Guide to violent rolling positions from 500U to 50,000U: 3-step breakdown of 'small fund leverage fission' (including position management formula).
I have practiced this method over ten thousand times, achieving a high success rate of 98%! Last month in March, I earned 120,000U in just one month!
1. Initiation phase (500U → 2000U): Use '10% position + 10x leverage' to tackle new coins.
Core logic: Always take 50U (10% of principal) as trial and error, locking single losses within 5U (stop loss at 10%).
50U x 10 times leverage = 500U position, target 20% increase (earn 100U).
In August 2025, HTX will launch BOT, using 50U with 10x leverage, buying the dip at 15%, gaining 30% in 3 hours, earning 150U, rolling positions to 650U, and repeating 8 times to reach 2100U.
Avoid emotional trading.
2. Explosive period (2000U → 10,000U): Switch to '20% position + 5x leverage' to chase whale hotspots.
In September 2025, the DeFi 2.0 leader FLX will launch, with 400U principal and 5x leverage (2000U position), stop loss at 5% (loss of 20U), target at 15% (profit of 60U), gaining 40% in 3 days, directly earning 1,600U, rolling positions to 3,700U.
After a profit of 10%, immediately move the stop loss to the cost line to ensure no loss of principal.
3. Ultimate phase (10,000U → 50,000U): 'Hedging + ladder rolling' to prevent black swan events.
After each profit, withdraw 30% to hold in BTC spot, and reinvest 70% according to the 'halving position method'.
Operational steps.
1. After receiving 10,000U, use 3,000U to buy BTC (anti-drop anchor).
2. Split 7000U into 7 orders; open ETH perpetual with each order being 1000U (2x leverage = 2000U position).
3. Stop loss at 3% per order (loss of 30U), take profit at 5% (profit of 50U), achieving profitability in 4 out of 7 trades will break 20,000U.
Critical detail: When total assets drop more than 15% (for example, from 30,000 to 25,500), immediately close 60% of the positions, reinitiate only after triggering the '20% profit protection line'.
Trap 1: Full position on a new coin (someone once went all in 300U on MEME coin and got liquidated for 200U after one hour).
Trap 2: (Falling 15% without a stop loss and instead adding positions, eventually losing principal).
Trap 3: Running away after making small profits (e.g., earning 1500U from 1000U and withdrawing 1200U, missing subsequent 10x explosions).
Three iron rules:
1. Use 500U as if it were 50U: do not exceed 10% of the principal when opening a position, keeping the 'zero-risk' level below 0.5%.
2. Only enter when BTC stabilizes at 68,000U: When the market is stable, the probability of explosive growth in hot coins increases threefold.
3. Profit = position × odds × discipline: The first two determine the upper limit, while the last determines whether you can survive to '50,000U'.
In the cryptocurrency market, 500U is not the principal, but rather a 'ticket to leverage through discipline'.
Foolproof cryptocurrency trading method: Rolling positions for 3 months to multiply by 300 times, easily earning 30 million.
Since the Federal Reserve's interest rate cuts, many newcomers wanting to enter the cryptocurrency market have emerged. The crypto market is a place of survival of the fittest. The threshold is low; everyone can enter the crypto market, but not everyone can make money in it. If you plan to enter the crypto market, remember that it is not a place for overnight wealth, but a field that requires long-term accumulation and continuous learning.
Many people come to the cryptocurrency market with dreams of overnight wealth, fantasizing about turning a few thousand into a capital of 1 million. While some have succeeded, the vast majority can only achieve this through 'rolling positions.' Although rolling positions are theoretically feasible, they are by no means an easy path.
Rolling positions are a strategy suitable for use only when significant opportunities arise, not for frequent operations. Just capturing a few such opportunities in a lifetime can accumulate wealth from zero to tens of millions. And having tens of millions in assets is enough for an ordinary person to join the ranks of wealthy individuals and achieve financial freedom.
When you truly want to make money, do not focus on how much you want to earn or how to earn so much; do not think about targets like several million or even hundreds of millions. Instead, start from your actual situation and invest more time to accumulate. Simply boasting will not bring substantial change; the key to trading is to recognize the size of opportunities. You cannot always trade lightly or heavily. You can practice with small amounts of funds, and when real big opportunities arise, go all in. When you make the transition from tens of thousands of principal to a million, you will have unconsciously learned some thoughts and logic about making big money. At that point, your mindset will become more stable, and future operations will be more like successful repetitions from the past.
If you want to learn about rolling positions, or how to grow from a few thousand to millions, then pay close attention to the following content.
1. Judging the timing for rolling positions.
Rolling positions should not be initiated without certain backgrounds and conditions for greater success. The following four situations are most suitable for rolling positions:
(1) Breakthrough after long-term consolidation: When the market has been in a sideways state for a long time and volatility drops to a new low, once the market chooses a breakout direction, consider using rolling positions.
(2) Buying the dip during a major drop in a bull market: After a significant rise, if the market suddenly experiences a major drop, consider using rolling positions to buy the dip.
(3) Breakthrough at the weekly level: When the market breaks through significant resistance or support at the weekly level, consider using rolling positions to capture breakout opportunities.
(4) Market sentiment and news events: When market sentiment is generally optimistic or pessimistic, and there are significant news events or policy changes that may affect the market, consider using rolling positions.
Only under the aforementioned four conditions can rolling operations have a higher success rate. At other times, proceed with caution or forgo the opportunity. However, even if the market appears suitable for rolling positions, it is crucial to strictly control risks and set stop-loss points to prevent potential losses.
2. Technical analysis.
Once you confirm that the market meets the conditions for rolling positions, the next step is to conduct technical analysis. First, confirm the trend using technical indicators to determine the direction, such as moving averages, MACD, RSI, etc. If possible, combine multiple technical indicators to confirm the trend direction, as it's always good to prepare more. Next, identify key support and resistance levels to assess the validity of breakouts. Finally, utilize divergence signals to capture reversal opportunities. (Divergence signal: When a coin's price hits a new high while MACD does not, forming a top divergence, this indicates a price rebound; consider reducing positions or shorting. Similarly, when the price hits a new low while MACD does not, forming a bottom divergence, this indicates a price rebound; consider increasing positions or going long.)
3. Position management.
Once this step is complete, we move to position management. Reasonable position management includes three key steps: determining the initial position, setting up position addition rules, and formulating reduction strategies. Let me give an example to help everyone understand the specific operations of these three steps:
Initial position: If my total funds are 1 million, then the initial position should not exceed 10%, i.e., 100,000.
Position addition rule: Always wait for prices to break through key resistance levels before adding to positions; each addition should not exceed 50% of the original position, i.e., at most an additional 50,000.
Reduction strategy: Gradually reduce positions when prices reach expected profit targets. When it’s time to let go, don’t hesitate. Each reduction should not exceed 30% of the existing position to gradually lock in profits.
As ordinary people, we should invest more when opportunities are abundant and less when they are scarce. With good fortune, we might earn several million; if luck is lacking, we can only accept our losses. However, I must remind you that when you earn money, you should withdraw the principal you invested, and then use the profits to play. You can afford not to make money, but you must not lose money.
4. Adjusting holdings.
Once position management is complete, the most critical step is how to use position adjustments to achieve rolling operations.
The steps are undoubtedly just a few:
1. Choose the timing: Enter the market when conditions for rolling positions are met.
2. Open position: Open positions based on technical analysis signals and choose appropriate entry points.
3. Adding to position: Gradually add to the position as the market continues to move in a favorable direction.
4. Reduce position: Gradually reduce positions when reaching the predetermined profit target or when the market shows a reverse signal.
5. Closing positions: When the take-profit target is reached or the market shows a clear reversal signal, completely close the position.
Here, I will share my specific operations for rolling positions:
(1) Adding positions after floating profits: When the invested assets appreciate, consider adding positions, but the premise is to ensure that the holding cost has been lowered to reduce the risk of losses. This does not mean adding positions every time you make a profit, but rather at appropriate times, such as during a convergence breakout trend, add after the breakout and quickly reduce again, or add positions during trend corrections.
(2) Base position + T-trading: Divide assets into two parts; one part remains unchanged as a base position, while the other part is used for trading during market price fluctuations to lower costs and increase profits. The proportions can refer to the following three:
1. Half position rolling: Half of the funds are used for long-term holding, while the other half is used for trading during price fluctuations.
2. 30% base position: Hold 30% of funds long-term, with the remaining 70% used for trading during price fluctuations.
3. 70% base position: Hold 70% of funds long-term, while the remaining 30% is used for trading during price fluctuations.
The aim of this approach is to optimize holding costs while maintaining a certain position.
5. Risk management.
Risk management mainly consists of two parts: controlling the total position and allocating funds. Ensure that the overall position does not exceed the acceptable risk range, and allocate funds reasonably, avoiding putting all funds into a single operation. Real-time monitoring is also essential; closely observe market dynamics and changes in technical indicators, and adjust flexibly according to market changes, and timely stop losses or adjust positions when necessary.
Many people feel both fear and eagerness when they hear about rolling positions. They want to try but are afraid of high risks. In fact, the risk of this strategy itself is not high; the risk comes from leverage, but if leverage is used reasonably, the risk will not be significant.
For example, if I have a principal of 10,000, when opening a position at a coin price of 1,000, I use 10x leverage and only use 10% of the total funds (i.e., 1,000) as margin, which is effectively equivalent to 1x leverage. Setting a 2% stop loss means that if the stop loss is triggered, I will only lose 2% of the 1,000, which is 200. Even if the liquidation conditions are ultimately triggered, you will only lose this 1,000, not all your funds. Those who get liquidated often do so because they used higher leverage or larger positions, causing market fluctuations to trigger liquidation. But by following this approach, even in an unfavorable market, your losses remain limited. So 20x can roll, 30x can roll, and 3x can also roll. Even using 0.5x is fine. Any leverage can be used, but the key is to use it reasonably and control the position rationally.
This is the basic process for using rolling positions. Friends who want to learn can watch it several times and ponder it carefully. Of course, there will be different perspectives, but I only share experiences, not persuade others.
So how can small funds grow large?
Here, I must mention the effect of compound interest. Imagine if you have a coin, and its value doubles every day; after a month, its value will become astonishingly high. The first day's value doubles, the second day doubles again, and so forth; the final result will be astronomical. This is the power of compound interest. Even starting with a small amount, over time, through continuous doubling, it can grow to millions.
For friends wanting to enter the market with small funds, I suggest focusing on big goals. Many believe that small funds should frequently engage in short-term trading for quick returns, but it is actually more suitable for mid- to long-term investments. Rather than focusing on earning small profits daily, you should concentrate on achieving severalfold increases in each trade, using multiples as the measure for growth.
When managing positions, first understand the need to diversify risks; do not concentrate all funds in a single trade. You can divide funds into three to four parts, using only one part for each trade. With 40,000, divide it into four parts and use 10,000 for trading. Secondly, use leverage moderately; personal advice is not to exceed 10x for major coins and 4x for altcoins. Additionally, adjust dynamically; if losses occur, supplement with an equivalent amount of external funds; if profits occur, withdraw appropriately, ensuring you do not incur losses. Finally, increase positions, but only under the condition that you are already profitable. As your funds grow to a certain level, you can gradually increase the amount for each trade, but do not increase too much at once; transition slowly.
I believe that with reasonable position management and sound trading strategies, small funds can gradually achieve significant appreciation. The key is to patiently wait for the right timing, focusing on big goals for each trade rather than daily small profits. Of course, I have experienced liquidation too, but I still had spot gains to offset my losses. I don't believe that you have not earned a single cent from your spot holdings. My futures only accounted for 2% of my total funds, so no matter how much I lost, I wouldn't lose everything, and the amount of loss remained within my control. Finally, I hope that each of us can accumulate wealth gradually, aiming for hundreds of thousands or millions.
In the cryptocurrency market, there is a trading strategy (moving averages) that identifies buy and sell points, with a success rate of up to 95%, applicable for both spot and contract trading, simple and practical (suitable for everyone)!
No more nonsense, let’s get straight to the point.
Table of Contents
What is a moving average?
Types and formulas of moving averages.
How to add moving averages to charts.
Trading applications of moving averages.
Combining multiple moving averages.
How to choose moving average parameters.
Advantages and disadvantages of moving averages.
Summary.
The moving average line serves as the gateway to technical indicators, a must-learn technical analysis for every trading novice, and is the most widely used technical indicator in the market. In this chapter, we will explore what makes moving averages so extraordinary and how they assist investors in making 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, I will provide advice on how to adjust your moving average parameters. What is a moving average? The moving average (MA), commonly known as the moving average line, is one of the most commonly used indicators in technical analysis to help traders smooth price fluctuations, thus observing price trends more clearly. It eliminates short-term price fluctuations by calculating the average closing price over a specific time period, assisting investors in judging whether the market is in a bullish or bearish trend.
In the chart, moving averages will smooth out the fluctuations of K-line prices. So why do moving averages with larger parameters smooth prices more? This is related to their formulas, and we will next understand how moving averages are formed.
Types and formulas of moving averages.
The calculation of moving averages is based on the closing prices of K-lines over a specific period, performing either weighted or unweighted average calculations. Common types of 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 type of moving average. Here is the calculation formula for SMA:
SMA = total closing prices over n days / n.
The SMA for the current day can be calculated by summing the closing prices of the K-lines within a specific range and dividing by the number of days n. The SMA gives equal weight to all data, resulting in smoother price fluctuations.
Example:
Suppose a certain stock's closing prices for the last 5 days are: 100, 102, 101, 104, 103.
Calculation result: 5-day SMA is 102.
This type of moving average is relatively simple to calculate, but since it is based on average prices, it reacts slowly to recent price fluctuations. As n increases, the simple moving average's correlation with current conditions weakens, which may not always reflect the present situation.
2. Exponential Moving Average (EMA).
The Exponential Moving Average (EMA) assigns different weights to closing prices from different periods during its calculation, with more recent K-line closing prices receiving higher weights. Thus, the EMA responds more sensitively to price changes, and its data is closer to the market price than the SMA.
EMA is suitable for more volatile markets or when traders wish to capture short-term trends.
EMA = (Today's closing price X α) + [Yesterday's EMA X (1 - α)].
The smoothing factor α is a tuning parameter determined by the 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 the SMA as the value for the first day’s EMA.
Step 3: Start using the EMA calculation formula from the next day. Example:
Suppose a certain stock's closing prices for the last 3 days were 100, 102, 104; calculate the 3-day EMA (simplified process):
Day 1:
SMA = (100 + 102 + 104) / 3 = 102 (as the starting EMA). The next day's EMA:
α = 2 / (3 + 1) = 0.5.
Today's price = 102, yesterday's EMA = 102.
EMA = (102×0.5) + (102×0.5) = 102. The EMA for the third day:
Today's price = 104, yesterday's EMA = 102.
EMA = (104×0.5) + (102×0.5) = 103.
3. Weighted Moving Average (WMA).
Weighted Moving Average (WMA) is similar to EMA but does not use exponential decay; instead, it distributes weights linearly. WMA is suitable for moderately volatile markets where traders want to smooth prices while quickly following trends.
For example, in a 5-day WMA, Day 1's weight is 1, Day 2's weight is 2, and so forth, with Day 5's weight being 5.
Example:
Suppose a certain coin's closing prices for the last 3 days were 100, 102, 104; calculate the 3-day WMA:
Weights are 1 (Day 1), 2 (Day 2), 3 (Day 3).
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 financial markets, moving averages have many different trading applications. The roles of moving averages in trading include:
Used for trend judgment.
As references for support and resistance.
Used to identify trend reversal points.
1. For trend judgment.
Trend is one of the core aspects of trading, and moving averages intuitively reflect the direction of price trends, helping traders confirm whether the current market is in an upward or downward trend.
When the price remains above the moving average, it is highly likely to be in an upward trend.
When the price remains below the moving average, it is highly likely to be in a downtrend.
Taking the Hong Kong Hang Seng Index HK50 as an example, we can see that when the price is below the 20-day moving average and the moving average is in a downward shape, the asset price shows a clear downward trend; conversely, when the price is above the 20-day moving average and the moving average is in an upward shape, the asset price shows an upward trend.
2. As support and resistance.
Moving averages can act as dynamic support or resistance levels under different market conditions, helping traders identify potential reversal or breakout points.
From the above example with the S&P 500, we can see that when the asset price drops near the moving average, it often receives a certain level of support; when the price drops below the moving average, that moving average then becomes a resistance level.
3. Use golden crosses and death crosses to judge trend reversals.
Moving average crossover points are often used as signals for buying or selling. Common crossover strategies include golden cross (short-term moving average crosses above long-term moving average) and death cross (short-term moving average crosses below long-term moving average).
Taking the USD to JPY chart as an example, when the 10-day SMA falls below the 20-day SMA, it accelerates the decline, forming a clear downward trend; conversely, when the 10-day SMA rises above the 20-day SMA, the trend reverses, changing from a downward trend to an upward trend.
Combining multiple moving averages.
Multiple moving averages can be used together, helping traders to judge market trends more clearly.
1. Bullish arrangement of moving averages
Short-term, medium-term, and long-term moving averages are arranged in ascending order, all showing an upward tilt, indicating a strong bullish trend.
Trading Application: Consider holding long positions and adding to them when the short-term moving average corrects.
2. Bearish arrangement of moving averages.
Short-term, medium-term, and long-term moving averages are arranged in descending order and all show a downward tilt, 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 tend to be parallel and intertwined, it indicates that the market may be in a consolidation phase or is about to face a breakout.
Trading Application: Observe the direction of price breaking through the moving average entanglement and choose an entry point.
How to choose moving average parameters.
Setting parameters for moving averages is crucial in trading, as different parameters directly affect the generated trading signals. So how should we choose the parameters for moving averages?
1. Classification of moving average time periods.
Based on time periods, moving averages can generally be divided into three categories:
Short-term moving averages (5-day, 10-day).
Characteristics: Quick to react and sensitive to market changes. Suitable for short-term traders engaging in intraday trading or short-term swing operations.
Application scenarios: Capture short-term price movements, such as breakouts, pullbacks, and rebounds.
Medium-term moving averages (20-day, 50-day).
Characteristics: Balances sensitivity and stability, effectively identifies wave trends. Suitable for swing traders wanting to capture a complete trend.
Application scenarios: To judge the stability of market trends and filter out short-term price fluctuations' noise.
Long-term moving averages (100-day, 200-day).
Characteristics: Slow to react but better reflects long-term market trends. Suitable for long-term investors.
Application scenarios: Used to judge bull or bear markets and as main support or resistance levels.
2. Choose parameters based on trading style.
Intraday traders.
Recommended moving average parameters: 5-day EMA, 10-day EMA.
Reason: Intraday trading requires quick responses; therefore, short-term EMA is more suitable for capturing immediate price fluctuations.
Application: When the 5-day EMA crosses above the 10-day EMA, it triggers a buy signal; conversely, it triggers a sell signal.
Short-term swing traders.
Recommended moving average parameters: 10-day EMA, 20-day EMA.
Reason: Short-term swing trading requires a balance between sensitivity and stability; the 20-day EMA can reflect recent trends while filtering out short-term noise.
Application: Consider buying when the price stabilizes above the 20-day EMA; consider selling when it drops below the 20-day EMA.
Medium- to long-term investors.
Recommended moving average parameters: 50-day SMA, 100-day SMA, 200-day SMA.
Reason: Long-term investment emphasizes judgment of major trends; the 200-day SMA is an important bull-bear dividing line.
Application: When the price crosses above the 200-day SMA, it indicates entering a long-term bullish market, suitable for buying on dips; when the price crosses below the 200-day SMA, it indicates market weakness, and caution is advised.
3. How to choose parameters based on market characteristics.
High volatility markets (such as cryptocurrencies and tech stocks).
In markets with high volatility, use moving averages with high sensitivity, such as short-term EMA (5-day, 10-day).
Reason: EMA can reflect market changes more quickly, allowing traders to adjust strategies promptly.
Low volatility markets (such as large-cap blue-chip stocks, stable assets)
In a stable market, it is suitable to use SMA with good smoothness (20, 50, 200 days).
Reason: SMA can filter unnecessary short-term noise, allowing traders to focus on medium- to long-term trends.
Volatile markets.
During price consolidation or fluctuations, moving averages can be frequently crossed.
Recommendation: Combine multiple moving averages (such as 5-day, 10-day, 20-day SMA) to observe whether the moving averages are entangled and the direction after price breaks through the entanglement.
Advantages and disadvantages of moving averages.
Though moving averages are one of the most widely used technical indicators in financial markets, they are not flawless. Next, let’s take a look at the advantages and disadvantages of moving averages.
1. Advantages of moving averages.
Smooth price fluctuations and filter out noise.
Moving averages help smooth price data over a period, filtering out short-term price fluctuations' noise, allowing traders to focus on major trends.
Highly flexible, suitable for different time periods.
Moving averages can have parameters set according to different trading periods, from short-term (such as 5-day, 10-day) to long-term (such as 100-day, 200-day).
For example, short-term traders can choose the 5-day or 10-day moving averages to capture short-term fluctuations, while long-term investors can use the 200-day moving average to judge the bull-bear dividing line.
Provide clear trading signals.
The crossovers of moving averages (such as golden cross and death cross) and price breakout strategies can provide clear buy and sell signals. These signals can help traders establish clear entry and exit plans, reducing hesitation.
2. Disadvantages of moving averages.
Strong lag, 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 experiences rapid reversals, moving averages may lag, leading to delayed entry or exit signals.
For example, when the market rises rapidly or drops suddenly, prices may have already completed a round of fluctuations, while the moving average crossover signals may just be appearing, causing missed opportunities for optimal trades.
Unable to cope with volatile markets, leading to easy false signals.
In sideways consolidation or volatile markets, prices frequently cross moving averages, leading to frequent false signals, which can cause traders to enter and exit too often, increasing trading costs.
For example, within a volatile range, short-term MAs (such as 5-day or 10-day) frequently cross with prices, but the actual trend is not clear, leading to losses.
Difficult to capture extreme market conditions or sudden changes.
Moving averages cannot cope with sudden market events or violent fluctuations, and may miss significant trends or reversal signals.
For example, when significant news causes the market to suddenly surge or plummet, the trading signals from moving averages usually lag behind the price.
Summary
Moving averages are one of the most commonly used indicators in technical analysis, helping to judge market trends and providing trading signals by smoothing price fluctuations. They include simple moving averages (SMA), exponential moving averages (EMA), weighted moving averages (WMA), and others, useful for trend judgments, support and resistance analysis, and identifying trend reversal points. Short-term moving averages are suitable for traders who need a quick response, while medium- to long-term moving averages help capture stable trend movements. Although moving averages are easy to understand and effectively filter noise, their lagging nature and potential false signals in volatile markets require careful handling. To gain a deeper understanding and make adjustments to moving averages, one must continuously experiment and explore.
Stable compound interest management derived from over ten years of trading experience! (Applicable for both spot and contracts.)
Investing in cryptocurrencies has high returns but also high risks, and risks are everywhere. Making a wrong choice or operational error can lead to unnecessary losses. To ensure the achievement of the aforementioned return goals, it is necessary to strengthen risk awareness and take effective risk control measures. Treating positions as a reservoir, each coin is like a faucet pouring water into the reservoir, and you must control the faucet switch.
Position management.
1. Control risks from the perspective of ideas and operations.
Do not rush to buy; optimize buying through position splitting. Follow buying rules like 334, 433, etc., and enter in batches, avoiding all-in strategies.
It is essential to have stop losses and take profits when opening positions. If the price shows clear breakdowns, technical indicators form peaks, or your holding profits significantly decrease, or losses occur, necessary protective strategies must be implemented. Timely profit-taking preserves gains, and timely stop-losses prevent further losses.
2. Adhere to the principle of risk diversification.
Diversifying sectors and coins helps control risks; for each fund account, avoid holding a single type of coin but also do not diversify excessively, as this can make it difficult to respond to sudden market changes.
Reasonably allocate positions across long, medium, and short-term lines; this is akin to positioning troops in battle, where capital is your soldiers, ensuring long-term investments in Bitcoin or Ethereum are guaranteed to make profits.
Other coins should ideally be 3-5 types, with medium-term positions focusing on current hot sectors. Short-term positions should mainly speculate on explosive rises. A reasonable allocation ratio for long, mid, and short-term positions should be 5:3:2.
3. Position risk control.
Control the pace of positions; during the bottom period, keep it at 30%; increase to 50% at the end of a bear market and beginning of a bull market; confirm that the bull is coming and maintain above 70%. Always remember not to operate with a full position, as it is not enough to cope with market fluctuations.
Limit the total position. A heavy position yields high returns, but also high risks. Trading should determine positions based on market changes; in a favorable trend, you can take heavy positions; in an unstable market, reduce positions appropriately and hold a small amount of coins for flexible operations.
4. Fund management and profit management.
Reasonable profit management is the best way to retain earnings. First, we should treat the cryptocurrency market as an ATM rather than a savings account. As long as you don’t withdraw, the amount is just a number. The profits you earn must be realized, rather than continuously reinvested. Only when you put that money in your pocket is it truly yours.
Rather than rolling the money earned from this capital, at least half of the profits should be kept in the capital account. This is a reserve requirement. Of course, you can also withdraw all the profits. Even if the funds in this operational account incur losses, you still have funds to recover your losses.
Never roll your earned money and principal together. After all, nobody is perfect; everyone makes mistakes. One day, there could be a liquidation, and then you may not have a single cent left, with no chance to recover.
How to control positions when following trades.
How to manage buying positions depends on the market situation. For example, if the current market requires heavy positions, it is also necessary to leave a certain position for risk control. This chapter covers all short-term position controls.
First, let's talk about controlling positions for major coins:
Generally use 100x leverage, small positions at 2%-2.5%, normally controlled at 3-5%.
Contract liquidations are common; friends following trades must use stop losses; carrying positions is strictly prohibited.
Entry points that are not far apart can be entered directly, as exchange prices may vary.
When each trade approaches the first take-profit level, you can reduce your position or directly take profit.
Let's first take spot trading with altcoins as an example:
For a single coin, the total of three positions should not exceed 30%; hold a maximum of 3-5 different coins, with the total not exceeding 70% of the overall position (normal position).
For a single coin, the total of three positions should not exceed 20%; hold a maximum of 3-5 different coins, with the total not exceeding 50% of the overall position (conservative position).
Then use leverage as an example:
10x leverage, 2-3 layers of positions is optimal; exceeding 30% starts to pose risks, and larger positions cannot withstand a random crash, leaving too little margin for error. This is a summary of many years of experience; please take it seriously.
If increasing leverage can simultaneously reduce the position, then reducing the position can simultaneously increase leverage. This ensures alignment with cold wind.
For a single coin, the total of three positions should not exceed 30%; hold a maximum of 3-5 different coins, with the total not exceeding 30% of the overall position (normal position).
For a single coin, the total of three positions should not exceed 20%; hold a maximum of 3-5 different coins, with the total not exceeding 20% of the overall position (conservative position).
The operation of replenishing positions.
Replenishing positions is an important part of normal operations.
When buying one, you should first have a concept of how much you plan to buy. For example, if I want to buy BTC, I plan to buy 1,000U; for ETH, I plan to buy 2,000U; for ORDI, I plan to buy 500U.
Additionally, you must have a rule for the pace of buying in; generally, a three-position system is used, such as 4.3.3 or 3.4.3.
If the price starts to rise during the buying process, do not add to the position.
If all three positions are in and the price drops, do not add to the position.
1. Set stop losses. This is essential, not optional.
2. Positions added but still falling. This indicates a judgment error; reduce positions proactively and wait for a turnaround to add.
3. Turnaround replenishment. Replenishing positions should not be done indiscriminately as prices fall, as this can lead to increasingly heavy positions. Instead, wait until it turns around to add.
4. There are 2 types of replenishment nature:
One method is to reduce costs; this kind of replenishment should exit as soon as it reaches above the cost price. Of course, sometimes even after replenishing, the price may still drop, in which case follow the second rule.
Another type is to increase profits, also known as flexible positions. This part can be reduced according to your profit margin. Once the profit target is reached, exit. You can also exit based on resistance levels: first, second, third resistance levels, reducing positions in batches or all at once.
I generally regard the first position as the basic position for the base position. Of course, this isn't set in stone. In a good market, the ratio can be increased somewhat; in a bad market, keep the base position smaller.
5. The issue of inserting needles into large positions. This still relates to the overall position planning. If you find that your position was accidentally opened too large, actively reduce it; do not rely on luck!
6. Transfer position change issues.
If we have a set of 3-5 coins.
If you do not want to increase the position, you must exit one to enter another; do not enter without exiting.
If controlling positions during a drop, always reduce the weakest one.
If you do not want to increase the total position, you can reduce the holdings of weak coins or sell the weakest coin to transfer positions to strong coins.
Observe peaks and troughs to avoid risks.
Before making a trade, check Bitcoin to see if the recent major coin market is good or bad. If Bitcoin is about to drop, everything will likely suffer. If you think today’s market is dangerous and likely to drop, consider reducing or clearing your positions.
In a potentially topping market, everyone should know how to operate. Most of our losses come from here. When trading, we must first look at Bitcoin's trend and what kind of trend it is in.
In a potentially topping or already declining trend, positions should be reduced, and regular trading positions should also be reduced to ensure alignment with the broader trend. Wait for the price to reach key support or for a reversal before increasing positions again.
In potentially bottoming markets, talk of buying the dip is unnecessary; the bottom is gradually established. Short-term bets on rebounds should control positions and maintain proper stop-loss and profit-taking levels unless a very strong reversal signal appears.
Upon entering a rebound or upward trend, you can trade normally in the early stages, but as time goes on, be more cautious, especially at key pivot times, gradually reducing position sizes and trading frequency.
Judging the time period in which the market is located is essential for every investor's market intuition. If you cannot even understand whether the overall market has risks or how significant those risks are, it indicates a severe lack of basic knowledge, which cannot be covered by a single article's brief explanation. Such friends should take the time to learn the basic knowledge of market analysis, as Bitcoin's market is the most standard and straightforward among all cryptocurrencies.
The relationship with Bitcoin.
The Bitcoin market is clearly in an upward trend and has not reached key pressure points. This is the kind of market that Teacher Jin excels in; it can be a bit more casual but should not be reckless.
Tip: Bitcoin is still in an upward trend today and is relatively stable. Everyone can safely hold and buy.
When Bitcoin encounters key resistance areas, first analyze the key resistance determined earlier, noting the consensus on key resistance. After reaching this point, be cautious with long positions in altcoins, and avoid opening positions near Bitcoin's peak. For short-term trades, wait for a pullback or breakout for the safest approach. For mid- to long-term positions, consider reducing exposure or exiting.
Tip: Bitcoin encounters key pressure; pay attention to breakout situations. Before breaking through, avoid long positions as much as possible and focus on shorting with smaller positions.
When Bitcoin encounters key resistance and pulls back, after the major coin stabilizes at support, consider short-term long positions, lowering profit expectations while trading small, ideally reducing the number of trades and coins.
Tip: Bitcoin is facing a pullback to support; the overall trend is upward, consider buying for a rebound, but if the overall trend is downward, trade small for rebounds.
Bitcoin has fallen to critical support; analyze whether it may bottom out.
In cases of uncertainty regarding the bottom, do not open high long positions. If you do, you must add a stop loss to it, and it is best to reduce the number of trades and coins.
Tip: Bitcoin has reached a critical support level; breaking below may lead to a collapse. Everyone should primarily focus on shorting, making few long positions.
Analyze the market that may be bottoming, buy in batches, and ensure that stop losses for incorrect predictions are within your tolerable range.
Tip: Bitcoin has fallen to a critical support level, and there is a possibility of a technical rebound; you can bet on a rebound. For prudent friends, wait for bottom patterns to emerge.
In a volatile Bitcoin market, pay attention to the size of Bitcoin's fluctuation range. Do not take long positions near the upper limit of the box; only enter long positions after a breakout or consider short positions in the middle or end.
Tip: Bitcoin is in a box-like consolidation, currently in (head/middle/tail), with risk decreasing from high to low.
Bitcoin has repeatedly tested key support in a volatile market, indicating that it may not hold, and it is best to pause short-term trades and exit mid- to long-term.
If the daily line level tests a key support level more than four times without a significant rebound, maintaining a volatile trend or showing lower highs on rebounds indicates a strong desire for a correction.
Tip: Bitcoin is extremely weak; avoid opening long positions, and consider small short positions in batches.
Trading is not about getting rich in one go, but rather reasonable profits that allow for long-term, stable, sustainable, and high-probability earnings, thus enabling continuous wealth accumulation.
Professionals create value; details determine success or failure. If you currently feel helpless or confused while trading in the cryptocurrency market, I hope my sharing can provide you with some inspiration and help!
