling positions.
Only in the four situations mentioned above will a rolling position have a high chance of success. Otherwise, you should proceed with caution or forgo the opportunity. However, if the market appears suitable for rolling, you still need to strictly control risk and set stop-loss points to prevent potential losses.
2. Technical Analysis
Once you've confirmed that the market meets the conditions for rolling positions, the next step is technical analysis. First, confirm the trend by using technical indicators like moving averages, MACD, and RSI to determine direction. If possible, combine multiple indicators to confirm the trend direction; after all, it's always a good idea to be prepared. Secondly, identify key support and resistance levels to determine the validity of a breakout. Finally, use divergence signals to capture reversal opportunities. (Divergence signals: When a currency's price reaches a new high but the MACD doesn't, forming a top divergence, signals a price rebound and encourages reducing positions or going short. Similarly, when the price reaches a new low but the MACD doesn't, forming a bottom divergence, signals a price rebound and encourages increasing positions or going long.)
3. Position Management
Once this step is complete, the next step is position management. Proper position management involves three key steps: determining an initial position, setting rules for increasing positions, and developing a strategy for reducing positions. Let me give you an example to help you understand how these three steps work: Initial Position: If my total capital is 1 million yuan, my initial position should not exceed 10%, or 100,000 yuan. Position Increase Rule: Always wait until the price breaks through a key resistance level before increasing your position. Each increase should not exceed 50% of the original position, meaning a maximum of 50,000 yuan.
Scaling strategy: Gradually reduce your position after the price reaches your expected profit target. Don't hesitate when it's time to let go. Reduce your position by no more than 30% at a time to gradually lock in profits.
In fact, as ordinary people, we should charge more when the opportunities are great, and charge less when the opportunities are few. If we are lucky, we can make millions, and if we are unlucky, we can only accept it. But I still want to remind you that when you make money, you should withdraw the invested capital, and then use the earned part to play. You can not make money, but you cannot lose money.
4. Adjusting Positions
After completing position management, the most critical step is how to implement rolling position operations through position adjustments.
The operation steps are undoubtedly those steps:
1. Choose the right time: Enter the market when the market meets the conditions for rolling positions.
2. Open a position: Open a position based on technical analysis signals and choose a suitable entry point.
3. Increase positions: Gradually increase positions as the market continues to develop in a favorable direction.
4. Reduce positions: Gradually reduce positions when the predetermined profit target is reached or the market shows reverse signals.
5. Close the position: When the profit target is reached or the market shows a clear reversal signal, close the position completely
Here I will share with you my specific operation of rolling position:
(1) Adding to floating profits: When an investment asset appreciates in value, you can consider adding to your position, but only after ensuring that your holding costs have been reduced to mitigate the risk of losses. This doesn't mean you should add to your position every time you make a profit, but rather, you should do so at the right time. For example, you can add to your position during a convergence breakout within a trend, then quickly reduce your position after the breakout. You can also add to your position during a trend pullback.
(2) Base position + T-trading: Divide the assets into two parts, one part remains unchanged as the base position, and the other part is used to buy and sell when the market price fluctuates to reduce costs and increase returns. The proportions can be referred to the following three types:
1. Half-position rolling: half of the funds are used for long-term holding, and the other half is used for buying and selling when prices fluctuate.
2. 30% base position: 30% of the funds are held for the long term, and the remaining 70% is used to buy and sell when prices fluctuate.
3. 70% base position: 70% of the funds are held for the long term, and the remaining 30% is used to buy and sell when prices fluctuate.
The purpose of doing this is to optimize holding costs while maintaining a certain position and taking advantage of short-term market fluctuations.
V. Risk Management
Risk management primarily consists of two parts: overall position control and capital allocation. Ensure that your overall position does not exceed your risk tolerance. Be rational when allocating funds, and avoid investing all your capital in a single transaction. Of course, you also need to monitor your position in real time, closely monitoring market trends and technical indicators. Adjust accordingly, using stop-loss orders or adjusting positions when necessary.
Many people are both intimidated and eager to try the idea of rolling positions, wanting to try it but fearing the high risk. In reality, rolling positions are not inherently risky; the risk comes from leverage, but when used appropriately, it's not a significant risk.
For example, if I have 10,000 yuan in capital and open a position when a certain coin is trading at 1,000 yuan, I use 10x leverage and only use 10% of my total capital (1,000 yuan) as margin. This is effectively equivalent to 1x leverage. If I set a 2% stop-loss, if it's triggered, I'll only lose 2% of that 1,000 yuan, or 200 yuan. Even if my position is ultimately liquidated, I'll only lose that 1,000 yuan, not my entire capital. People who get liquidated often use higher leverage or larger positions, which can trigger a liquidation even with the slightest market fluctuation. However, using this method limits your losses even if the market moves against you. So, you can roll over at 20x, 30x, 3x, or even 0.5x. Any leverage is fine; the key is to use it appropriately and manage your position size appropriately.
The above is the basic process of using a rolling position. Those who want to learn can read it several times and carefully consider it. Of course, there will be different opinions, but I only share my experience, not to convince others.
So how can you make a small amount of money bigger?
The effect of compound interest is crucial here. Imagine you own a coin, and its value doubles every day. After a month, its value will be staggering. Doubled on the first day, doubled again on the second, and so on, the final value will be astronomical. This is the power of compound interest. Even if you start with a small amount of money, after repeated doubling over time, it can grow to tens of millions.
For those who are considering a small investment, I recommend focusing on larger goals. Many people believe that small capital should be used for frequent short-term trading to achieve rapid growth, but this is actually more suited to medium- and long-term investment strategies. Rather than aiming for small daily profits, focus on achieving multiples of profit with each trade, using the unit of measure being exponential growth.
When it comes to position management, the first thing to do is to diversify your risk and avoid concentrating all your funds on a single trade. Divide your funds into three or four parts, and trade only one part at a time. For example, if you have 40,000 yuan, divide it into four parts, and trade with 10,000 yuan. Secondly, use leverage appropriately. My personal recommendation is to avoid using more than 10x leverage for big and small stocks, and less than 4x leverage for small and medium-sized stocks. Furthermore, you should adjust your leverage dynamically. If you lose money, replenish it with an equal amount from external sources. If you gain money, withdraw it appropriately. In any case, you should avoid losing money. Finally, increase your position, of course, only if you are already profitable. Once your funds grow to a certain level, you can gradually increase the amount of each trade, but avoid adding too much at once; build in a gradual process.
I believe that through proper position management and a sound trading strategy, even a small amount of capital can achieve significant growth over time. The key lies in patiently waiting for the right opportunity and focusing on the larger goal of each trade, rather than small daily profits. Of course, I've experienced margin calls, but the gains from spot trading offset those losses. I doubt you'll ever earn nothing from your spot trading. My futures portfolio only accounts for 2% of my total capital, so no matter how much I lose, I won't lose it all, and the amount of losses is always within my control. Ultimately, I hope each of us can build on our accumulated experience and achieve millions of dollars.
In the cryptocurrency circle, there is a cryptocurrency trading strategy (moving average) that finds buying and selling points with a winning rate of up to 95%. It is applicable to both spot and contracts, simple and practical (suitable for everyone)!
Without further ado, let’s get straight to the point.
Table of contents
What is a moving average? Types and formulas of moving averages How to add a moving average to a chart Trading applications of moving averages Combining multiple moving averages How to choose moving average parameters Advantages and disadvantages of moving averages
Summarize
As a stepping stone to technical indicators, the moving average is a must-learn for every novice trader and the most widely used technical indicator on the market. In this chapter, we'll explore the unique advantages of the moving average and how it helps investors make trading decisions. This article will delve into the meaning, types, and calculation methods of moving averages, as well as their practical applications in trading. Finally, we'll provide advice on how to adjust your own moving average parameters. What is a moving average? The moving average (MA), also known as the moving average, is one of the most commonly used indicators in technical analysis, helping traders smooth out price fluctuations and more clearly observe price trends. By calculating the average closing price of candlesticks over a specific period, it eliminates short-term price fluctuations, helping investors determine whether the market is in a bullish or bearish trend.
As you can see in the chart, the moving average smoothes the price fluctuations of the candlestick chart. So why does the larger the moving average parameter, the smoother the price? This is related to its formula. Next, let's understand how the moving average is formed.
Types and formulas of moving averages
The moving average is calculated based on the closing price of the K-line within a certain period of time, and is a weighted or unweighted average. The more common moving averages include:
Simple Moving Average (SMA), Exponential Moving Average (EMA), Weighted Moving Average (WMA).
1. Simple Moving Average (SMA)
The Simple Moving Average (SMA) is the most basic moving average. The following is the calculation formula of SMA: SMA = sum of closing prices of n days / n
The SMA for that day can be calculated by dividing the sum of the closing prices of the candlesticks within a specific range by the number of days n. The SMA gives equal weight to all data points, so price fluctuations are relatively smooth.
example:
Suppose the closing prices of a certain stock in the last five days are: 100, 102, 101, 104, and 103 respectively.
Calculation result: 5-day SMA is 102.
This type of moving average is relatively simple to calculate, but it uses the average price as a reference, so it reacts more slowly to recent price fluctuations. As n increases, the simple moving average becomes less relevant to the current situation and may sometimes not reflect the current situation.
2. Exponential Moving Average (EMA)
The Exponential Moving Average (EMA) gives different weights to closing prices in different periods during its calculation, with more recent candlestick closing prices having higher weights. Therefore, the EMA is more sensitive to price changes and its data is closer to the market price than the SMA.
EMA is useful in volatile markets or when traders want to capitalize on short-term trends. EMA = (Today's Closing Price X α) + [Yesterday's EMA X (1 - α)]
The smoothing coefficient α is an adjustment parameter, which is determined by the number of calculation days n: α=2/(n+1)
Calculation steps:
Step 1: Calculate α. Assuming n = 10, then α = 2/(10+1) = 0.182 Step 2: Use SMA as the value of EMA for the first day. Step 3: Starting from the second day, use the EMA calculation formula. Example:
Assume that the closing prices of a certain stock in the last three days are 100, 102, and 104. Calculate the 3-day EMA (simplified process):
Day 1:
SMA = (100 + 102 + 104) / 3 = 102 (as the starting EMA). Second day EMA: α = 2/(3+1) = 0.5
Today's price = 102, yesterday's EMA = 102. EMA = (102×0.5) + (102×0.5) = 102 3rd day EMA:
Today's price = 104, yesterday's EMA = 102. EMA = (104×0.5) + (102×0.5) = 103
3. Weighted Moving Average (WMA)
The Weighted Moving Average (WMA) is similar to the EMA, but instead of using an exponential decay, it assigns linearly decreasing weights. The WMA is suitable for markets with moderate volatility where traders want to smooth prices while still being able to follow trends quickly.
For example, in a 5-day WMA, day 1 has a weight of 1, day 2 has a weight of 2, and so on, day 5 has a weight of 5.
example:
Assume that the closing prices of a certain currency in the last three days are 100, 102, and 104. Calculate the 3-day WMA: the weights are 1 (1st day), 2 (2nd day), and 3 (3rd day) respectively.
Calculation formula: WMA = ((100*1)+(102*2)+(104*3))/(1+2+3) = 616/6 = 102.67 Calculation result: 3-day WMA is 102.67.
Trading applications of moving averages
As one of the most commonly used technical indicators in the financial market, the moving average has a variety of different trading applications. The functions of the moving average in trading are: to identify trends, to provide support and resistance references, and to identify trend turning points.
1. Used for trend judgment
Trend is one of the core of trading. Moving average can directly reflect the direction of price trend and help traders determine whether the current market is in an upward or downward trend. When the price is always above the moving average, it is likely to be an upward trend. When the price is always below the moving average, it is likely to be a downward trend.
Taking the Hong Kong Hang Seng Index HK50 in the above figure as an example, we can see that when the price is below the 20-day moving average and the moving average is falling, the asset price has a clear downward trend; and when the price is above the 20-day moving average and the moving average is rising, the asset price has an upward trend.
2. Serves as support and resistance
Under different market conditions, moving averages can act as dynamic support or resistance levels, helping traders determine potential rebound or breakthrough points in prices.
From the example of the S&P 500 in the figure above, we can see that when the asset price falls near the moving average, it will receive a certain degree of support; and when the price falls below the moving average, the moving average becomes a resistance level.
3. Use Golden Cross and Death Cross to Identify Trend Reversals
Moving average crossovers are often used as buy or sell signals. Common crossover strategies include the golden cross (when the short-term moving average crosses above the long-term moving average) and the death cross (when the short-term moving average crosses below the long-term moving average).
Taking the USD/JPY pair in the above chart as an example, when the 10-day SMA of USD/JPY fell below the 20-day SMA, it accelerated its decline, forming a clear downtrend. However, when the 10-day SMA broke above the 20-day SMA, the trend reversed, and the downtrend turned into an uptrend.
Combined application of multiple moving averages
Multiple moving averages can be used in combination, which can help traders judge market trends more clearly.
1. Bullish Moving Average Arrangement
The short-term, medium-term, and long-term moving averages are arranged in ascending order and all slope upward, indicating a strong bullish trend. Trading application: Consider holding a long position and adding to it on pullbacks to the short-term moving averages.
2. Moving average short position
The short-term, medium-term, and long-term moving averages are arranged in descending order, all sloping downward, indicating a strong bearish trend. Trading application: Consider holding a short position and adding to it when the short-term moving average rebounds.
3. Moving average entanglement
When multiple moving averages become parallel and intertwined, it indicates a market that may be experiencing volatility or about to break out. Trading application: Observe the direction in which the price breaks through the moving average entanglement and select an entry point.
How to choose the parameters of the moving average
The parameters of the moving average are very important in trading, because different parameters will directly affect the generated trading signals. So how should we choose the parameters of the moving average?
1. Classification of Moving Average Time Periods
Moving averages can be broadly categorized into three types based on their timeframe: Short-term moving averages (5-day and 10-day) offer advantages: They react quickly and are sensitive to market fluctuations. They are suitable for day traders seeking intraday trading or short-term swing trading. Application scenarios: They capture short-term price fluctuations, such as breakouts, pullbacks, and rebounds.
Medium-term moving average (20-day, 50-day)
Features: Balances sensitivity and stability, effectively identifying swing trends. Ideal for swing traders seeking to capture a complete trend. Applications: Determine the stability of market trends and filter out the noise of short-term fluctuations.
Long-term moving averages (100-day, 200-day)
Characteristics: Slower to react, but better able to reflect long-term market trends. Suitable for long-term investors. Applications: Used to identify bull or bear markets and as a primary support or resistance level.
2. Choose parameters based on your trading style
Day traders
Recommended moving average parameters: 5-day EMA, 10-day EMA
Rationale: Day trading requires quick reactions, so short-term EMAs are more suitable for capturing immediate price fluctuations. Application: When the 5-day EMA crosses above the 10-day EMA, a buy signal is triggered; otherwise, a sell signal is triggered.
Short-term swing traders
Recommended moving average parameters: 10-day EMA, 20-day EMA
Rationale: Short-term swing trading requires a balance between sensitivity and stability. The 20-day EMA can reflect recent trends and filter out short-term noise. Application: Consider buying when the price stabilizes above the 20-day EMA; consider selling when it falls below the 20-day EMA.
Medium- and long-term investors
Recommended moving average parameters: 50-day SMA, 100-day SMA, 200-day SMA
Reasoning: Long-term investing focuses on macro-trend analysis, and the 200-day SMA is a crucial dividing line between bull and bear markets. Application: A cross above the 200-day SMA signals a long-term bull market, suitable for dips. A cross below the 200-day SMA signals a weakening market, advising caution.
3. How to choose parameters based on market characteristics
High-volatility markets (such as cryptocurrencies and tech stocks) experience significant market fluctuations and are therefore better suited to using more sensitive moving averages, such as shorter-term EMAs (5- and 10-day moving averages). The reason for this is that EMAs can more quickly reflect market changes, allowing traders to adjust their strategies in a timely manner.
Low volatility markets (e.g. large blue-chip stocks, stable assets)
In a stable market, it's appropriate to use a smoother SMA (20, 50, or 200-day). Reason: SMAs filter out unnecessary short-term noise, allowing traders to focus on medium- and long-term trends.
Volatile market
During periods of sideways or volatile price movements, moving averages are prone to frequent crossovers. Recommendation: Combine multiple moving averages (e.g., 5-, 10-, and 20-day SMAs) to observe whether the moving averages become tangled and the direction of price movement after breaking through any tangled lines.
Advantages and Disadvantages of Moving Averages Although the moving average is one of the most widely used technical indicators in the financial markets, it is not perfect. Next, let's take a look at the advantages and disadvantages of the moving average.
1. Advantages of Moving Averages
Smooth price fluctuations and filter out noise
By smoothing price data over a period of time, moving averages filter out the noise of short-term price fluctuations and help traders focus on the main trend.
High flexibility, suitable for different time periods
Moving averages can be set based on different trading timeframes, from short-term (e.g., 5-day, 10-day) to long-term (e.g., 100-day, 200-day). For example, a short-term trader might choose a 5-day or 10-day moving average to capture short-term fluctuations, while a long-term investor might choose a 200-day moving average to identify bull-bear market fluctuations.
Providing clear trading signals Moving average crossovers (such as golden crosses and death crosses) and price breakout strategies can provide clear buy and sell signals. These signals can help traders develop clear entry and exit plans and reduce indecision.
2. Disadvantages of Moving Averages
Strong hysteresis and slow response
Moving averages are calculated based on past price data and cannot predict the future; they can only reflect past trends. When the market reverses rapidly, moving averages can lag, delaying entry or exit signals.
For example, when the market rises or plummets rapidly, the price may have already completed a round of fluctuation, while the moving average crossover signal has just appeared, missing the best trading opportunity.
Unable to cope with volatile market conditions and prone to false signals
During sideways or volatile markets, prices frequently cross moving averages, leading to frequent false signals and frequent entry and exits, increasing trading costs. For example, during a volatile market, short-term moving averages (such as the 5-day or 10-day moving averages) frequently cross over prices without a clear trend, leading to losses.
It's difficult to capture extreme market conditions or sudden market fluctuations. Moving averages can't respond to sudden market events or sharp fluctuations, and may miss major trends or reversal signals. For example, when major news causes a sudden surge or plunge in the market, the moving average's trading signals often lag behind the price.
Summarize
Moving averages are one of the most commonly used indicators in technical analysis. They use smoothed price fluctuations to identify market trends and provide trading signals. They include the simple moving average (SMA), exponential moving average (EMA), and weighted moving average (WMA). They can be used for trend analysis, support and resistance analysis, and identifying trend reversal points. Short-term moving averages are suitable for traders who react quickly, while medium- and long-term moving averages help capture stable trends. While moving averages are easy to understand and effectively filter out noise, their lag and false signals in volatile markets require caution. A deeper understanding and adjustment of moving averages requires continuous experimentation.
Over 10 years of cryptocurrency trading experience, with tens of thousands of trades, I've come up with a practical guide to stable compound interest position management! (Applicable to both spot and futures)
Investing in the cryptocurrency market offers high returns but also significant risks, which are omnipresent. Mistakes in choices or operations can lead to unnecessary losses. To ensure the aforementioned return targets are achieved, it is essential to strengthen risk awareness and implement effective risk control measures. If you think of your position as a reservoir, each coin is the tap that releases water into the pool, and you control the tap's opening and closing.
Position Management
1. Manage risk through both strategic thinking and operational analysis. Don't rush into buying; optimize your positions by buying in multiple positions. Follow buying rules like 334, 433, and enter the market in batches to avoid going all-in. Set take-profit and stop-loss orders. If the price breaks down, technical indicators reach a peak, or your holdings are experiencing a significant decline in profits or even losses, you should implement protective strategies. Use timely take-profit orders to preserve profits and stop-loss orders to prevent further losses.
2. Adhere to the principle of risk diversification. Diversify your holdings across sectors and currencies to control risk. Each account should avoid holding a single currency, but also avoid holding a wide variety of different currencies, which can hinder resilience to market fluctuations. Strategically distribute your long and mid-term positions, like deploying troops in battle. Your funds are your soldiers. Long-term investments in Bitcoin or Ethereum guarantee profitability. A good investment should be in 3-5 other currencies. Mid-term positions should focus on currently hot sectors, while short-term, or flexible, positions should be used to speculate on surging prices. A reasonable ratio of 5:3:2 should be used for long, medium, and short-term positions.
3. Position risk control. Manage your position size carefully. Keep it at 30% during the bottoming phase, increase it to 50% at the end of a bear market and the beginning of a bull market, and maintain it above 70% once a bull market is confirmed. Never trade with a full position, as this will not be enough to cope with sudden market fluctuations. Limit your total position size. Larger positions yield greater returns, but also greater risks. Traders should determine their position size based on market fluctuations. When the trend is positive, hold a larger position; when the market is unstable, reduce your position appropriately, holding a smaller amount of coins for flexible trading.
4. Capital management and profit management
Proper profit management is the best way to earn money. First, we must treat the cryptocurrency market as an ATM, not a deposit machine. As long as you don't withdraw, your money is just a number. Earnings must be cashed out, not simply reinvested. Only when you put it in your pocket is it your money. Don't just roll it back with the money you earn. Keep at least half of your profits in a capital account—this is called a reserve requirement. Of course, you can withdraw all your earnings. Even if you lose money in this trading account, there are funds to help you recover your losses. Never roll your earnings and principal together daily. After all, no one is a god, and everyone makes mistakes. A margin call could happen one day, leaving you penniless and without a chance to recover your losses.
How to follow orders and control positions
How to buy a position depends on the market. For example, in the current market, you need to hold a heavy position, but you also need to keep a certain position for risk control. This chapter is all about short-term position control.
First, let’s talk about the position control of Big Pancake Auntie contract:
Generally, 100X leverage is used, with a small position of 2%-2.5%, and normally controlled at 3-5%. Contract liquidations are common, so those who follow orders must set stop-loss orders when opening them, and are strictly prohibited from carrying orders. You can enter the market directly if the entry point is not far away, because the exchange price may deviate. When each order reaches the first take-profit level, you can reduce your position or take profit directly.
Let's take altcoins as an example: For a single coin, the combined maximum of the three positions should not exceed 30%. A maximum of 3-5 coins should not exceed 70% of the total position (a normal position). For a single coin, the combined maximum of the three positions should not exceed 20%. A maximum of 3-5 coins should not exceed 50% of the total position (a conservative position).
Let's take leverage as an example: 10x leverage is optimal with 2-3 tiers of positions. Over 30% is already risky, and even higher leverage won't withstand a single plunge; the margin for error is minimal. This is Leng Feng's summary of years of experience, so don't take it lightly. If you increase leverage, you can simultaneously reduce your positions, and vice versa. This will ensure you achieve similar results to Leng Feng's.
For a single cryptocurrency, the combined maximum holding of the three positions should not exceed 30%. A maximum of 3-5 cryptocurrencies should be held, and the combined maximum holding should not exceed 30% of the total position (normal position). For a single cryptocurrency, the combined maximum holding of the three positions should not exceed 20%. A maximum of 3-5 cryptocurrencies should be held, and the combined maximum holding should not exceed 20% of the total position (conservative position).
The operation of covering a position is an important part of normal operations.
When you buy one, you must first have an idea of how much U you are going to buy. For example, if I want to buy BTC, I need to buy a total of 1000 U, if I want to buy ETH, I need to buy a total of 2000 U, and if I want to buy ORDI, I need to buy a total of 500 U.
Secondly, you should have a plan for your buying progress, usually a three-position system, a 4:3:3 or 3:4:3 progression. If the stock starts to rise during your buying process, don't add to your position. If all three positions are entered and the stock continues to fall, don't add to your position.
1. Set a stop loss. This is a must, not an option.
2. If you have added to your position but the stock is still falling, it means that your judgment is wrong. You can reduce your position first and wait for it to turn around before adding more.
3. Turn around and add to your position. When adding to your position, don't do so as the price continues to fall, as this will easily make your position heavier. Instead, wait until the price turns around before adding to your position.
4. There are two types of margin calls:
One strategy is to reduce costs. This involves covering a position and exiting as soon as the price reaches above the cost price. Of course, sometimes the price drops even after covering, in which case the second strategy should be followed. Another strategy is to increase profits, also known as a flexible position. This strategy allows you to reduce your position based on your profit margin, exiting once you reach your profit target. You can also exit based on resistance levels—first, second, or third resistance levels—in batches or all at once. For a base position, I generally consider the first position as the foundation, the base position. Of course, this isn't a fixed position. When the market is good, you can increase the percentage; when it's bad, keep a smaller base position.
5. The problem of adding extra pins to increase your position. This is actually a problem of overall position planning. If you find that your position has been accidentally opened too large, you should actively reduce it and don't take chances!
6. Issues regarding position transfer and exchange
If we hold a group of 3-5 coins, and we don't want to increase our position, we have to sell one before buying another, and we can't buy or sell one. If we want to control our position during a decline, we must reduce our position from the weakest coin. If we don't want to increase our total position but still want to buy strong coins, we can reduce our holdings of weaker coins or sell the weakest coin and transfer our position to stronger coins.
Observe the top and bottom to avoid risks
Before placing a trade, check Bitcoin to see if the recent Bitcoin market is good or bad. If Bitcoin is about to fall, everything will be doomed. If you think the market is dangerous and may fall, you should reduce or liquidate your position. In a market that may have reached its peak, everyone should know how to operate. Most of our losses are caused by this. Before placing a trade, we must first check Bitcoin's trend and what it is currently trending.
In a downtrend that may have peaked or already begun to decline, holdings should be reduced, and regular trading positions should also be scaled back. As Bitcoin declines, gradually reduce long positions to stay in line with the broader trend, waiting for key support levels or a reversal before increasing positions again. This market may be bottoming out, so don't even think about bottom fishing; the bottom is slowly emerging. Even short-term traders betting on a rebound should control their positions and set stop-loss and take-profit orders. This is unless a strong reversal candlestick pattern appears.
During a rebound or upward trend, you can trade normally in the early stages, but become more cautious as the market progresses, especially during key market shifts. Gradually reduce your position and trading frequency. Every investor needs to be able to discern the market's current timeframe. If you can't even determine whether the market is risky, or how significant it is, you lack fundamental knowledge, and it's beyond the scope of a single article. For those of you, please thoroughly learn the basics of market analysis. Bitcoin's trading chart is the most standard and simple of all cryptocurrencies.
Relationship with Bitcoin
Bitcoin is clearly on an upward trend and hasn't reached critical resistance yet. This is the market that Mr. Jin specializes in. You can be a little casual, but don't go crazy. Tip: Bitcoin is still on an upward trend today and is relatively stable, so feel free to hold on and buy.
When Bitcoin encounters a key resistance zone, consider the previously analyzed key resistance zones, which are widely recognized. At this point, altcoin traders should be cautious when buying long positions and avoid opening positions near Bitcoin's peak. Waiting for a pullback or breakout before making a short-term move is the most stable option. For medium- and long-term traders, reduce positions or consider exiting the market. Tip: When Bitcoin encounters key resistance zones, monitor for a breakout. Avoid long positions before a breakout occurs, and prioritize shorting at high levels with small positions.
When Bitcoin hits a critical resistance level and retraces, consider short-term long positions after it stabilizes at support levels. Lower your profit expectations and trade with smaller positions, preferably reducing the number of trades and the number of currencies you trade. Tip: When Bitcoin hits support levels, the overall trend is upward, so buy to take advantage of the rebound. If the overall trend is downward, trade with a small position to take advantage of the rebound.
Bitcoin has fallen to key support levels, so analyze whether it may have bottomed out. If you're unsure about a bottom, avoid placing long orders at high levels. If you do, set a stop-loss order and minimize the number of orders and the number of currencies you trade. Tip: Bitcoin has reached key support levels, and a break below could trigger a sharp drop. Optimize your long positions and avoid long positions.
Analyze the market for potential bottoming out and buy the dips in batches, ensuring that your stop-loss is within your tolerance range if your predictions are wrong. Tip: If Bitcoin falls to key support levels, there is a technical possibility of a rebound, so you can bet on a rebound. Conservative investors can wait for a bottom to form.
Bitcoin's market fluctuates. Pay attention to the range of Bitcoin's fluctuations. Don't go long near the top of the box. Go long on a breakout. Or consider buying in the middle or end. Tip: Bitcoin's box fluctuations are currently at (head/middle/tail). Risks range from high to low.
Bitcoin's short-term volatility and repeated retracements to key support levels indicate an 80% chance of failure, prompting a short-term pause and a mid- to long-term exit. Many instances of Bitcoin retracing to a key support level four or more times on the daily chart without a significant rebound, maintaining a volatile trend or experiencing increasingly lower rebound highs, suggest a strong potential for a correction. Tip: Bitcoin is extremely weak, so avoid opening long positions if possible. Short positions can be purchased in small, phased positions.
Trading is not about getting rich overnight, but about making reasonable profits that are long-term, stable, sustainable, and have a high probability of success, so that you can obtain wealth continuously.
Professionalism creates value, and details determine success or failure. If you're currently feeling helpless or lost in the cryptocurrency world, I hope my sharing can provide some inspiration and help!
I'm Xiaoyue, a professional analyst and teacher. I'm your mentor and friend on your investment journey! As an analyst, the most basic thing is to help everyone make money. I'll help you solve confusion and hedge orders, and speak with strength. When you're lost and don't know what to do, follow Xiaoyue. Xiaoyue will show you the way. #币安HODLer空投ENSO $ETH
