When trading contracts in the cryptocurrency market, systematic operations should be conducted from four levels: trading preparation, strategy formulation, risk control, and mindset management. Below are specific suggestions:
1. Strategy formulation: Combine trends and leverage to reduce ineffective operations.
1. Trend following strategy
Bullish trend: Take long positions when BTC retraces 10%-20% during an uptrend, for example, open a position when the price stabilizes after dropping from 50,000 USDT to 45,000 USDT.
Bearish trend: Short when ETH rebounds to a key resistance level (such as the MA30 line on the 4-hour chart).
Technical indicators assistance:
A golden cross above the MACD zero line is a buy signal, while a death cross below the zero line is a sell signal.
When the Bollinger Bands open up, and the price moves along the upper/lower bands, you can open positions in the direction of the trend.
2. Leverage usage principles
Beginner advice: Start with 1-5x leverage, with each position not exceeding 10% of total capital.
High leverage scenario: Only use more than 10x leverage when the profit-loss ratio exceeds 3:1, and combine it with very low position sizes (e.g., 2% of total capital).
Leverage formula: Liquidation price = opening price × leverage / (1 + leverage × maintenance margin rate). For example, for a 50x leverage long position on BTC, with a maintenance margin rate of 0.5%, the liquidation price would be 48,543 USDT.
3. Arbitrage and hedging strategies
Inter-period arbitrage: Hold contract positions with different expiration dates simultaneously to capture basis change profits. For example, when the price of a weekly contract is lower than that of a quarterly contract, buy the weekly and sell the quarterly contract.
Options hedging: Buy put options while holding long contracts, so that if the price drops, the option gains can offset the contract losses.
2. Risk control: Set stop-loss and take-profit levels to avoid emotional trading.
1. Stop-loss strategy
Fixed point method: For example, if DOGE's current price is 0.1 USDT, set the stop-loss at 0.095 USDT (5% loss).
Dynamic tracking method: When BTC long positions rise from 50,000 to 55,000 USDT, move the stop-loss price from 48,500 to 53,000 USDT to protect unrealized gains.
Technical indicators assistance: Set stop-loss levels based on support levels, such as triggering a stop-loss when BTC drops below the MA30 line (49,500 USDT) on the 4-hour chart.
2. Position management
Position allocation strategy: Divide funds into three parts, using only one part for each position, keeping the remaining funds as a risk buffer.
Incremental position testing: Treat positions in the same direction and currency pair independently, ensuring that only the margin of the corresponding position is lost in the event of liquidation, avoiding total liquidation.
3. Avoid high-frequency trading
- Daily trades exceeding 10 times can lead to monthly fees as high as 15%-30%. Data shows that among users with over 50 trades in a month, 92% incur losses.
4. Mindset management: Stay calm for long-term survival.
1. Emotion control
Prohibit revenge trading after losses, adhere to preset strategies. For example, if the stop-loss line is set at 5%, then close the position immediately when the price hits the stop-loss level, without delaying due to the 'holding position' mentality.
Record trading logs and analyze the decision basis for each trade (such as entry price, stop-loss price, target price, holding time), summarize win rates and profit-loss ratios weekly.
2. Long-term perspective
Professional traders usually have a win rate of only 55%-60%, with the core of profitability being 'keeping monthly losses within 5%.
Set the target for beginners as 'monthly loss ≤ 5% for three consecutive months,' rather than pursuing high returns.
3. Continuous learning
Pay attention to market dynamics (such as policy changes, major project updates) and adjust strategies in a timely manner. For example, after the approval of Bitcoin spot ETFs in 2024, if market sentiment turns optimistic, consider increasing long positions appropriately.
