Core Insights
1. Choose the right market cycle (timing)
- Bull Market vs Bear Market:
- In a bull market (such as 2020-2021, after the 2024 halving), trend trading is easier to succeed, and the win rate for going long with the trend is high.
- In a bear market (like 2022), short-term swings or shorting on rallies are more suitable but more challenging.
- Key Points:
- Do not force trades against the long-term downtrend, otherwise, the probability of liquidation is high.
- Pay attention to Bitcoin halving cycles, Federal Reserve policies, institutional fund inflows, and other macro factors.
2. Position Management (Core Survival Rule)
- Never go all-in, never use all your funds:
- Initial capital of 5000U, single trade position should not exceed 5%-10% (i.e., 250U-500U).
- Gradually increase positions after making profits, but the maximum single position should not exceed 20% of total capital.
- Leverage Control:
- For trend trading (daily level), use 3-5x leverage to avoid high leverage leading to volatility shakeouts.
- For short-term trades (within 4H), you can use 10-20x leverage, but you must have strict stop losses.
- Absolutely avoid 50x, 100x leverage, unless it's a very small position to bet on short-term fluctuations.
3. Trading Strategy (Trend + Swing)
(1) Trend Trading (Main Strategy)
- Only trade in obvious trending markets:
- For example, BTC breaks previous high + volume increase, go long with the trend (5x leverage).
- Break key support + volume drop, go short with the trend (5x leverage).
- Holding Period:
- Trend trading can last for days to weeks, but you need to dynamically adjust take profit (such as trailing stop).
(2) Short-term Swing (Auxiliary Strategy)
- Key Point Trading:
- Go long at support levels (such as EMA200, previous low) and short at resistance levels (previous high, Fibonacci retracement).
- Combine RSI overbought/oversold and sudden changes in trading volume to judge short-term reversals.
- Quick In and Out:
- Holding period ranges from minutes to hours, take profit at 2%-5% and close the position, don’t be greedy.
4. Strict Stop Loss (Avoid Liquidation)
- Always have stop losses for every trade:
- Trend trading stop loss at 3%-5% (for example, in a 5000U account, the single loss should not exceed 250U).
- Short-term trading stop loss at 1%-2% (to avoid emotional holding).
- Psychological Control:
- Never add to losing positions to average down (this is the fastest way to liquidation).
- After three consecutive losses, stop trading for one day to avoid emotional trading.
5. Compound Growth (Key Profit Model)
- After making a profit, withdraw the principal and roll over with profits:
- For example: 5000U → 10K U (double), withdraw 5000U principal, only use profits for further trading.
- 10K U → 20K U, withdraw 10K U, keep 10K U rolling.
- This way, even if there are subsequent losses, it will not affect the principal.
- Avoid FOMO (Fear of Missing Out):
- Do not trade forcefully because you missed an opportunity, patiently wait for high-probability chances.
Real Case Reference (2023-2024)
Stage 1: Low Leverage Trend Trading (3-5x)
- October 2023: BTC oscillates between 25K-30K, go long with the trend after breaking 30K (5x leverage), hold until 38K, profit about +50% (5000U→7500U).
- January 2024: After BTC ETF approval, retrace and go long near 40K (5x leverage), take profit at 48K, profit +20% (7500U→9000U).
Stage 2: Short-term Swing (10-20x leverage)
- March 2024: After BTC breaks 69K historical high, retrace to 65K, go long with 10x leverage, take profit at 72K, profit +100% (9000U→18K U).
- April 2024: BTC drops to 60K support, short-term 20x leverage to go long, rebounds to 65K and closes, profit +50% (18K U→27K U).
Stage 3: Compound Rolling (High Risk High Return)
- May 2024: BTC breaks 70K, use 50% of 27K U (13.5K U) with 5x leverage to go long, take profit at 75K, profit +25% (13.5K U→16.8K U).
- Total Capital: 27K U - 13.5K U (used) + 16.8K U (profit) = 30.3K U.
- Repeat similar operations to eventually achieve 5000U→1 million U within a year.
Ultimate Advice
1. Contract trading is a zero-sum game, most people lose, and only a very small number can continuously profit.
2. Do not fantasize about getting rich overnight, start with low leverage (3-5x) and gradually accumulate experience.
3. After making a profit, always withdraw to avoid sudden market reversals leading to profit loss.
4. Learning > Blind Trading, it is recommended to practice with a demo account first.
Remember: In the cryptocurrency market, surviving longer is more important than making quick profits!🚀
