Years ago, I personally experienced a painful lesson of liquidation in just five days, losing over six million. As someone who has been through it, I sincerely advise all newcomers to the crypto space: for those lacking practical experience, it is wise to tread carefully or even refrain from trading temporarily to prevent significant losses. Recognizing your own capacity and acting according to your strength is crucial.
Since last February, I have achieved an astonishing leap from $50,000 to over $200,000 in just nine months, relying solely on one account! Today, I am willing to selflessly share my trading strategies and insights with every partner who loves this space.
As the saying goes, standing on the shoulders of giants allows one to reach the shores of success faster. I hope my experience can be a valuable support on your journey.
The crypto space carries significant risks, and it's challenging for the following reasons:
1. High contract multiples increase the risk of liquidation. If you are fully invested, even if you succeed 100 times, just one failure can wipe you out.
2. Policy and withdrawal risks. If the government doesn’t allow individuals to trade coins, and withdrawing from the market may result in frozen bank accounts due to potentially involved funds.
3. The main reason is personal trading skills. If you have trading skills, you can achieve financial freedom in the domestic futures market.
To increase your win rate and control risks in contract trading within the crypto space, you can adopt the following strategies:
Position Control:
Beginners should control their total position to not exceed 5% of their capital. For example, with $10,000 in capital, the maximum position should be $500. Experienced traders should also not exceed 20% to avoid overlooking risks due to overconfidence.
Stop Loss and Take Profit:
You must set stop losses when opening positions. For example, when going long on BTC, the stop loss could be set 5% below the support level. The take profit strategy should be ‘greedy’; if you reach your target profit (e.g., 30%), withdraw, avoiding greed that leads to a pullback.
Technical Analysis:
Use tools like moving averages and Bollinger Bands to gauge trends. For example, if BTC is above the 5-day moving average and the Bollinger Bands are expanding upwards, there is a high probability it will continue to rise.
Identify classic patterns such as double tops and bottoms, flag breakouts, etc., to help forecast market trends.
Build positions in batches:
When prices fluctuate, build positions in 3-4 batches; for example, start with 10%, add 20% on a pullback, and add more when breaking resistance. This can lower costs and reduce risk.
Leverage Usage:
Beginners are advised to use 5-10x leverage; experienced traders should not exceed 20x. Use perpetual contracts for long-term holding and be mindful of expiration dates for futures contracts.
Risk Avoidance:
Avoid the high risks that come with high leverage; for instance, with 50x leverage, a 1% fluctuation in coin price could lead to liquidation.
Stay calm and avoid emotional loss of control, such as chasing prices during a surge or panicking during a crash.
Platform Risk:
Choose four major exchanges (Binance, OKX, Huobi, ZB), avoid small platforms to prevent 'wick' phenomena.
Liquidity Risk:
Be cautious with altcoin contracts; for coins with a market cap below $100 million, lack of liquidity may lead to slippage.
Policy Risk+:
Pay attention to policy dynamics and adjust strategies in a timely manner.
For example, after a country implemented a cryptocurrency ban, multiple exchanges were shut down, and user assets were frozen.
Mentality Management:
Keep a trading journal, spending 10 minutes each day to record your trading process and summarize where you went wrong and right.
Reject the ‘gambler’s mindset’
Contracts are not gambling, they are a probability game. There is no 100% winning ‘divine single’, only those with strict discipline can survive long-term.
Position management in cryptocurrency trading to avoid being trapped.
I believe many friends have experienced the helplessness of being fully invested and not benefiting from a market surge, unable to cut losses. These can be avoided through position management. Without further ado, let's get straight to the practical advice:
Position management advice for everyone now: for example, if you take out $30,000 to trade contracts, my suggestion is to divide it into three parts.
Each part is $10,000. Each time I open a position, I use one part from the fixed $10,000, with Bitcoin not exceeding 10x and altcoins not exceeding 5x.
If you lose money, for instance, losing $1,000, you should supplement it with $1,000 from outside. If you gain $1,000, withdraw that $1,000. Ensure that every time you open a position, you can maintain a fixed $10,000 position. Until you earn $60,000 from an initial $30,000 in this manner, increase each of your positions to $20,000.
The benefits are:
First point, diversify positions, use low leverage to avoid being affected by exchange ‘wick’ phenomena that could lead to total loss of funds.
Second point, avoid falling into the trap of being overly confident. If one day you get too confident and lose everything, at most you will liquidate 113, leaving the rest as a buffer opportunity.
Third point, maintain a fixed position. Whether in loss or profit, you can keep a relatively calm mindset, which helps stabilize your mentality.
My habit when opening positions is to go all in at once. For instance, if one part is $10,000, I will use that in a single market movement for one coin, this means fully committing. Going all in is one-third of the allocated funds; with altcoins at 5x leverage and Bitcoin at 10x, I trade this way. My approach means I have a refined and accurate grasp of my entry points. If you are using stop-losses and low leverage, liquidation is unlikely.
My logic is to ignore all indicators and focus solely on position profit and loss. For instance, if my total scale gains X%, I increase my position by one part; if my total scale loses Y%, I will stop-loss or exit entirely. All operations are related only to my position's profit and loss; candlesticks only help determine my initial entry direction.
As for those indicators, their original purpose is to reflect the profit and loss situation of the positions that invented them.
In fact, my operations are essentially an abstract indicator, combining the wisdom of the great trader Jesse Livermore with specialized techniques, which I generally don’t share with others. Once you have an epiphany, trading can feel like you’re playing with an advantage!
1. Uptrends do not mean a peak, and corrections do not mean a bottom. Many things we think differ from reality. There is a saying that people are often overconfident, which can lead to suffering. This applies to the market too; one may feel they are at the right position when they might still be in the middle of the trend, or think the uptrend is ending when they should still be holding.
One criteria for judgment is that if the upward trend of the fundamentals hasn’t ended, you must hold on. If the market has entered a correction phase, no matter how attractive the perceived value is, do not try to catch the bottom.
2. Small positions should also be diversified.
The model is a system, and the content is about how to operate, not relying on feelings. Sometimes with small positions, one might feel indifferent, which can lead to randomness and repeated mistakes. Risk control determines how long you can survive in this market.
3. When opportunities arise, and you need to choose between one or three options, don’t hesitate; buy them all. Trust your luck. Don’t put all your eggs in one basket, or you might end up with a scenario where the chosen options remain stagnant while the unchosen options take off.
4. For long-term investments, don't focus on emotions; focus mainly on the fundamentals. Choosing a promising upward trend is key, for example, how many positives like halving, ETFs, interest rate cuts, and upgrades are clear benefits. If fundamentals are good, don’t hesitate.
5. Fear of heights is a sign of a troubled person. Being afraid of heights itself is not a mistake; the mistake lies in stubbornly refusing to cut losses during a downturn, and when a reversal happens, not being able to hold onto a small gain. This is what is known as operational deformation; mentality is greater than technique. If you run away with just a little gain, then what is the purpose of coming to the market?
6. No one is perfect.
Learn to reconcile with yourself. Making mistakes is not scary; what’s scary is the endless self-blame after a mistake. It's unnecessary to get stuck in negative emotions. Focus on maintaining a good risk-reward ratio and strengthen execution. If you can't afford to lose, you can't afford to win; it's merely two sides of an event!
In the crypto market, three things should be avoided:
Avoid chasing prices; when trading, never impulsively buy when prices are rising. Always remember the saying, 'Be greedy when others are fearful, and be fearful when others are greedy.' Cultivating the habit of buying during declines is often a wiser approach.
Avoid pressure trading: Don’t engage in pressure trading operations, as there are numerous risks and uncertainties involved that can lead to unnecessary troubles in your trades.
Eliminate full positions: Full position trading is highly inadvisable. Once fully invested, we become very passive in the market. Remember, the market is never short of opportunities, and being fully invested means giving up other potential opportunities, which has a high opportunity cost. Normal advice is to trade lightly or with half positions.
The experiences of ten years in the market have led to today's achievements through continuous reflection and summarization. It seems simple, but achieving knowledge and action coherence is not easy. Today, I share this with everyone, hoping to help many crypto enthusiasts avoid detours!
In the past few days, I have been preparing for a divine trading opportunity that is about to begin!!!
Comment 168, get on board!!!
Impermanence brings impermanence brings impermanence!!!
Important things should be said three times!!!
