To avoid the reversal (violent price correction) in futures, you need to follow some smart financial management rules and market analysis. Here are the best strategies to avoid the reversal:
1️⃣ Don't enter the trade in the middle of the move.
🚨 Problem: When you see an explosive candle, it is too late to enter, as you are entering with regular traders, while the whales have started selling or manipulating.
✅ Solution: Wait for a retest or a confirmed entry signal, such as the EMA 2 crossing with EMA 280 after the calm.
2️⃣ Set a smart and hidden stop loss.
🚨 Problem: Whales know where traders place their stop losses (above resistance or below support), so they intentionally hit them.
✅ Solution:
Don't set a stop loss at clear levels (like obvious highs/lows), but keep it slightly away from those levels.
Use Stop-Loss based on ATR (for example, if ATR = 0.5%, set a stop loss 1% away from the entry).
Use trailing stop to secure profits and reduce risk.
3️⃣ Avoid entering against the liquidity flow.
🚨 Problem: If whales are pumping long liquidity, don't try to short, and vice versa.
✅ Solution:
Monitor Open Interest (OI): If it increases significantly with the rise, it means strong long liquidity is entering.
Follow CVD (Cumulative Volume Delta) to know if the actual trades are long or short.
Don't enter against the move if there is an ongoing short squeeze or long squeeze, wait for a clear reversal.
4️⃣ Don't use high leverage in risky areas.
🚨 Problem: High leverage makes your liquidation easy for the whales, especially in high liquidity areas.
✅ Solution
Use lower leverage at strong highs and lows, as they are potential areas for violent reversals.
Distribute your entry in stages (Scaling In) instead of entering with a single trade.
5️⃣ Don't enter a trade without defining the reverse scenario.
🚨 Problem: Sometimes the market is unclear, and you find yourself confused about whether you are in a trend or a trap by the whales.
✅ Solution: Before entering any trade, define:
When do you confirm your trade? Example: "If BTC breaks 66K with high volume, I will stay long."
When does your trade become wrong? Example: "If it breaks 65K with strong volume, I will exit immediately."
6️⃣ Monitor the spread movement between futures and spot.
🚨 Problem: If the futures price is much higher than the spot, this may indicate that the market is overbought and will soon retract.
✅ Solution:
If the futures are significantly higher than the spot = price collapse is likely soon.
If the futures are significantly lower than the spot = price pumping is likely soon.
🔥 Summary:
✔️ Don't enter after an explosive move directly.
✔️ Set a smart stop loss, not in exposed areas.
✔️ Monitor Open Interest and CVD to know the liquidity direction.
✔️ Don't use high leverage in risky places.
✔️ Define the reverse scenario before entering.
✔️ Keep track of the price difference between futures and spot.
🚀 By following these rules, you will reduce the chances of being caught in a reversal and move with the whales instead of being a victim!