How to Short New Coins: Pitfalls and Summaries from the Past Few Years

First, let's state the conclusion - New coins are not something you can short casually, but if you really want to do it, there are still strategies to consider.

1. Look at the Depth

Many new coins have thin order walls, and price fluctuations can be exaggerated. If the depth chart collapses in the middle, a large order can liquidate your position. At this time, you should reduce your position size when shorting, and don't expect stop-loss orders to fully protect you.

2. Pay Attention to Borrowing Rates and Funding Rates

Borrowing rates can multiply several times in a day. Holding a short position for an extra day adds to your costs. If early on there is high enthusiasm among long investors, the funding rate is often positive, allowing you to receive subsidies when shorting, but remember that volatility can be fierce and the rate is not a safeguard.

3. Observe the Position Rankings and Large Transactions

If the short ratio in the position rankings suddenly rises, it could mean that a group of people is collectively shorting. This can amplify the liquidation chain. Remember to build your position in batches and avoid going all in at once.

4. Learn to Hedge with Spot Trading

If the project team or institution is dumping, take advantage of their selling pressure. Use market orders to acquire a small amount of spot, while simultaneously taking a larger short position in contracts. This can reduce the likelihood of forced liquidation.

5. New Coin Waves Are Usually Short

From peak enthusiasm to decline can sometimes take just two or three days. Don’t be too greedy with your target price; set daily or next-day exit points, and exit when reached. Cutting off unrealized profits is the best stop-loss.

6. Don’t Treat “New Coins Must Fall” as an Absolute Rule

Some projects backed by substantial capital may have secondary rallies to entice shorts. At this time, be willing to cut losses on your short positions and re-enter later. Don’t let emotions become your belief.

7. Capital Management

Keep 80% of your account in cash, limit shorts to no more than 20%, and use leverage within three times. The new coin market can be highly volatile, so maintaining sufficient margin is key to surviving long-term.

In conclusion, what you earn is not just from price declines, but from the moments when your opponents lose control of their emotions. View yourself as an observer; record depth, funding rates, and emotional fluctuations. When you encounter similar scenarios in the future, you can replicate the strategy.