In the crypto circle, opening a contract with 1,000 USDT at 10x leverage is different from opening with 2,000 USDT at 5x leverage. What’s the difference?
The difference lies in your margin, which affects the liquidation price!
The correct way to open contracts in the crypto circle:
In March 2025, in just one month, I used a capital of 4,940 USDT to earn nearly 200,000 USDT, a full fourfold increase!
My approach to trading contracts is very simple and applicable for everyone!
Insights on digital currency trading in the crypto circle; this article will benefit you for ten years!
1: The importance of mindset, funding channels, and capital amount.
Never take investing too seriously. There are many meaningful things in life that need to be done. Ask yourself, when you are trading, when you are staring at market changes, have you ever thought about whether you have neglected your loved ones, whether you have slacked off on your job, whether you have lost your temper because of price fluctuations... Wealth is always just a symbol; sometimes it grows, sometimes it shrinks. That's all. In the future, we will all grow old and die, and those who come after may continue to be emotionally swayed by market changes... Imagine, if you only had one day left in your life, would you still care about this? Imagine, when our souls leave our bodies and enter a mystical space-time, don't you find it excessive and ridiculous to face those expressions of joy or sadness due to price fluctuations? If your heart only focuses on money gains and losses, how much do you value your life? Haha, I digress.
Not rejoicing at gains or fearing losses helplessly is the essential difference between beginners and veterans. Most of those who make money are either ignorant or very knowledgeable. It is because the ignorant fear nothing, and the knowledgeable have accumulated experience. If you do not have a lot of money, energy, or 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 money, that’s fine, but if it’s money for buying a house, getting married, or raising children, the psychological impact is enormous. It is most taboo to use pressured funds. Once funds are under pressure, the mindset will distort. You may panic and exit due to normal market fluctuations, only to realize afterward that you were in a very advantageous position. You may also feel compelled to take big risks when there are no opportunities, ultimately losing everything.
Amount of capital. Let me ask, what does it feel like to lose 10,000 with 100,000, compared to losing 10,000 with 20,000? Can you control this feeling during your trading process? Many investments require a long-term or medium-term approach. It's normal to experience gains and losses along the way. If you immediately close when you see a loss and chase when you see a rise, what will the result be? You can imagine.
2: The most important experience in trading cryptocurrencies:
Experience 1: Reasonably control your position.
I list this as the first point because only by reasonably controlling your position can you have a stable profit opportunity; otherwise, your account will only lead to failure. Usually, invest 10% of your capital, if your account is only 10,000 USDT, then each time you enter a trade, it's best to keep your capital controlled within 3,000 USDT, whether it's long or short. In a favorable market, if you have a profitable position, you can increase your position gradually, keeping it within 30% of your total position.
Experience 2: Set a stop-loss before entering the market.
Taking Bitcoin as an example, it is generally advisable to set 40 points or below the support point and above the resistance point. Why set stop-loss? Let me give you an example: I have a client who opened an account with 10,000 USDT, and after two months it did quite well, never setting stop-loss. This indeed turned many trades that should have been stopped into profitable ones, earning over 5,000 USDT in total. However, during a big surge last year, they held a short position and resolutely did not set a stop-loss; this resulted in a total loss of over 6,000 USDT. It was not worth it; not setting a stop-loss means that each trade could lead to account destruction.
The trading principle in the crypto circle: the stronger the force, the easier it is to break.
Only by being extremely soft and gentle can one dominate the world. The softest in the world is like water, yet the highest virtue is like water. Success equals small losses plus various profits accumulated over time. It is simple to avoid large losses; survival should be the first principle. When there is danger that obstructs this principle, abandon all other principles. Because no matter how many 100% outstanding performances you had in the past, if you lose 100% now, you will have nothing.
The way to trade is to defend an invincible position while attacking the enemy you can win.
A loss of 50% on 1 million becomes 500,000, while an increase from 500,000 to 1 million requires a 100% profit. Every success only takes you a small step forward, but every failure can set you back a large step. 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 to trade is to patiently wait for opportunities, patiently wait for the most favorable risk/reward ratio, and patiently seize opportunities.
In a bear market, there are always some institutions that, even with a tiny chance of success, struggle desperately to find opportunities to break free from their predicament with other people's money. We are using our own money and should cherish it even more. Do not blindly test the bottom, and especially do not blindly trade at the bottom. You should know that both bottoms and tops are the areas where it is easiest to lose a lot of money.
The Bollinger Bands are a simple yet powerful technical indicator composed of the middle band (moving average) + upper band (resistance line) + lower band (support line), suitable for beginners to quickly judge buy and sell points.
1. The 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 standard deviation (usually the price high).
Lower band (support line): Middle band - 2 times standard deviation (usually the price low).
Core principle:
The price fluctuates between the upper and lower bands for most of the time (about 95%); exceeding the range means overbought or oversold.
Narrowing channel → A market change is about to happen (big rise or fall); expanding channel → Trend continues.
2. The simplest yet effective three trading strategies
Strategy 1: Buy at the middle band during pullbacks (in a trending market)
Condition:
The price is in an upward trend (the middle band points up).
The price pulls back from the upper band to near the middle band.
Operation:
Buy near the middle band and set the stop-loss below the lower band.
Case:
In an upward trend for BTC, each pullback to the middle band is a buying opportunity.
Strategy 2: Buy at the lower track (in a volatile market)
Condition:
The price is oscillating near the middle band (without a clear trend).
When the price falls to the lower band and RSI/MACD shows oversold (optional).
Operation:
Buy near the lower band and sell on a rebound to the middle or upper band.
Case:
When ETH is sideways, buy at the lower band and sell at the upper band for repeated arbitrage.
Strategy 3: Escape at the upper band during breakouts (in extreme markets)
Condition:
If the price continuously rises, breaks through the upper track, and RSI > 70 (overbought).
The Bollinger Bands are widely opened (price volatility is severe).
Operation:
Reduce positions or take profits near the upper track to avoid being trapped by chasing highs.
Case:
During the crazy rise of BTC in 2021, it repeatedly broke through the upper band and then plummeted.
3. The three major taboos of Bollinger Bands
Taboo 1: Trading against the trend
When the middle band points down (in a downward trend), do not buy at the lower track even if the price touches it; it may continue to fall.
Taboo 2: Ignoring trading volume
When the price breaks through the upper/lower band, it must be accompanied by increased volume; otherwise, it may be a false breakout.
Taboo 3: Over-reliance
Bollinger Bands are suitable for trending + volatile markets, but may fail during one-sided surges or drops, so they need to be combined with indicators like MACD and RSI.
4. Practical Case (BTC 4-hour chart)
Upward trend: The price runs along the upper track, and the pullback to the middle track is a buying opportunity.
Sideways consolidation: Buy at the lower track and sell at the upper track.
Downward trend: The middle band points down; do not buy at the lower track, wait for a trend reversal.
5. Summary: The simplest yet most stable method
Trending market → Buy at the middle band, reduce positions at the upper band.
Volatile market → Buy at the lower band, sell at the upper band.
Extreme market → Do not chase after breaking the upper band, do not buy at the lower band.
Still the same saying, if you don't know how to trade in a bull market, click on the old blogger's avatar, follow, and get free sharing of bull market spot planning and contract strategies.