Hi everyone, I was born in 1988. In 2015, by chance, I entered the cryptocurrency trading industry, an industry full of opportunities and challenges. At the beginning, I operated with a complete gambling mentality, and ended up losing hundreds of thousands of yuan in a short time. It was a very painful experience.
However, I have a relentless drive to win. After losing, I began to study diligently. I scoured the internet for information, frantically learning all things cryptocurrency trading, and constantly improving my trading skills. After years of trial and error, I finally experienced a major turning point in my life in 2024, beginning my journey of success. In just over two years, I had successfully accumulated an eight-figure fortune from my initial capital of 100,000 yuan!
Next, I will share with you the core principles of my successful cryptocurrency trading and practical tips for short-term cryptocurrency trading.
Three Don'ts for Cryptocurrency Trading
Don't buy blindly during a rally: When market sentiment is high and excitement is high, prices are often already inflated, and rushing in at this time can easily lead to being the "buyer." Conversely, during a market correction or decline, when everyone is panic-selling, this is an excellent opportunity to acquire low-priced assets.
Don't concentrate all your bets on a single currency: Cryptocurrency trading is an uncertain adventure, so don't put all your money on a single currency. Diversify your investments and spread your funds across different currencies. This way, even if one currency performs poorly, it won't devastate your overall investment.
Strictly control position size: While fully invested may seem like a way to earn more, it actually significantly limits your flexibility. Maintaining a certain percentage of cash reserves is like leaving a fallback. When market trends deviate from our expectations, we can quickly adjust our strategy and avoid being stuck in a reactive position.
Six tips for short-term cryptocurrency trading
When the price of a cryptocurrency is consolidating at a high level, it usually indicates that there will be a new round of upward movement. However, when the price of a cryptocurrency is consolidating at a low level, it is likely to fall further. Therefore, we should wait patiently for the trend to become clear before taking action and should not blindly follow the trend.
Avoid trading during sideways trading: Sideways markets often lack a clear direction, like a ship lost at sea. At this point, the best course of action is to wait for the trend to become clear before taking action.
Look for buying opportunities when the market is bearish and sell opportunities when the market is bullish: This is a contrarian strategy. When the market is generally bearish and a bearish candlestick appears, we can boldly buy; when the market is optimistic and a bullish candlestick appears, we should consider selling at the right time. This can effectively reduce the risk of chasing rising prices and selling falling prices.
The speed of decline determines the rebound: The speed of price decline will determine the strength of the rebound. A rapid price drop is often followed by a rapid rebound, while a slow decline may lead to a more moderate recovery. We can use this pattern to better grasp buying and selling opportunities.
Pyramid-style position building: When building a position, use a pyramid-style approach. Gradually increase your holdings, especially when the price of the currency drops, and increase your purchases. This can effectively reduce costs and lay a solid foundation for future profits.
After a period of sustained price increases or decreases, the price of a cryptocurrency will inevitably go sideways: After a period of sustained price increases or decreases, the price will enter a period of consolidation, during which price fluctuations are relatively small. In this situation, it's important not to rush into buying or selling, but to patiently wait for the next trend signal to appear. True cryptocurrency traders practice simplicity: repeating simple things. This short-term trading model has a winning rate of 98.8%. Learn how to easily make 100,000 to 1,000,000 yuan. Just follow this one method!
1. Warehouse division is not metaphysics, it is a life-saving talisman!
How to divide it specifically?
For example, if you have 30,000 U, you can directly cut it into 3 parts, each part is 10,000 U. Each time you open a position, you only use 1 part, and lock the rest into your wallet and pretend it doesn't exist.
Remember two numbers: the highest price for big cakes is 10 times, and the price for copycat cakes should not exceed 5 times!
Even if you see a sharp rise in prices, don't be greedy! The higher the leverage, the easier it is for the exchange to send you back to zero with a single needle.
For example, if you open a 10x margin with 10,000 U and the price drops by 10%, your account will be wiped out. But if you only open a 5x margin, it will only be wiped out if it drops by 20%, and the error tolerance rate is doubled.
There is also a hidden function of warehouse division: to cure overthinking!
When people lose money, they tend to "open orders in retaliation," which results in even greater losses.
After splitting your positions, even if you lose one share in a fit of rage one day, the remaining two shares will still keep you calm. Can you have the same mentality if you lose 10,000 yuan or 30,000 yuan?
2. High leverage = chronic suicide, don’t be stubborn!
There are always people who are dissatisfied: "My neighbor Lao Wang made 100 times the money and bought a BMW in one night, why can't I do the same?"
Brother, Lao Wang will not tell you that he has been liquidated 10 times, nor will he say that he exchanged his BMW for the property deed.
There are two truths about high leverage:
1. Pin-in treatment for dissatisfaction: The exchange loves those of you who open high-multiple bets the most. A pin-in in the middle of the night will take away all your principal.
2. Mentality collapses: If the price fluctuates by 1% when the opening price is 100 times, you will become restless. Can you still operate rationally?
Remember:
- Over 10 times the pie = gambling with your life
- More than 5 times the copycat = giving away money
The lower the leverage, the more courageous you are to hold a position and the more likely you are to catch the trend!
Three ways to fail when trading against the trend:
1. The stubborn hold-on type: "I just don't believe it won't fall!" - and ends up losing all the capital.
2. The "covering position" type: "If the price drops further, I'll add to my position to push up the average price!" - but ends up running out of ammunition.
3. Metaphysical type: "A golden cross appears on the K-line, which means it will definitely reverse!" - The dealer will use a big negative line to teach you a lesson.
Correct posture: It is better to miss the opportunity than to give away your life!
Is the market going crazy? Just wait and see! Missing out won't hurt, but going against the trend can be devastating.
Newbies need to understand: Why watching the market 24 hours a day is useless. Understand the tricks of big investors in one article!
"Cutting big meat with a slow knife" is not like the strategy that Trump used last night to hit Ukraine. There is also a leeks-cutting routine that big investors love to use.
Don't take chances, this is not an exaggeration! If you still can't distinguish between "shipping" and "washing the market", then you are really not far from being eliminated by the market!
Understanding the MACD indicator will help you avoid blind buying and relying on luck!
1. When the fast line of the MACD indicator crosses from below to form a golden cross, it's a clear buy signal. Furthermore, the higher the golden cross appears, the stronger the buy signal. Golden crosses formed above the zero line are stronger, while those formed below the zero line are relatively weaker.
2. When the slow line of the MACD indicator crosses the fast line from top to bottom, forming a death cross, this is a strong sell signal. The lower the death cross occurs, the stronger the sell signal. A death cross above the zero line is a weak death cross, while one below the zero line is a typical death cross.
For beginners, the MACD indicator has unique value. It can help investors accurately capture the starting point of a strong upward trend and also has a certain bottom-fishing function.
At the same time, the MACD indicator clearly indicates buy and sell points through its golden and dead cross signals, providing a strong basis for investors' trading decisions. Mastering the MACD indicator's application skills is undoubtedly an important step for novice investors on the road to successful investment, greatly increasing the probability of investment success.
Of course, just looking at this point is not enough to make you feel at ease in the cryptocurrency market.
Why do nine out of ten people lose in cryptocurrency contracts? After reading this contract operation guide, you will be the only one!
1. Contracts are not gambling
2. Find the method that best suits you and the market environment
3. Positions, Volatility, and Holding Time – Understanding the True Risks of Contracts and Leverage
4. Leverage is limited to certain positions. You cannot use 100x leverage for a few thousand dollars.
5. Only entering 10% with a 100x leverage is not called a light position, ten times is ten times!
6. Recognize the limits of your current approach
7. Stop loss, don’t resist the order!
8. As long as you keep paying attention to the market, the strategies that have worked will work again.
9. Keep transaction records. 10. If you have never been exposed to contracts or entered the cryptocurrency circle before reading this article, don’t just read it and join!
1. A contract is not a gamble
Contracts change the nature of risk. For example, if the price of a currency rises by 1%, the player's invested assets will double. However, if the price drops by 1%, the player's assets will be liquidated, and the entire principal will be lost. Poverty and wealth are always just a thought away, a moment away. In essence, it is the same as futures and stocks (margin trading). Of course, some people think these are also gambling...
When I first started losing money, I had the mentality of "contract = betting on size with some rules", and I directly used 50 times leverage with a capital of one or two hundred U.
For the first trade, the target profit is 5%, and the maximum loss during the trade is 75%. Hold the trade until the investment is recovered and the profit is taken;
The second one targeted 2.5% profit, but I lost 75% in the middle. I held on to the order and successfully liquidated the position and returned to zero.
Wanting to make a 2.5% profit but losing 100% instead, that's a one in a few tens of percent chance, which is really unlucky; but now it seems that I was lucky to have fallen into the trap of carrying orders so early. If I had been forced to leave the market with a capital of several thousand or even tens of thousands, I would have...
I guess I will become one of those guys who keep saying "contracts are gambling" all day long. As one of the relatively more miserable ones (losing money due to margin calls), I will refuse to learn more about contracts or even digital currencies.
Then switch to futures or stocks and continue to lose money.
2. Find the method and market environment that best suits you
After my own exploration, I chose a relatively low-risk operation method
Prepare a fund that you can afford to risk, open a contract at 5 times the price, and buy a quarter of this fund.
For example, my fil operation is to prepare 200U capital, buy 50U, and open a contract of 5 times.
Why do you do this? Because buying 50U means you still have 150U of margin left, and your position will only be liquidated if the currency drops by 40%.
This way you won’t get liquidated accidentally. Many of my friends like to play with high multipliers of 10x or 20x. This will be very tiring. You have to keep watching the market and can’t sleep at night.
Finally, choose a 5x contract and set a stop loss, and you will basically not encounter a margin call.
As for taking profit, since my own strategy for spot trading is to withdraw after making a profit of 30 points, so if it is changed to 5 times the contract, it means withdrawing after making a profit of 150%.
3. Understand the true risks of contracts and leverage
An equally important factor affecting risk, yet often overlooked, is holding time. Profit and loss = holding time x volatility x position size. This roughly represents risk, with holding time being the main factor.
Tenfold leverage is certainly risky, but trading for five minutes and keeping an eye on it is completely different from simply going to sleep with 10x leverage. Some traders even go so far as not to set stop-loss orders, which is a risky move that's practically costing you money. One of the reasons I frequently used 10x and 20x leverage when I started with no more than $50 was because I held my positions for a short time, allowing me to trade hundreds of orders while keeping my risk under control.
Altcoin volatility is greater than Bitcoin, and futures contracts are more volatile than spot trading, so beginners should be aware of this before opening a position. Some friends have told me that futures contracts are risky, and then they go all-in on small-cap altcoins without even reading their whitepapers. The actual risk they take is far greater than regular futures trading. However, if you misjudge the market direction, even a single large fluctuation can lead to significant losses. For example, FIL futures prices suddenly jumped from 25 to 30 in just a minute or two, causing me to lose over a third of my initial investment in a single trade.
Position size is the most obvious factor; the more positions you hold, the greater the risk. However, some people say, "As long as you keep trading futures, you'll inevitably slide towards 100x leverage," or even say they use 100x leverage on altcoins. This raises another point:
4. Leverage has position limits. You can’t use 100x leverage for a few thousand dollars.
At least this is the case for Binance’s USDT. All exchanges have a maximum position limit for leverage. Take BTC as an example:
Everyone knows what 125x means, but the "maximum position size" of 50,000 USDT means you can only use 125x leverage if you have less than 400 USDT (50,000/125). If you don't change your leverage, even if you have 50,000 USDT, you can only hold a maximum of 1.25 BTC (which is currently trading at 40,000 at the time of writing). If you only have this one position, it says 125x, but you're only using 1x leverage, which is effectively useless!
Correspondingly, BTC with 100x leverage can only use up to $2,500, and ETH with 100x leverage is the maximum, which can only be used for $100; altcoins do not have 100x leverage, and most of them have 50x as the upper limit, as shown in the figure below
You can only use $100 to get 50 times the amount.
The maximum position you can hold is determined by the leverage, exchange size, and the size of your coin. Binance is already the world's largest digital currency exchange. If the leverage you receive exceeds the above by a large margin (for example, you are asked to use $10,000 to open a 100x BTC leverage), or if you receive 200x or even higher leverage, it is very likely a scam by a black exchange!
Now that we are on the subject of leverage, it makes sense to bring up the following point:
5. Only entering 10% with a hundred times leverage is not called a light position, ten times is ten times!
Unless you have multiple positions, there is no difference between this and entering with a full position with 10x leverage; what's more, multiple positions are only done by people who can at least understand the game individually.
Position/Balance is the actual leverage used. Please use this as a guide for measuring risk.
6. Recognize the Limits of Your Current Approach
Back to my own trading.
The YFI and CVC market in November allowed my account to grow from $700 to $3000+ (the previous $200 hole was also made up with FIL myself); then in December, when the GRT contract was launched, there were huge fluctuations in the two days, and I made a profit of $7000. At this time, the total number of transactions was 4623, and the highest daily profit was $2769 (on the day GRT was launched).
However, I ended up losing over $1,000 in a single day for the first time, nearly -$1,200, and even lost $2,500 at one point. Facing such a market situation and setting a new record, I also summarized the problems I faced at the time:
The contract market for mainstream cryptocurrencies such as Bitcoin and Ethereum is too uncompetitive; in addition, as the account grows, the profit space for high-frequency entry and exit of small positions will become increasingly limited. After all, humans cannot compare with quantitative robots, and the advantages of manual trading do not lie here.
7. Stop loss, don’t resist the order!
Below is the earnings chart before the 519 crash.
In the early morning of February 1st, after Doge’s surge, many people agreed to have everyone sell at 9:30 pm.
Buy XRP and hold it, whoever closes the position first will be the loser
Although I didn't go long on this, I sensed a potential rally, so I started going long at 9:30 AM, using a low leverage of around 100%. This coincided with XRP's dramatic drop from 0.6 to 0.4 at 9:31 AM. (Whoever closes their position first is the loser?!)
Setting a record for the highest single-day loss (-$6,000 or more), a single loss exceeding $1,000 and two consecutive losses (the maximum was -$1,672.68);
In addition, at midnight on March 18, I bought a lot thinking that ADA would rise, and my position was also not large. As a result, ADA suddenly plummeted, falling from $1.4 to $1.1 in an instant, setting a record for the highest single loss (-$3549.10).
The reason why these three transactions did not cut losses was because people held on to the orders because they felt they could make a profit.
The time to close a position but not close it, and the extra time to hold the order, are only about ten seconds.
In extreme market conditions, even a few minutes of trading time in a high-leverage position without a stop-loss is a luxury. I've even seen friends who, knowing the risks of cryptocurrency trading, simply go to sleep without setting a stop-loss. They appear to be more profitable than me, but their lack of awareness of cutting losses and stopping losses already dooms their future.
Unplanned margin calls, even with leverage, are even more serious. Unless your trading volume is large enough to single-handedly create a pivot (such as with unpopular altcoins) and you have extensive trading experience, you will only lose money faster than holding a position.
Let me reiterate: take profit depending on the situation, but stop loss must be set!
Stop loss is a must!
8. As long as you keep paying attention to the market, the strategies that have worked will work again.
This was told to me by a big brother. If you are browsing Zhihu and see this, tell me and I will treat you to barbecue. Hahaha
As I mentioned before, my initial strength, high-frequency, low-volume scalping, which I was best at, became increasingly limited as my account size grew. Furthermore, even the methods I had modified based on account size began to become limited.
Although I have never given up, the opportunities to use it are indeed very few. When there is no shortage of market conditions but my profits are mediocre, I sometimes miss the time when I made the fastest progress. It was the first time that I used short-term trading to steadily increase my balance and used a small account to dream big dreams.
May wasn't a smooth month. The second wave of Dogecoin's wild swings didn't yield the expected profits. During the two-week downturn, I knew I needed to do better but didn't know where to start. Even the sharp drop at 7:30 PM on May 19th didn't yield any results.
Until the real 519 crash came, the website became stuck, TradingView's candlestick chart lagged for several minutes, and the trading volume count stopped (the actual trading volume exceeded any previous market, including last year's 312). Even the official website's 1-minute candlestick chart, after recovering, mistakenly displayed several almost parallel red candles.
I almost subconsciously thought of the market environment that emerged when I first started using high-frequency trading. The only difference was that last time it was altcoins, this time it was Ethereum contracts, which have orders of magnitude higher trading volume and are second only to Bitcoin in size.
Starting from the first reversal, go long on 30eth and close the position immediately after making a profit;
The second one, 30eth, floating profit, closed;
50eth, 60eth, the website price is a bit slow, I pause for a moment, use 0.003eth to test the speed, and find it can be done, then 30eth, 50eth...
Ethereum's movements were extremely large. Although I wasn't too nervous at the time, I should have been quite focused because I didn't even look at the balance next to it.
When Binance completely crashed, I stopped and realized that I had exceeded the target.
………………………………
On the day of doge, I worked hard all day and made $10,000. I was so happy that I almost couldn’t sleep at night. Although I have never made so much money in a day since then;
As a result, on that day, the previous record was broken tenfold at the most unexpected time, using the most unexpected yet most reasonable trading method - even though no single transaction used more than 2.5 times leverage, and no single profit exceeded 20%.
It felt so sudden and unreal. After my Binance account got stuck, I went to chat with some friends. One of them, a friend I'd known for a few years and who had recently started trading futures, was complaining about how badly his spot prices had plummeted. We chatted haphazardly until the wee hours of the morning, when his spot prices were almost back up, and then I went to bed. I took a screenshot and transferred most of my money to my spot wallet. After all, at my current level, I don't need that much money.
9. Keep transaction records.
How many orders were made every day? What was the profit and loss situation? Why was there profit or loss? And so on...
Honestly, I haven't done it often enough, but many traders who are better than me say it's very helpful, and my own records have helped me at times. While there's no single method that guarantees profits (after all, your counterparties will inevitably change their strategies over time), and the market is inherently volatile, it can be a good indicator of your current challenges. With more practice, you'll eventually grasp some of the current market patterns.
The following is the transaction statistics. During the integration process, two orders may have been accidentally counted together, but this is not a big deal:
The total number of transactions was 13,866, with an average leverage of 2.06x. The average leverage for a balance of $1,000 was 0.76x.
Principal-weighted leverage is 0.46x (i.e., total position divided by the sum of the balances at each opening, to avoid the situation where a large number of 20x leverage positions are opened with only a few tens of dollars, thereby inflating the average).
There were 25 transactions with a single profit exceeding $1,000, and 5 transactions with a single loss exceeding $1,000. Three of these transactions were mentioned above, and the other two occurred on Dogecoin on January 29th and Ethereum during the 519 period.
Starting from $1,000, there were 5 single trades with profits exceeding 10%, with the highest being 16.25% (ETH, 2.44x leverage). There were no single trades with losses exceeding 10%, with the highest being 8.58% (BTC, 46x leverage, which is the trade that caused the initial loss when BTC broke through 40,000)
10. If you have never been exposed to contracts/have not entered the cryptocurrency circle before reading this article, don’t just join it after reading this article!
The risks in the stock market are nothing compared to those in the cryptocurrency world; as for contracts, the 90/100 rule of traditional futures still applies!
Especially for those who haven't entered the cryptocurrency market yet, now is not a good time. The reason for the 519 plunge was the relevant policies, and you should be careful about problems such as frozen credit cards. The picture below is a forwarded post, and its authenticity is unknown.
10% of people make profits, 90% of people lose money, but 90% of those who lose money think they are among the 10%.
Master these 9 rules of the cryptocurrency world and become a cryptocurrency millionaire!
1. Invest with spare money: When investing in cryptocurrencies, only use the money you have on hand. Never borrow money or take out a loan to speculate in cryptocurrencies, as this is too risky.
2. Carefully select valuable coins: When choosing investment projects, carefully select those "value coins" with potential and develop a reasonable capital allocation plan. This is the so-called "sunshine investment strategy" and will make your investment more stable.
3. Intervene in batches to deal with callbacks: After entering the market, it is normal to encounter price fluctuations or callbacks. Therefore, allocate your funds reasonably and buy in batches to reduce risks.
4. Diversify your investments to reduce risks: Don’t operate with a full position. Allocate funds to different projects. This way, even if a project goes wrong, other projects can help you share the risk.
5. Stay informed: Always pay attention to the latest news in the cryptocurrency circle and the latest developments in finance and economics, so that you can capture investment opportunities more quickly and make money faster.
6. Follow the trend, not the head-on: When investing, don't go head-to-head with the market makers or market trends. Learn to follow market trends and follow the flow, so you can better seize investment opportunities.
7. Use contracts with caution: If you choose to trade contracts, be sure to control your leverage. We recommend using 20x to 50x leverage, and avoid using 100x leverage easily. Steady profits are paramount.
8. Strictly control your positions and avoid random manipulation: Position control is key to investing. Avoid arbitrary manipulation in uncertain situations. No manipulation means no risk, and no loss of money. Also, regularly review your assets to ensure proper management.
9. Stay calm and have a clear entry and exit strategy: Maintaining a calm mindset is crucial during the investment process. You need to know when to enter and exit the market. Your experience in the cryptocurrency world will help you grow, and your mindset is more important than your strategy.
I come riding on the wind with a sword, and save people between heaven and earth. With wine I am happy and carefree, and without wine I am also crazy. I am Sunny Day. I hope to bring some help to people in the boundless currency circle. Friends who agree can like and follow me. I wish you all a long-lasting account!
The process of enlightenment in cryptocurrency trading is the same, from seven losses to two draws and then to one profit. It is nothing more than being able to focus on one thing and not be greedy for various profit models. Be firm in sticking to this trading system, and over time this system will become your ATM.
I am Axin. If you don’t know what to do in a bull market, click on my avatar and follow me. I will share the bull market spot planning and contract password for free.
