Half a year ago, I conducted an experiment with my exchange's small account using a "Contract Long-Short Hedging Strategy". The initial investment was 3000 USDT, and so far, the profit has reached 230%.
3000 USDT has turned into 10200 USDT.
What is the contract long-short hedging strategy?
In simple terms, "contract long-short hedging" means opening two positions simultaneously: a Bitcoin long position (bullish) + an Ethereum short position (bearish), with both positions having the same leverage and size, differing only in the type of cryptocurrency and direction.
Specific operation method:
From the 3000 USDT capital, split into two trades of 500 USDT each: a 500 USDT long position in Bitcoin with 20x leverage, and a 500 USDT short position in Ethereum with 20x leverage, both set to full margin mode. The core idea is to profit from the "difference in the price fluctuations of the cryptocurrencies".
Profit principle: Bitcoin and Ethereum tend to move in sync, but the degree of their price changes can differ (e.g., Bitcoin rises by 3%, Ethereum rises by 2%), the difference in the long and short positions (1%) becomes the profit; if the direction is judged incorrectly, only the difference in loss is incurred, thereby avoiding liquidation.
Dealing with extreme market conditions: Reserve 2000 USDT as backup funds to handle unilateral market movements (e.g., Bitcoin does not rise while Ethereum rises), after adding to the position, wait for a correction to break even. Additionally, both rarely experience significant reverse price movements, making the risk manageable.
Bull and bear market adaptation experience:
Bull market: Bitcoin rises first, and long positions can profit early;
Bear market: Bitcoin has strong downside resistance, while Ethereum experiences larger declines, leading to higher returns on short positions.
This is the key to achieving 230% profit in six months.
Cryptocurrency selection and directional judgment:
Reasons for being bearish on Ethereum: In the past two years, Ethereum has shown weakness, with no signs of reversing the trend, making short positions more stable. Future trend changes may allow for a change in direction.
Hedging cryptocurrency requirements: It is necessary to choose leading cryptocurrencies with similar value levels (e.g., Bitcoin + Ethereum). Using Bitcoin + low market cap coins (e.g., SHIB) may lead to liquidation due to disjointed price movements.
Risk warning:
"Long-short hedging" is not a guaranteed profit strategy; it relies on personal experience and judgment: correct judgments amplify profits, while incorrect judgments control losses. New investors are advised to test with small amounts, avoid heavy positions, and be aware that investment involves risks. @Air 安叔
