Using $5000 in principal to fully engage in contracts (for example), use at most 10% ($500), leaving $4500 reserved for adding positions at any time, as mentioned below.

First type:

Only trade 1 coin! Always only trade 1 coin! Always only trade Bitcoin!

First of all, do not trust altcoins, and absolutely do not be greedy. Just because the principal on paper looks large doesn’t matter; if you make a mistake, you can’t just hold the position. You came to the crypto space to make money, not to hold positions.

I have seen people simultaneously holding 7-8, 10-15 mixed long and short positions, fantasizing about hitting it big, but the end result is either liquidation or huge losses, or being trapped indefinitely with no way to escape. They want to close positions, but seeing such big losses makes them reluctant to do so, continuing to hold, watching their margin decrease continuously, living in constant fear.

Second type:

Always set a stop-loss when opening a position. If the market is highly volatile, decrease the multiplier and set the stop-loss further away. If the market is less volatile, increase the multiplier and set the stop-loss closer.

You can have no take profit but must set a stop-loss. No one can predict when the market will surge or plummet to clear leverage. If you happen to encounter this, a stop-loss can preserve most of your principal. A temporary loss can be made up later; in fact, many people, upon seeing their stop-loss point leading to significant losses, are afraid of being stopped out and simply do not set one, or they get trapped shortly after opening a position, feeling immense pain but not closing the position, still hoping for a quick reversal. This mindset is very naive. In the crypto space, no matter what method, you are essentially trading against the market makers. When your contract position happens to be against the market maker's, it will eventually be blown up. There are numerous cases of people unwilling to close their positions to avoid a small loss, only to end up trapped more and more until liquidation.

Third type:

The liquidation price should be at least pulled down to half of the opening price and then halved again.

For example, if you go long at 66000, the best liquidation price should be set at 66000 divided by 2, then divided by 2 again = 16500. This position is very unlikely to be liquidated, at about 99.99% probability, if there are no black swans.

Since the peak period in March, most altcoins have plummeted; even spot trading can't withstand a 1x, 2x, or 3x pullback, let alone contracts and leverage.

Why the position after 2 rounds of halving? Friends who have experienced previous black swans should remember clearly. When a black swan occurs, the market collectively crashes, and liquidation text messages ring out frantically. In a short time, the global financial network suddenly jams; your stop-loss may not have triggered before the coin price has halved. In such a case, if the liquidation price is above the halving price, the result is liquidation. Stop-losses are useless in such extreme situations, so set the liquidation price further away; this is the second layer of capital preservation operation. When the capital is insufficient, it also requires you not to open high leverage; lower multiples can allow you to survive a bit longer.

Fourth type:

The remaining principal after opening a position should at least allow for 4 additional positions.

For example, if the margin for opening a position is $30, the first addition uses $30, the second uses $60, the third uses $120, and the fourth uses $240. This is an average price pulling method. If the market adjusts significantly once, you can use $60 or $90 for the first addition, and $120 or $240 for the second addition. This way, it is much easier to get close to the price after violent surges or plummets, and it's easy to escape after a rebound, potentially making a large profit with one big rebound.

If after opening a position the market moves against you and your stop-loss hasn't been triggered, you can wait for the price to stabilize to make the first addition, or wait a day or two to see if a second fluctuation occurs. If a second fluctuation occurs, choose to add at the best cost-performance ratio. Normally, after a rebound, the price will approach the opening price after the addition; at this point, you can choose to close with a small loss, take a break, and observe the market situation. It is not advisable to rush back in immediately.

If the market continues to fluctuate greatly and moves far from the opening price of the first addition, find the right position to add for the second time. At this point, the market generally begins to consolidate, just wait for a rebound. It is rare to see three consecutive surges or plummets; the opportunities for further additions are few. After adding, the stop-loss price should be increased several times; choose carefully to adjust the stop-loss position in a timely manner.

There are many analyses in the forum, such as golden crosses, dead crosses, divergences, etc. I often look at them and verify them, but the results of such analyses vary widely. I do not recommend coin friends spend too much time on forum analyses; they are of little reference value. If they are really that good, they would at least be trading A8 or A9; who would still be struggling in the forum to gain traffic for a small commission and referral fees?

Fifth type:

Hedging with the same coin.

Currently, I only recommend using this method on Bitcoin; it is only suitable for use when there is no other option. The reason for only doing Bitcoin is that Bitcoin has the fastest average recovery time. If all 4 points above are done well, then hedging is not very meaningful and may even lead to being trapped.

In this way, when you can only increase your position once after using high leverage, you need to carefully consider whether to hedge or add the 4th position to adjust the average price.

If you no longer want to add to your position, then find the right position for the coin price and directly open a reverse position. Once opened, you will likely have to wait for a major fluctuation to completely escape. According to the market's prevailing trend, close short positions at the lowest point and long positions at the highest point during a rebound. Such closing price points must be waited for; you can pre-set closing prices to prevent price spikes. However, it cannot be denied that this method is very troublesome but indeed useful, as it can help you avoid liquidation troubles when your margin is insufficient. After the market stabilizes, most people will choose to take a partial loss before fully closing out.

Sixth type:

Hedging with different coins.

Some coin friends like to hedge contracts using several coins that have similar but opposite volatility. This method is highly inadvisable unless time and margin are unlimited.

Constantly hedging yields low profits and may even result in losses. It is already difficult to understand one coin; adding another makes many operations distorted, ultimately leading to mutual entrapment and occupying margin. Engaging in long-short confrontation has little significance. Although margin fluctuations during violent rises and drops are also not significant, the profit margins are really minimal; it’s better to focus on the above 4 points.

Seventh type:

In the early stages of a bull market, do not easily go short; you may short at the bottom. In the late stages of a bull market, do not easily go long; you may long at the top.

When opening a position, at least combine it with the trend over a week or a month to make a judgment; no one knows what the market makers are thinking. Some people are used to doing day trading and get influenced by intraday movements during slow market rises or downtrends, thinking the price seems right and jumping in. But soon after entering, they encounter violent surges or plummets, either going long at the top or short at the bottom. Many positions can't even touch the shadow of the middle of the mountain. If a stop-loss is set, then a loss is a loss. Many coin friends don’t have a habit of setting stop-losses; they wait for a rebound while getting more and more trapped, ultimately being completely trapped with no options but to feel depressed and wait, missing a major market cycle.

If you only want to engage in contracts, strictly implement these four points, and you can likely still make money purely from contracts.