8 years of experience in the cryptocurrency market ~ Practical strategies
I’m sharing some very practical strategies for the cryptocurrency market, which I have spent a lot of effort to acquire, and they are very useful ~
Here’s an example with contracts:
First, if the cryptocurrency you choose for this strategy is something like ETH with a starting purchase price of 20 USDT, then you need to prepare at least 8 USDT as your principal, because you need to open a position in a margin mode.
Step 1: You spend 1 USDT to open a position with 25x leverage, ordering 25 USDT. The opening point can be arbitrary; there are no requirements.
Step 2: Check your liquidation price, then place an order 1.5 USDT higher than your liquidation price and double the value of your last order. For example, if your last order was 25 USDT, then this time you need to use 2 USDT to place a 50 USDT order. And then? If you can calculate the new liquidation price after opening the position again, you can place a third order using 4 USDT to place a 100 USDT order, similarly about 1.5 USDT higher than the liquidation price. Because you are using 25x leverage, this means that when the market price drops by about 4%, you will be liquidated. So placing an order close to the liquidation price can help you avoid liquidation, and since your order size is double that of the previous one, it lowers the average price, allowing you to break even with just a slight rebound.
The theoretical pressure capacity of this strategy is based on your principal; of course, I am still using 8 USDT as an example. In the case of 8 USDT, you can increase your position twice, considering the position situation from the first time, theoretically, you can withstand a 12% increase before liquidation. Of course, you can set a stop-loss point; my suggestion is to set the stop-loss at 98% of the third addition price, meaning that if it drops 2% after the third addition, you should stop loss immediately.
I have used this strategy when I had 2 USDT before, and it works very well when combined with technical analysis. When the market comes, you don’t have to hold your position for too long; instead, you can add to your position due to the drop, and you can make a lot of profit when it rebounds. However, if you do not combine it with technical analysis, the process of holding your position can become very painful. After all, the cryptocurrency market is not lacking in opportunities for wealth; what it lacks is longevity.