Recently, there have been many volatile contract coins. The contract $RESOLV, newly listed on Binance yesterday, has again exploded the short sellers.
This contract trading volume is fifty times that of spot trading volume; I generally do not recommend opening positions, whether long or short, as it is easy to be liquidated.
But there are many people who enjoy the thrill of high stakes, so today we will analyze a few strategies under extreme fluctuations and see if they can turn losses into profits!
Let's assume a few scenarios and use data tables for an intuitive analysis of the processes of several operating strategies! These assumptions do not constitute investment advice; they are purely analytical!
Let's analyze yesterday's volatile coin $RESOLV! Current price 0.29139, 24h high 0.39! First strategy: Many people do this; after opening a short position and encountering a surge, they do not stop loss but instead increase their position. Open short with 100U margin at a price of 0.2U, doubling the position with every 10% increase! The table lists how many U are needed to avoid liquidation under three, five, ten, and twenty times leverage after several increases.
From the table, it can be seen that if you do not stop loss with 100U and continue to increase your position to 3100U, it will also result in liquidation. Therefore, this strategy is not advisable; timely stop loss is the key.
Second strategy: After opening a short position and encountering a surge, immediately stop loss. After a 10% increase, continue to open a short position with 100U margin at a price of 0.2U, setting a 50% stop loss.
This strategy incurs even greater losses than the first one. When faced with high control, like $LA, there will always be times when your capital is insufficient, which is still not advisable!
Third strategy: After opening a short position and encountering a surge, immediately stop loss. After a 30% increase, continue to open a short position with 100U margin, open short at a price of 0.2U, and set a 50% stop loss.
This strategy is more prudent compared to the previous one, but it also faces the same problem: not knowing how high it can rise, and capital is not unlimited. Fourth strategy: After a surge, immediately buy and open a short contract with the same amount of spot tokens. Open short at 0.2U, with a 100U three-fold short position, requiring a hedge purchase of 300U in spot. Even if the short position is liquidated and rises to 0.4, you still earn 200U. Based on the above analysis, for new coins and volatile coins, hedging before shorting carries less risk than opening a short directly. For the upcoming new contracts on Binance, I will adopt a combination of the third and fourth strategies for a challenge! The purpose of this analysis is to give everyone an intuitive understanding of liquidation and to warn against reckless trading. There is no need to short new coins immediately; it is entirely possible to wait and see. Always check how the funding rate for new coins is charged. If it’s collected hourly, just give up. If the spot trading volume is small, and it hasn’t even reached 5 million in the first half hour, then give up. Even if you must open a position, ensure you have a stop loss and buy spot for hedging! The above is all my personal analysis; if there are any inaccuracies, feel free to point them out. Everyone can also discuss and provide opinions in the comment section! If this helps, I hope everyone can like and share more! Finally, I wish all the friends who see this tweet, everything goes smoothly! May all your wishes come true! May wealth come from all directions! #币安Slpha上新 #合约挑战