Disclaimer: The content of the article is only a personal opinion and does not make a final conclusion. The content of this article is mainly aimed at price research in short-term trading, and does not include large-scale price cycles. Friends who have different views are welcome to correct and communicate.
There are many details that determine profit and loss in short-term trading. One of the more important factors is price. Because the price varies with the trading volume at different times, it will fluctuate upward and downward. At this time, it is appropriate to buy and sell. The bidding price will be the key to whether the transaction can be profitable.
Many people do not pay attention to this aspect when doing transactions. Take contracts as an example: some people do not pay attention to the price at all when doing contract transactions. They just start to open a position directly at the current price after making a rough judgment on the direction. . First, there is no plan; second, there is no risk awareness, and there is no stop-profit or stop-loss. In this case, if the leverage is low, the position holder may be under less pressure; if the leverage is high, the position holder will generally experience greater pressure. In the end, most will suffer heavy losses.
There are also some people who make some plans before trading. After this group of people establish a direction, they usually set a target price and choose to trade. However, their prices are often not satisfactory. Some people analyze it based on the trend or other methods. Some people come up with a number based on their feelings, or choose to use integers, some choose technical indicator lines as the price standard, and others choose the previous high and the previous low as the price standard. However, most people do not control the buying and selling prices and leverage multiples very well, which leads to frequent stop losses or profit retracements in short-term transactions (especially high leverage), and even greater losses.
The following describes a commonly used technique in the form of pictures and texts. Please read the pictures carefully:
Let’s take a look at this picture first. This is the counterparty price chart of the ETH/USD perpetual contract at around 1 a.m. on March 14. I adjusted the price level to 10 (upper right corner), and the ETH price was around 1,660 at that time. On March 15, my judgment on the direction of ETH was bearish, and I placed a short order here.
According to the pending order data in this picture, the gap is near 1760 and the limit is below 1800 (the spot price gap of ETH/USDT was also here at that time, no screenshot), so my pending order price was set near this, because I was afraid that the price would deviate a little and cause the pending order to be placed. Unable to complete the transaction, I lowered the pending order price a bit and set it at 1753, and set the stop loss at 1805 (many times my pending orders often failed to be completed because they were a little too high or too low, so I kept the habit of lowering the price a little).
By the way, I would rather miss the overnight order than place it wrongly. If I can place it high, I will never place it low. Don’t limit your imagination to 1% or 2%. Even if you miss it, there will be opportunities later, but it won't necessarily happen if you make the wrong decision.
Here is the ETH/USDT spot price rival at around 8pm on March 14th. At this time, the ETH price has reached around 1700. According to this pending order data, the gap is still around 1760. It is in a volatile trend from early morning to daytime. My The pending order was not filled, and my view remained the same, so I did not move. It only started to rise a little in the evening, and the pending order was filled around 9 o'clock.
This is the ETH/USDT spot counterparty order at around 10pm on March 14. According to this data, if the price is above 1750 after the short order 1753 is opened, there will still be some room for shock. At that time, I wanted to close the position at the opening price and move the price higher. After watching the price for a while, the price kept fluctuating above the opening price. I felt that the problem was not serious, so I stopped watching.
Because my leverage ratio is high, this transaction is a bit risky for me. It lasted for an hour or two with small floating losses, and the overnight stop loss price was relatively high at 1805. In normal operation, I will wait until the range is widened and there is a floating profit, and then the stop loss price will be set at the opening price. In this way, even if the loss is stopped, there will be no loss, which greatly reduces the transaction risk (of course, it will also increase the risk of being stopped).
After opening a position, you need to consider the price at which to close it. If it is a short-term transaction, we look at the pending order gap on the left side of the picture above. Based on the pending order gap, we can judge that the short-term first target price is around 1660-1680. In order to avoid the price being too low to close the position The position will lead to a profit retracement. I suggest that the first level be chosen first near 1680 to close the position. As I write this article, the price of ETH has fallen back to around 1660 during the day on March 15.
The summary of this technique is that you use the counterparty's pending order data to determine the appropriate price for buying and selling. During the transaction, you need to look at both the contract and spot trading pairs' pending order data to make a comprehensive judgment. Take ETH as an example: If the market fluctuation is small and there is not much pending order data, the small short-term will be judged by the data of price 1. If the market fluctuation is slightly large, the price will be judged by price 10. If the market fluctuation is large, the price will be 50 or even Judging by the 100 gear. The same method is used for other currencies, and the reference is based on price digits. This method is more suitable for price control in short-term transactions, but is less suitable for longer price cycles. In addition, I am accustomed to using Binance exchange, and I don’t know much about the data of other exchanges.
