This is an article that tells everyone how to make money in the cryptocurrency world.
I often encounter fans asking for guidance to make money, but I have always refused. I do not guide people to trade cryptocurrencies, do not guide people to play contracts, and definitely do not guide people to make money.
Today, I just want to tell everyone a strategy for making money in the cryptocurrency world. If you find this article reliable, you can follow the strategy on your own; if you find it unreliable, just ignore it, as the gains and losses are yours to bear.
People from outside who guide you to make money and let you follow their trades are just trying to take your rebate, while I refuse to let anyone follow my trades.
Alright, enough small talk; let's get straight to the results.
Six months ago, I conducted an experiment with my exchange's small account using a 'contract long-short hedging strategy', investing a principal of 3000U, and so far, the profit has reached 230%.
3000U has turned into 10200U.
What is the contract long-short hedging strategy?
Simply put, open a long position in Bitcoin and a short position in Ethereum. (Long means bullish, short means bearish.)
Two trades with the same multiples and the same positions, but different cryptocurrencies and different directions.
Strategy: Use a principal of 3000U to play, opening a 500U long position in Bitcoin with 20x leverage and a 500U short position in Ethereum with 20x leverage. (Set to full margin)
Based on past experience, we know that generally when Bitcoin rises, Ethereum will also rise, but the fluctuations of the two cryptocurrencies are different. For example, Bitcoin may rise by 3%, while Ethereum rises by only 2%, or Bitcoin may fall by 2%, while Ethereum falls by 3%, and so on.
The long-short strategy earns from the 'difference' between these two.
For example, you go long on Bitcoin and short on Ethereum.
If Bitcoin rises by 3% and Ethereum rises by 2%, then your long position in Bitcoin earns 3%, while your short position in Ethereum loses 2%, making the difference of 1% your profit.
If you open the wrong direction, you may only lose 1%, right? Don't be afraid; the core advantage of the contract long-short hedging strategy is that even if you open in the wrong direction, you won't be liquidated!
The biggest fear in trading contracts is liquidation.
Some people ask, what if Bitcoin, which we are bullish on, doesn't rise, while Ethereum, which we are bearish on, keeps rising, creating an extreme single-direction market situation?
Don't worry, you still have 2000U left for margin calls; you will be back sooner or later! The reason for only using 500U each from a 3000U principal is to prevent single-direction trends.
After all these years, when have you seen Bitcoin and Ethereum have significant opposing price movements?
You could say that the directions are basically consistent, especially since we still have 2000U in reserve.
I guess these explanations might be hard for beginners to understand; only those who have traded contracts will understand.
(Screenshot of the long-short hedging strategy)
In the current bull market, my short position in Ethereum lost 6785U, while my long position in Bitcoin earned 12330U; the difference here is the profit.
Some people say the 'difference' earned is too little; my friend, playing contracts in the crypto world is not about chasing high profits, but about seeing who can last longer. Often, those who chase short-term profits lose everything, and hedging strategies can also be very profitable, with monthly returns reaching an astonishing 40%. Isn't that a lot?
Later, I plan to open each position with 2000U, 4000U... is that too little?
The contract long-short hedging strategy is not particularly unusual; its core advantage is to reduce some losses when your long and short views are incorrect, thus achieving eventual profit.
To make money, one must first be prepared for losses and take precautions to reduce them.
This is not a guaranteed profit; even partners testing the long-short hedging strategy have lost money. The main reason for their losses is overthinking, changing directions constantly, and letting greed overcome rationality, leading to incorrect directional judgments.
Simply put, it means 'if you lose, quickly close the position and cut your losses; if you gain, quickly close the position and take your profits.'
Why has the strategy made money?
Besides being laid-back, the main reason is 'bullish on Bitcoin, bearish on Ethereum'!
Here is a very important experience.
Bull Market: Bitcoin must rise first to confirm the direction of the bull market before other cryptocurrencies will follow, so Bitcoin long positions can make money first.
Bear Market: Bitcoin must fall less while other cryptocurrencies fall more, so short positions on other cryptocurrencies will earn more.
Regardless of the bull or bear market, profits can be made.
This is the secret to my success.
Why does the strategy favor shorting Ethereum?
Ethereum has been weak for the past two years, so you must short it unless a day comes when the trend changes drastically, allowing for a long position.
To play the long-short hedging strategy, one must have a roughly accurate judgment of future trends and an understanding of the value of each cryptocurrency at certain stages.
Why choose Bitcoin and Ethereum for shorting?
Because you must use two cryptocurrencies with similar values for hedging! If you use Bitcoin and Shiba Inu, it can easily lead to a single-direction market. If Bitcoin rises and Shiba Inu doesn't, or if Bitcoin falls and Shiba Inu crashes, this will lead to liquidation.
Top cryptocurrencies can only hedge against other top cryptocurrencies; top cryptocurrencies will only lead to liquidation when hedging against junk coins.
The 'long-short hedging' is just a strategy, not a guaranteed profit. To make money, one must rely on their own experience and judgment. When your judgment is correct, it allows you to profit; when your judgment is wrong, it won't let you lose that much.
This is an article I have been wanting to write, but due to the suspicion of guiding people to play virtual currencies, I put it aside. After all, if you make money, you won't give me anything, and if you lose money, you'll come looking for me. I am unwilling to do a job that requires effort but yields no reward.
Those who do not understand contracts should not read articles about the 'long-short hedging' strategy, nor should they ask how to play it, as I really do not provide guidance and cannot take responsibility for you.
For newcomers who wouldn't even buy Bitcoin without an exchange, I still suggest you download an exchange and familiarize yourself with how to buy cryptocurrencies.
Continue to pay attention$BTC $ETH $XRP
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