In the crypto space, contracts, using 1000U at 10x leverage versus 2000U at 5x leverage, what's the difference? The difference lies in the margin + the different impact on the liquidation price! Crypto contracts + the correct way to open: In March 2025, in one month, I made nearly 200,000U from a principal of 4940U, quadrupling my investment! My method of trading contracts is simple and suitable for everyone! Insights on trading digital currencies, reading this article will benefit you for ten years!
1: The importance of mindset, funding channels, and the amount of capital should never be underestimated. There are many meaningful things in life that need to be done. Ask yourself, when you are trading and staring at market changes, have you neglected your loved ones, slacked off on your job, or become furious due to price fluctuations... Wealth is always just a symbol; sometimes it gets bigger, sometimes it gets smaller. That's all there is to it. In the future, we will all grow old and eventually die, and the next generation may continue to be emotionally affected by market changes... Imagine if we only had one day left in our lives, would you still care about this? Imagine when our souls leave our bodies and enter a transient space-time, do you not find it excessive and ridiculous to face those expressions of joy or sorrow due to price fluctuations? If your mind is only filled with profit and loss, what is the value you place on your life? Haha, I digress. Not being overly joyous about gains and not being fearful and helpless about losses is the essential difference between beginners and veterans. Generally, those who make money are either clueless or highly knowledgeable. It’s because the ignorant are fearless, and it’s the result of accumulated experience. If you don't have a lot of money and time to accumulate experience, controlling your mindset is a necessary preparation before entering the market. Where does the trading capital come from? If it is idle funds, that’s fine, but if it’s money for buying a house, getting married, or raising children, the psychological impact is huge; using pressured funds is the worst taboo. Once capital has pressure, the mindset will distort. You may panic and exit due to normal market fluctuations, only to realize later that you were in a very favorable position. You may also end up going all-in at the wrong time due to the limited time of fund usage, ultimately losing everything. As for capital amount, consider this: what’s the feeling of losing 10,000 with 100,000 versus losing 10,000 with 20,000? Can you control that feeling during trading? Many investments need to be long-term or medium-term. It’s normal to see profits and losses in the process. If you see a loss and immediately close, or chase after a rise, what will be the result? You can imagine it.
2: The most important experience in trading cryptocurrencies: Experience 1: Reasonably control your position. I list this as number one because only by reasonably controlling your position can you have a stable opportunity for profit; otherwise, your account will only fail. Generally, enter the market with 10% of your funds. If your account has only 10,000 Tether, then each time you enter a position, it's best to control your funds within 3,000 Tether, regardless of whether it's long or short. In good market conditions, when entering a profitable position, you can add one lot at a time, but do not exceed a 30% position. Experience 2: Set a stop loss before entering. Taking Bitcoin as an example, generally 40 points is appropriate, or below the support point or above the resistance point. Why set a stop loss? I’ll give an example: I have a client who opened an account with 10,000 Tether and did well over two months. He never set a stop loss for his trades, which indeed turned many trades that should have stopped into profits, resulting in a gain of over 5,000 Tether, doubling his account. Later, during a big surge, he had a sell position and resolutely did not set a stop loss, and he ended up losing over 6,000 Tether. It’s not worth it! Not setting a stop loss means that each trade could lead to account death. The way of trading in the crypto space: The way of trading is that the strong are easily broken. Only by being extremely soft and gentle can one traverse the world. Among all things, none is as soft and weak as water, yet the best is like water. Success equals small losses plus many small profits, accumulated many times. It is simple to avoid large losses; prioritize survival. When there is danger that hinders this principle, abandon all other principles. Because, regardless of how many 100% excellent performances you have had in the past, as long as you incur a single 100% loss, you will have nothing. The way of trading is to maintain an unbeaten position and attack to win against the enemy. A loss of 50% on 1 million becomes 500,000, but to increase 500,000 to 1 million requires a 100% profit. Each success will only take you a small step forward, but each failure will take you a large step back. It takes an hour to walk from the first floor of the Empire State Building to the top, but it only takes 30 seconds to jump off the roof. The way of trading lies in patiently waiting for opportunities, patiently waiting for the most favorable risk/reward ratio, and patiently grasping opportunities. In a bear market, there are always some institutions holding other people's money, struggling to find opportunities even if there’s only a tiny chance, seeking a breakthrough to solve their problems. We are holding our own money, so we should cherish it even more. Do not blindly try to pick a bottom, and do not blindly trade at the bottom. You must know that both the bottom and the top are the areas where it is easiest to lose a lot of money. Bollinger Bands is a simple yet powerful technical indicator, consisting of the middle band (moving average) + upper band (resistance line) + lower band (support line), suitable for beginners to quickly determine buy and sell points.
1. Core Principle of Bollinger Bands Middle Band (20-day moving average): Reflects the direction of the short-term trend (upward/downward).
Upper Band (Resistance Line): Middle Band + 2 times the standard deviation (usually the price peak).
Lower Band (Support Line): Middle Band - 2 times the standard deviation (usually the price trough).
Core Rule: The price fluctuates between the upper and lower bands most of the time (approximately 95%). Exceeding the range indicates overbought or oversold.
Narrowing Channel → Imminent market change (big rise or big drop); Expanding Channel → Trend continuation.
2. The 3 simplest but effective trading strategies
1: Buy at the middle band during a trending market.
Condition: The price is in an uptrend (middle band upward). The price pulls back from the upper band to near the middle band.
Operation: Buy near the middle band, set stop loss below the lower band. Case Study: In the uptrend of BTC, each pullback to the middle band is a buying opportunity. Strategy
2: Bottom fish when touching the lower band (oscillating market)
Condition: The price is oscillating near the middle band (no clear trend). The price drops to the lower band, and RSI/MACD shows oversold (optional).
Operation: Buy near the lower band and sell when it rebounds to the middle or upper band. Case Study: Buy at the lower band and sell at the upper band during ETH's sideways period for repeated arbitrage. Strategy
3: Escape the peak when breaking the upper band (extreme market)
Condition: The price continuously rises, breaks through the upper band, and RSI > 70 (overbought). The Bollinger Bands are widely opened (price fluctuations are severe).
Operation: Reduce holdings or take profits near the upper band to avoid getting trapped by chasing highs.
Case Study: During the crazy rise of BTC in 2021, it plummeted multiple times after breaking through the upper band.
3. The 3 Major Taboo of Bollinger Bands
1: Do not bottom fish when the price hits the lower band during a downtrend, even if it touches the lower band. It may continue to fall. Taboo
2: Ignoring trading volume is taboo; when the price breaks through the upper/lower band, it must be accompanied by increased volume, otherwise, it may be a false breakout.
3: Over-reliance on Bollinger Bands is suitable for trending + oscillating markets, but may fail during unilateral surges or drops; it should be combined with indicators like MACD and RSI.
4. Practical Case Study (BTC 4-hour Chart) Uptrend: Price runs along the upper band, buy when it pulls back to the middle band. Sideways: Buy at the lower band, sell at the upper band. Downtrend: Middle band down, do not bottom fish when it touches the lower band, wait for the trend to reverse.
5. Summary: The simplest but most stable usage
Trending Market → Buy at the middle band, reduce holdings at the upper band.
Oscillating Market → Buy at the lower band, sell at the upper band.
Extreme Market → Do not chase after breaking the upper band and do not bottom fish when breaking the lower band.
