It is stated that potential strategies are offered for investors who trade in cryptocurrency markets and frequently experience losses. These strategies, shared through the Gate platform, draw attention especially by emphasizing high leverage usage. However, the high risks associated with leveraged trading in financial markets should not be overlooked. The warning "Never exceed 5% of your total funds when opening your first position; otherwise, if the leverage is too high, you won't be able to withstand sudden large rises and falls" (anonymous, 2025) constitutes the first emphasis on risk management.
Bitcoin Trading Strategies and Risk Analysis
The shared Bitcoin (BTC) trading strategies specify entry, take profit, and defense (stop-loss) levels for both long and short positions for noon on June 5 (China time). Both strategies recommend a 2% fund allocation and extremely high leverage ratios like 100X-125X. Such high leverage means that even small price movements can lead to significant gains or losses (Chen & Lee, 2023).
Long Position Strategy
In the BTC long position strategy, the entry range is set at 103700-104200, while the take profit level is projected at 105000-106000 and the defense level at 102700. In case of a drop below the defense level, it is stated that "the strength of the rebound should be observed" and "if it can close above the support level within one or two minutes, margin support can be provided and it can continue to be held" (anonymous, 2025). This situation indicates that market volatility must be managed with immediate responses.
Short Position Strategy
For the short position, the entry range is set at 105950-106500, the take profit level is 104800-104000, and the defense level is presented as 107500. In case of a break of the defense level, it is stated that "one should look for a retest; if the retest creates higher peaks, then it is almost certainly a stable breakout, and at this point, the position could be closed and exited" (anonymous, 2025). This emphasizes the importance of technical analysis (Murphy, 1999).
Critical Risk Warning
The warnings in the shared strategies, "Take your profits and don't be greedy" and "Never exceed 5% of your total funds when opening a position," highlight the importance of psychological discipline and capital management. However, considering the suggested leverage ratios, trading with such strategies is excessively risky for individual investors. It is essential for investors to assess their own risk tolerance well and only trade with amounts they can afford to lose.
Conclusion
Trading in cryptocurrency markets carries significant risks, especially when leverage is used. The strategies presented may promise potentially quick gains, but can also lead to significant losses just as quickly. It is vital for every investor to conduct their own research, prioritize risk management, and seek professional financial advice if necessary.
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