Personal experience: After losing 8 million in three nights, I experienced the pain of losing my contract and realized the only secret to playing contracts!
Avoid liquidation when trading contracts: do the following two things
1. Ultimate position management: the ultimate line of defense against cryptocurrency contract liquidation!
2. Control of multiples: 10 times, 20 times, 50 times, 100 times, 125 times. Correct control of high leverage ratio!
From 300U to 100,000U with Rolling Compounding: How I did it in 3 months (with real strategy)
There has never been a shortage of myths about getting rich quickly in the cryptocurrency world, but most people are just bystanders.
Today, I want to share a real and feasible path - how to use 300U principal to roll to 100,000U in 3 months. This is not a theory, but a method I have personally verified. In the process, I stepped on pits and exploded my warehouse, but finally found a set of high-win-rate playing methods.
Step 1: Fund allocation (avoiding one-time zeroing)
300U may not seem like much, but if you go all-in on one coin, there is a 99% chance that it will go to zero. My strategy is:
150U (50%): used for trend trading (BTC/ETH mainstream market)
100U (30%): Ambush low market value potential coins (selected by key indicators)
50U (20%): Short-term contract sniping (high volatility market)
Step 2: Trend trading - catch the main uptrend
In January 2024, I observed that BTC was trading sideways around 38,000, and on-chain data showed that whales were accumulating funds. So, I bought in batches around 38,500 and took profits at 42,000 and 45,000 respectively. This transaction alone turned 1,500U into 2,800U
How to judge the trend? I mainly look at three indicators (one of which is on-chain data, the other two are @BitHuang
Step 3: Ambush low-market-cap coins (the key to a 10x jump)
MEME coins, new public chains, RWA tracks... low-market-cap coins have strong explosive power, but 99% of them are garbage. I use three screening criteria to find projects with real potential.
In March this year, I used this method to increase my money 25 times on a certain animal coin in 5 days (call me for the specific coin and buying time)
Step 4: Short-term contract sniping (high risk and high return)
Short-term contracts are an accelerator, but also a "meat grinder". My strategy is:
Open orders only at key support/resistance levels (avoid frequent trading)
Strict stop loss (no more than 3% of the principal)
Using funding rate arbitrage (a hidden trick of a certain exchange)
The last step: compound growth (the key to going from 10,000U to 100,000U)
When the funds exceeded 10,000 U, I began to use the "pyramid position method" to ensure maximum profit when the big market comes. At the same time, I began to arrange cross-exchange arbitrage and use the price difference to make stable profits.
1. Liquidation in the cryptocurrency contract market is common
In the cryptocurrency world, it is not difficult to find that funds are never a problem. What is truly scarce is the upward force that can gather all forces. This force is what every market participant desires and is the key to driving the market forward.
So why did such a large-scale liquidation occur? Is it just small funds that are desperate and trying to make a fortune with a small investment? This is not the case. Whether it is small funds or large funds, the pursuit of overnight wealth is a common goal. When we see the figures of those liquidations, we should not simply blame them on the impulse of small funds.
Suppose that if 1 million retail investors all enter the contract market, then the 20 billion liquidation funds will average out to 20,000 per person. But this is just an extreme assumption, which is based on the assumption that all retail investors participate in the contract and all contracts are liquidated. But the reality is not the case. Recently, the proportion of liquidation of long positions has reached more than 90%, which has caused us to think about the real situation of the market.
From this perspective, it is not just retail investors who are liquidated. The liquidation of tens of billions of dollars is more like a warning: whether using 5x, 20x or 100x leverage, there are huge risks. This risk can come at any time regardless of the size of the funds.
2. Establish a robust contract practice system to cope with market fluctuations
Why are so many people still hesitant and hesitant to buy recently? After in-depth analysis, I found that different friends have their own unique insights, but more voices reveal the following mentality:
One is that they have “run out of ammunition” and lack of funds makes it impossible for them to re-enter the market.
The second is the concern that "the decline will never end", and the fear that the market will continue to fall after buying.
The third is the mentality of "fear of gain and loss", which is to be afraid of losses but also to pursue victory, thus falling into a vicious circle of chasing rising and selling falling.
The fourth is to "wait and see" and miss the opportunity in hesitation.
The fifth is "lack of courage and determination", feeling fear of the unknown in the market and being unable to act decisively.
These mentalities are common in the cryptocurrency world. They are like an invisible barrier that fills the entire market with panic. After an in-depth analysis, I found that the first four reasons mostly stem from the cognitive level of contract investment. Only when you have a deep understanding and sufficient knowledge of the market can you overcome these obstacles and have enough courage and determination to deal with market fluctuations.
There are two main reasons for the market downturn after the cryptocurrency market crash: one is the natural fear instinct of human beings, and the other is the lack of understanding of contract speculation. In addition to these psychological factors, I think the more critical thing is to establish a set of your own contract practice system.
3. From self-awareness to strategy improvement, achieving long-term stability
The famous investment philosopher Van Tharp once said: "You are not trading the market alone, but your understanding and belief in the market." What this means is your investment operating system - a unique set of market interpretation and action guidelines. But how easy is it to build such a practical system?
Before building the latest strategy system, you need to clarify your investment philosophy and have a deep understanding of yourself. This includes your interests, goals, knowledge accumulation, skills mastery, and the boundaries of your abilities. Only by truly understanding yourself can you find a path that suits you. In addition, you need to be clear about when to enter the market, when to leave the market, which targets to choose, and how to configure positions. Not only that, you also need to be prepared to deal with mistakes. When the market trend does not meet your expectations, how should you deal with it? This is not to let you choose extreme methods, but to let you learn lessons from failure and constantly improve your system.
You may find this road difficult. But playing with coins is not an easy task that can be accomplished overnight. It requires continuous learning, practice, reflection and adjustment. To establish and verify a perfect investment operating system, you often need to go through two bull and bear cycles. In the stock market, this may take 6 to 10 years; in the cryptocurrency circle, although it is generally recognized that the bull and bear cycle is shorter, about 4 years, it also means that you need at least 8 years to continuously improve and verify your system.
This may sound daunting, but you have to know that this is a marathon, not a sprint. However, I must admit that not everyone realizes the importance of establishing an investment operating system. Some retail investors may blindly follow the trend and chase the rise and fall throughout their lives, and never really establish their own strategy system.
4. How to avoid liquidation in contract operations?
In fact, I have tried to build multiple operating systems. I have carefully designed the valuation model of currencies, the criteria for buying and selling, the strategy for selecting currencies, and the planning of holding time. Whether it is the stock market or the foreign exchange market, I have invested my efforts in operation. Now I bring these experiences to the cryptocurrency circle, hoping to find my own path to success here.
In the past six months, I have suffered five liquidations in contract operations. This is undoubtedly a heavy blow to me, and also a miraculous experience in my career in the cryptocurrency circle. After each liquidation, I tried to find various reasons and reasons to explain it, and even complained about the volatility of the market like many leeks.
But one day, it suddenly dawned on me. I began to realize that an overly complex operating system might not be what I really needed. I began to think about whether there was a way to get rid of the trouble of liquidation and make me more relaxed on the road of the cryptocurrency circle.
So, I found my answer - strict position management. Although this trick is simple, it contains profound investment wisdom. It allows me to stay calm in the face of market fluctuations and avoid getting into trouble due to excessive leverage or heavy positions. I believe that as long as I can strictly implement this strategy, I will be able to go further and more steadily on the road of investment.
5. Extreme position management: the ultimate line of defense against cryptocurrency contract liquidation!
The root cause of contract liquidation is often due to two factors: excessive leverage and full position operation. These two are like a double-edged sword in position management, and we need to carefully weigh them. Leverage and position complement each other. When you choose high leverage, you must adjust your position to a very low level accordingly, and vice versa.
We don't need to comment on the extreme volatility of the market, and we don't need to be too emotional about the ups and downs of the market. How the outside world changes has nothing to do with our inner decisions. All we have to do is to protect the safety of our positions. The market will always stir up waves at some point, but the safest strategy is to put yourself in a solid fortress. You can occasionally stick your head out and feel the pulse of the market, but you must never expose yourself to the forefront of risks.
Therefore, extremely demanding position management has become the core of contract trading. It is not only a strategy, but also an attitude, a kind of awe and respect for investment. For example, the current price of EOS is 3U. If we can control our contract liquidation price at 1.5U, then no matter how the market fluctuates, we will be safe. This is the charm of position management, which makes us more calm and at ease in investment.
There is an old saying: "If you keep the green mountains, you will never run out of firewood." This is the essence of position management. Only by ensuring the safety of your own funds can you be invincible in the future market. In the currency circle, I always adhere to half-positionism, or even dynamic half-positionism. Whether it is spot trading or contract trading, I can handle it with ease. After experiencing the baptism of the contract market many times, I deeply realized that the only secret to playing contracts is position management.
I am Liang Ge. I have experienced many rounds of bull and bear markets and have rich market experience in many financial fields. Follow Liang Ge, and here, you can penetrate the fog of information and discover the real market. Grasp more opportunities for wealth codes, discover truly valuable opportunities, and don't miss them and regret it!
Revealing the secrets of technical analysis in the cryptocurrency world: 8 must-learn indicators to help you seize the market opportunity! Applicable to both spot and contracts!
In the cryptocurrency market, the market changes rapidly, and how to accurately capture opportunities has become an important issue for traders. This article will take you to learn about the 8 major technical analysis indicators in the cryptocurrency circle in detail, analyze their application methods and practical skills, and help you better identify market signals and improve your trading success rate.
Popularization of technical analysis indicators in the cryptocurrency circle
1. Moving Average (MA): A powerful tool for trend judgment
Definition: Moving averages smooth out data fluctuations by calculating the average price over a period of time, helping you determine the overall market trend.
Application tips:
Golden Cross: When the short-term moving average crosses the long-term moving average, it is often seen as a buy signal.
Death Cross: When the short-term moving average crosses below the long-term moving average, it may indicate a selling opportunity.
2. Relative Strength Index (RSI): Overbought and Oversold Signals
Definition: The RSI indicator measures the speed and magnitude of price changes on a scale of 0 to 100.
Application tips:
When the RSI exceeds 70, it usually indicates that the market is overbought and the risk is increasing;
If the RSI is below 30, it may be in the oversold zone and there may be an opportunity to buy at the bottom.
3. Average True Range (ATR): Volatility Indicator
Definition: ATR is used to measure market volatility, with higher values indicating greater volatility.
Application tips:
It can help you set a reasonable stop loss position, such as setting the stop loss to 1.5 times the current ATR to reduce risks.
4. MACD indicator: dual verification of momentum and trend
Definition: MACD uses the difference between two exponential moving averages (EMA) to generate momentum signals.
Application tips:
Crossover signal: When the MACD line crosses the signal line, it is a buy signal, and vice versa, it is a sell signal;
Histogram changes: The expansion or contraction of the histogram helps determine the strength of the trend.
5. Bollinger Bands: Price fluctuation range
Definition: Bollinger Bands consist of a middle track (usually a 20-day SMA) and two upper and lower standard deviation lines.
Application tips:
If the price hits the upper band, it may be overbought, while if it hits the lower band, it may be oversold;
The narrowing of the Bollinger Bands indicates that a big market trend is about to occur, so we need to pay close attention.
6. Fibonacci Retracement: Finding Support and Resistance
Definition: Determine support and resistance levels for price pullbacks based on the Golden Ratio (e.g. 0.382, 0.5, 0.618, etc.).
Application tips:
In an uptrend, a retracement to the 0.618 range could offer a buying opportunity;
In a downtrend, a bounce to the 0.382 range could be a sell signal
7. Volume indicators: the key to verifying trends
Definition: Volume reflects market activity and is usually analyzed together with price trends.
Application tips:
If the volume increases when the price rises, the trend is more reliable;
If prices rise but trading volume shrinks, you need to be alert to a possible trend reversal.
8. KD indicator: capture short-term buying and selling opportunities
Definition: The KD indicator uses the Stochastic Oscillator to determine price momentum.
Application tips:
K line crosses D line: usually a buy signal;
The K line crosses below the D line: This may indicate a sell signal and is suitable for short-term operations.
Practical skills: indicator combination helps you gain a foothold in the cryptocurrency circle
A single indicator often has limitations. In actual trading, it is recommended to combine multiple indicators:
MA and RSI combination: When the short-term moving average crosses the long-term moving average and the RSI is not yet overbought, you can consider entering the market with the trend.
MACD and Bollinger Bands: MACD crossover signals combined with the narrowing of the Bollinger Bands can help you capture entry opportunities before the market explodes.
Volume verification: No matter which indicator is used, trading volume is always an important basis for judging the sustainability of the market, and it must be combined with observation.
Conclusion
Technical analysis is only a part of cryptocurrency trading. Successful trading also requires continuous learning, practical summarization and good risk management. I hope that the major indicators and practical combinations introduced in this article can help you. At the same time, we also welcome you to communicate more and share your trading experience. I wish you all can make steady profits and avoid detours in cryptocurrency trading!
Contract explosion prevention guide
● Do a good job of risk control. Contract trading is a high-risk investment behavior. Before conducting contract trading, you need to develop a detailed risk control plan.
● Fund management. Reasonable fund management/allocation can effectively reduce risks and avoid contract liquidation.
● Control leverage ratio. Controlling leverage ratio is one of the important ways to avoid contract liquidation.
● Stop loss in time. Stop loss is more difficult than stop profit.
What is a contract liquidation?
It refers to the situation in which, in contract trading, the margin in the user's account is insufficient to maintain the original contract position due to the market price changing too fast or too much, resulting in forced liquidation and liquidation of losses. The principle of contract explosion can be expressed by the following formula: Margin rate = (account equity + unrealized profit and loss) / (contract value * leverage multiple) When the margin rate is lower than the maintenance margin rate, the forced liquidation mechanism will be triggered, that is, the platform will automatically close all the user's contract positions at the best market price and deduct the corresponding handling fees and funding rates. If the market price fluctuates too much, causing the liquidation price to be lower than the bankruptcy price (that is, the price when the account equity is zero), there will be liquidation losses, that is, the user will not only lose all the margin, but may also need to compensate the platform or other users for losses.
Why is it easy to get liquidated?
The fundamental reason for the contract liquidation is that the market price changes exceed the user's expectations and affordability, resulting in insufficient margin to support the contract position.
Contract trading is very risky due to the leverage effect. When the price goes against you, you need to close your position in time to prevent further losses. If you do not close your position in time, your margin will gradually decrease until it eventually reaches the liquidation line. If your margin is lower than the liquidation line, your position will be forced to close and all funds will be liquidated.
Specifically, there are the following common situations:
Overweight positions: In order to pursue higher returns, some users will choose higher leverage or a larger number of open positions, resulting in a lower margin ratio and greater risk exposure. Once the market fluctuates in the opposite direction, it is easy to trigger the forced liquidation line.
No stop loss: In order to avoid frequent stop losses or missed rebound opportunities, some users choose not to set stop losses or set loose stop loss conditions, which makes it impossible to control losses in time. Once the market fluctuates violently, it is easy to cause a liquidation.
Arrogance and refusal to admit mistakes: When facing adverse market fluctuations, some users will be unwilling to admit their misjudgment out of self-denial or self-comfort, but continue to insist or increase their positions, resulting in increasing losses. Once the market fluctuates extremely, it is easy to cause a liquidation.
How to avoid margin call?
Control levers
So, how much percentage of a contract will cause a margin call? The answer is: it depends on your leverage ratio and margin level.
For example, suppose you use $10,000 plus 5 times leverage to buy $50,000 worth of Bitcoin, which is equivalent to a 20% margin investment. If Bitcoin rises by 20% the next day, the value of the Bitcoin in your hand becomes $60,000, and you earn $10,000. But your principal is only $10,000, so it is equivalent to a 100% return rate; but if on the contrary, Bitcoin falls by 20% the next day, then you lose $10,000, which is equivalent to losing all your principal. If you continue to lose money, the platform will also lose the money it lent you, so the platform will force you to sell your Bitcoin and recover the money and interest it lent you, which is a forced liquidation. In this way, you lose your money and coins, and you don’t even have the chance to wait for it to rise again, which means that your position is completely liquidated.
In fact, for novice users who participate in contract trading for the first time, when opening a position, they should choose the appropriate leverage ratio and opening quantity according to their own financial situation and risk tolerance, and avoid excessive greed or fear. Generally speaking, the margin ratio should be kept above 10% and the leverage ratio should be kept below 10 times.
Set a stop loss
Controlling the leverage properly can avoid the risk of liquidation to a certain extent, but the crypto market is characterized by high volatility. Even if the leverage ratio is controlled, it will still be shaken by the huge ups and downs of the market. Therefore, under the premise of controlling the position reasonably, we also need to set a stop loss point/line.
Stop losses can be considered part of your exit strategy for every trade you place. These orders are executed once the price reaches a predetermined level, closing your long or short position to reduce losses. Whether you prefer to trade using candlestick charts, trend lines, or technical indicators, with a stop loss, you never have to worry about exiting a trade or second-guessing your decision. For example, a trader who takes a long position based on an ascending triangle can quickly determine where to place the setup. The height of the triangle's Y axis can generate a potential target, while the pattern's hypotenuse indicates an invalidation point.
I strongly recommend that you set a stop loss/exit point for each contract transaction, because no one knows what will happen in the cryptocurrency market on a certain day. Therefore, stop loss helps protect you from unknown situations and better understand the expectations of each position you open. When opening a position on Bitget, setting a stop loss is very simple. Enter [Contract], check [Take Profit/Stop Loss], and enter the [Stop Loss] price. Bitget's contract transactions can set up to 20 stop losses in total, which can protect the principal of your contract account more efficiently.
Suppose you bought a BTCUSDT contract on Bitget Futures for $10,000. To minimize the possible losses on this trade, you can set a stop order at 20% below the purchase price, which is $8,000. If the price of BTCUSDT falls below $8,000, your stop order will be triggered. The exchange then sells the contract at the current market price, which may be exactly the trigger price of $8,000, or significantly lower, depending on current market conditions.
It should be noted that stop loss is not a foolproof method to prevent forced liquidation. In the crypto market, the forced liquidation price may change. Setting a stop loss can only reduce the risk of liquidation, but it cannot prevent forced liquidation. For novice users, this may be the only "unfriendly" part, so before starting contract trading, you must first clarify and fix the maximum loss amount you can accept. The most straightforward approach is "opening order investment amount = maximum stop loss amount", that is, after the user has assessed his or her maximum single loss amount, he or she will use that number as a benchmark to open an order.
Money Management
As we all know, money management is a method of adjusting position size to reduce risk while maximizing the potential for growth in your trading account. This strategy limits the capital of any one trade to a certain percentage of your account value. For beginners, 5%-10% is a relatively reasonable ratio. The dollar value of this range will rise or fall as the account value changes, and it ensures that you do not over-expose your entire account to a single position.
Due to the unpredictable and volatile nature of cryptocurrencies, you can potentially lose your entire investment in a matter of minutes when investing in highly leveraged derivatives such as perpetual futures contracts. Therefore, investors should adhere to stricter limits; the rule of thumb when trading volatile assets is to risk only 5% or no more than 10% of your capital on a given trade.
For example, let's say you have 10,000 USDT in your Bitget contract account. In this case, you would allocate 500-1,000 USDT risk per trade. If a trade goes wrong, you will only lose 5% or 10% of the funds in your account. Good risk management means having the right position size, knowing how to set and move stops, and taking the risk/reward ratio into account. A solid money management plan will allow you to build a portfolio that won't make you lose sleep.
It is important to note that while money management can reduce your risk, you should never over-trade. Over-trading occurs when you have too many open positions or risk a disproportionate amount of money on a single trade, exposing your entire portfolio to excessive risk. In order to avoid over-trading, it is imperative to stick to a trading plan and follow the discipline of a pre-planned strategy.
Most new traders are notorious for overtrading, which is often caused by a failure to control emotions such as greed, fear and excitement. Although traders can make huge profits by opening a large number of positions, losses can be equally devastating. A prudent way to limit losses on all positions is to set a cap on the amount of capital you risk at any one time.
For example, if you have 25 contracts open at the same time, even though you risk 1% on each contract, (and almost anything can happen in the cryptocurrency market) all 25 trades could go against you at the same time and result in a significant loss of 25% on your portfolio.
In addition to the risk per trade, you should also consider the cumulative amount of risk in your entire portfolio, which is also called your total risk capital. As a general rule, your total risk capital should be less than 10% of your portfolio, which means that if you risk 1% of your portfolio per trade, the maximum number of open contracts is 10.
Last words
In contract trading, the risk of liquidation is a problem that every investor will face, so investors should learn how to avoid liquidation. This article introduces the reasonable setting of leverage ratio, setting stop loss points, and fund management to reduce risks. These are all effective risk control measures that can help investors obtain more stable returns in contract trading. At the same time, before conducting contract trading, it is recommended that investors should understand the Bitget platform rules, market trends and other related information to make accurate market predictions.
Giving roses to others will leave a lingering fragrance on your hands. Thank you for your likes, attention, and forwarding! I wish you all financial freedom in 2025!
To put it bluntly, playing in the cryptocurrency circle is a contest between retail investors and bankers. If you don’t have cutting-edge news and first-hand information, you can only be cut! If you want to make plans together and harvest the bankers together, you can follow Brother Liang. Like-minded people in the cryptocurrency circle are welcome to discuss together~
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