First, find promising coins, invest half of your capital, and don't sell; hold at least for six months or a year. Second, engage in swing trading, using the remaining half of your capital to buy low and sell high continuously to earn profits.
Specifically, how do you buy low and sell high? I have summarized a simple trading system within my complete trading system, which is called the simple trading system. The term 'simple' means that anyone with normal intelligence can learn it in half an hour and become proficient in about a week. This is because it uses only two tools: one is pivot points, and the other is trend lines. 'Immediately use' means that entry and exit points are clear at a glance.
For friends interested in using a simple trading system immediately, feel free to contact me separately.
With a bull market, there is also a bear market. If in a bear market, you still cling to old thoughts—buy low and sell high—you will often suffer severe losses. So, is there a good solution?
The solution is to short. First, you can use leveraged trading to short, using a 1x position. For specific operations, you can ask customer service. Second, use low-leverage contracts, setting the contract multiplier to 1 and shorting the entire position.
Specific shorting points are still based on the simple trading system.
The simple trading system is something I summarized over two months. In addition to the advantages mentioned above, it has the following benefits:
1. Avoid human weaknesses, namely greed and fear. Be clear on buy and sell points—if it’s time to buy, then buy; if it’s time to sell, then sell!
2. Applicable to all coins (including mainstream coins and altcoins).
3. Applicable over a wide range of timeframes (15-minute charts and above are acceptable).
4. Avoids the dullness of indicators.
Finally, let me emphasize: in a bull market, focus on spot trading and do not touch contracts! The simple trading system can be summarized in four words: simplicity is the ultimate sophistication. I hope everyone does not underestimate it because it reveals the rules of financial trading.
The bottom line that must be adhered to in contract trading.
Contract trading is extremely risky. The essence of making money under high risk is to manage risk well. This means earning more when you make a profit and losing less when you incur losses; this principle applies even more in contract trading. Therefore, I will first talk about the importance of risk management in contract trading as a whole, and then discuss a few important risk management items individually.
It can be said that making money from contracts is neither easy nor difficult. Earning a profit once or twice is easy; the difficulty lies in making stable profits over the long term. In the face of the market, we are all small players; we should set our expectations lower, and if we see profits, that's enough—don’t pursue win rates, don’t aim for the absolute highs and lows, and don’t think about getting rich quickly. Opening a position is normal, whether it's right or wrong; don’t let that affect your mindset, just set your stop loss in time. If you earn less once, strive to earn more times, take some time to accumulate slowly, and absolutely do not rush. These thoughts are like the sword of Damocles, which can bring potential disaster in a certain market condition.
In the end, the nature of people in the trading market boils down to the words greed and panic. To make money, one must find ways to overcome these human weaknesses—do not be greedy when you shouldn't be, and do not be afraid when you shouldn't be.
It is important to stick to your own thoughts. The cryptocurrency market is still quite small, and there aren't many trading counterparts. The fundamental reason you can make money is adherence to personal thought; if you just follow the crowd, being able to avoid losses is already good, but making money is as difficult as climbing to the sky.
Therefore, in contract trading, you must strictly adhere to your own trading discipline: do not be greedy, do not take chances. You must not feel complacent about profits gained from a single instance of non-compliance and must not be frustrated about missing opportunities due to following discipline. Discipline is unyielding, and discipline is the bottom line—strictly adhere to it at all times.
And all of this is to manage risks well and reduce the probability of fatal errors. If you adhere to the following points, making money will be highly probable:
1. Reduce leverage
You must control the actual leverage of your position to not exceed 2-3x; ideally, it should be around 1x. Furthermore, if using a full position model, be sure to set both take profit and stop loss to prevent total liquidation during significant fluctuations like on September 25.
2. Learn to set stop losses.
This point is very important, let me reiterate: the money that retail investors lose is not due to being stopped out, but rather due to liquidation. Market fluctuations are inherently unpredictable; those who make money generally earn more when they are right and lose less when they are wrong. Stop losses help you lose less when you are wrong. Therefore, retail investors must also recognize their mistakes promptly, set stop losses, and must not hold onto losing positions. Set a loss percentage you can tolerate, for example, 15% or 30%, depending on your situation. Once you hit your maximum loss percentage, do not rely on luck to wait it out, nor should you think that since you've already lost so much, you might as well hold on. In short, no matter what, you must set stop losses. You might not feel it once or twice, and sometimes you might think you shouldn't have stopped out, but over time, you'll taste the benefits. For example, before September 25, if you kept going long, although it’s easy to hit your stop losses and feel frustrated each time, looking back at how many people got liquidated with 2-3x leverage that night, you should be glad your stop loss was wise. In short, a stop loss is just cutting a bit of flesh; not setting a stop loss is equivalent to suicide.
3. Reduce frequency
This doesn't need much explanation; everyone should understand that the more you trade, the more mistakes you make. If you happen to incur large losses when making mistakes, it can be even worse. So, in trading, strive to do the right things, reduce trading frequency, and try to seize high-probability opportunities to minimize mistakes and losses. This is beneficial for both profit generation and mental adjustments.
4. Capital management
Capital management is the most important aspect of trading in my opinion. A good capital management strategy can effectively protect your principal, significantly reduce drawdowns, preserve profits, and ultimately multiply your risk tolerance. Capital management determines whether you can make money and is the lifeblood of surviving in the trading market for the long term.
Here are a few disciplines to mention separately: (1) Always keep your principal from being fully invested. Even leaving 10% in cash can be appreciated in extreme risk situations. I generally keep 10-20% of my funds in cash and occasionally engage in short-term altcoin trades, typically holding positions for less than 24 hours; (2) Separate contracts from spot trading to ensure risk isolation. The spot portion should not involve any leverage; leverage trading in cryptocurrencies is also prohibited; just profit from the appreciation of the spot. The contract portion can account for 20-30% of total funds; in very certain trend markets, it should not exceed 50%. Use low-leverage strategies in the contract portion, anchoring to cryptocurrency-based profits. Once you achieve stable profits in the contract market, the cryptocurrency-based profits can also be quite considerable; (3) Avoid overly dispersing your capital. Concentrate your funds into a few relatively strong coins without spreading too thin, minimizing the number of trading targets. For example, don’t think about concurrently opening contracts for Bitcoin, Ethereum, Ripple, and Litecoin—that's something only experts do, aiming at maximizing profits. As retail investors, we should prioritize returns instead of maximization, and trading too many targets will only increase risk without amplifying profits. Therefore, it’s best to concentrate your efforts based on improving win rates; this approach will likely yield profits much faster than spreading funds across several targets.
5. Reflect frequently and summarize often.
The entire trading process has very few steps. Determine the market direction—find entry points—confirm position size—add to positions based on market conditions—set take profit and stop loss. It basically involves these few tasks. After completing a trade, reflect frequently. In the entire trading process, if you identify where you are weak, focus on that aspect, ensuring you have discipline to follow and execute at different trading stages, summarize successful experiences and lessons learned in trading, and with long-term persistence, you will surely reap rewards.
The above is what I want to express about contract trading. I haven’t discussed the techniques and strategies for opening positions but have chosen these seemingly common thoughts and concepts. It’s not because techniques and strategies are unimportant, but I believe these foundational thoughts are more important, more practical, and must be mastered. They are like the foundation of a building; only with a solid foundation can the upper floors be beautiful. Therefore, after understanding these basic principles, you can also possess certain technical analysis skills and master some order placement techniques and strategies, and the cryptocurrency market contracts will be your cash machine.
Strong recovery, assets doubled! Follow the trend closely, layout in advance, and easily reap large profits.
Keep an eye on: CROSS AVAAI.
