In this article, I would like to talk about the experiences I gained in futures transactions and my short and long position strategy, with which I increased my wallet 10 times in an average of 6 months. First of all, the difference between futures transactions and spot investments is that there is a risk of liquidation of your money. Therefore, if you do not have personal finance education or an investment advisor before taking such risks, I recommend that you do not get involved. There are risks in every area of the financial sector. It is up to you to manage these risks and turn them into profit.
First of all, I want to talk about my experiences. I have been opening positions with futures for a long time. As you can imagine, I experienced serious losses when I first started. The biggest reason for these losses was the feeling of greed. My position was making a profit, but instead of ending it, I always wanted more. At first I was losing $100-$200, but I got even more ambitious and started to lose more by using higher leverage to compensate for my losses.
In my experience, my biggest loss was on a liquidated position worth $2,300. For some, this amount may be snack money. However, my entire investment was $3,000. You can imagine what a difficult time it was. I haven't opened any transactions for a while. I sat and thought, where am I making a mistake? Afterwards, I took note of my mistakes one by one and set rules for myself to be more disciplined.
Rule 1: Never Use High Leverage
The biggest mistake I made that accelerated the liquidation of my position was high leverage. I was using 25x, it feels good when you make a profit. Because I was winning quickly and easily. Until I lost the majority of my investment. It comes across in the posts, some people use 100x, 50x leverage. This is more of a gamble, if it works you win, what if it doesn't work? You will be liquidated. For this reason, stop using high leverage. I use 10x at most.
Rule 2: Use Cross Margin Instead of Isolated Margin
Isolated margin may seem safer to many people. Actually, the situation is not that innocent. I can explain this situation with an example. For example, you opened a short position at 10x leverage on Isolated margin. Your liquidation price will be 8% above the price you entered. In other words, when you say that a coin will drop at $0.50, the money you deposited will be liquidated when it reaches $0.54. Most people try to average correct when the price starts moving in the opposite direction. So you add to your position. Let's say you make a one-for-one addition just below the price at which you will be liquidated. This time your entry cost will be at most $0.52 and your liquidation will occur at $0.56. So gradually your liquidation will approach the current price. Even though you add one to one. Eventually your last position will be liquidated.
The reason why I find cross margin safer is that as long as you keep USDT in the futures wallet, you can keep your liquidation limit very high. Let the picture below be an example. No Liquidation Amount, even though the position is at a loss equal to the invested amount. So my position will never be liquidated based on the cash in my wallet.
Rule 3: Set Usual Profit Targets
Greed and the feeling of always gaining more is one of the weaknesses of our age. If we do not prevent this, our gains will eventually turn into losses. I usually close my position at 10% mobility. This situation can sometimes happen with 2% mobility. You should monitor your position and at appropriate points you should either take profit or close the position. I would like to share an image that summarizes the situation.
As you can see in the image, I opened a short position in the OMUSDT parity at the price of 0.66454 with 10x leverage and set my profit target as 10% according to my current analysis. When the result reached my price target, I closed my position and since the gain was over 100%, I doubled the money I invested. Although the price subsequently fell somewhat lower, it subsequently rose significantly. Currently OMUSDT is around 0.82. If I hadn't taken a profit, I would have tripled my money, let alone doubled it. So don't forget to take profit.
Rule 4: Never Open a Position with Your Entire Wallet
If you have 1000 USDT in your wallet, if you use all or half of it to open a position, the possible price movement in the opposite direction will result in losing your money. The entry amount you set for yourself is a maximum of 3% of my wallet. So, if you have 1000 USDT, you should open your position with a cost of 30 USDT so that you can intervene in possible price changes. Yes, the profit will be low, but it will be guaranteed. When one of your transactions every day results in a 10% gain, you will earn at least 30 USDT. It is up to you to increase or adjust it according to your wallet value.
Rule 5: StopLoss or Average Cost Decrease-Increase
We made our analysis and decided that x coin was ready to rise, we opened our position. But the price continued to fall. In this case, you should use stoploss or, if you are confident in your analysis, you should reduce your cost average. Since we use no more than 3% of our wallet to open the position, we have no risk of liquidation, so we can easily lower the average.
When the price change I set for myself is 9%, I add as much as my position at that price. For example, we opened a short position on x coin at 0.50, the price continued to rise. I place an order equal to the size of my position at a price of 0.545. If it comes to that price, I average my entry cost. If it does not come, I have already given an order to close the position at my pre-determined profit target. Since I have enough cash in my wallet to repeat this situation many times, I minimize my risk of loss.
Rule 6: Get Confirmation from Indicators When Choosing a Coin
The mistake most people make when choosing the coin to open a position in is that they open a position after being told by others. If you do not know fundamental and technical analysis or do not have an advisor, futures trading will eat you up. Trading on spot will be safer.
We have analysis information and how can we choose coins using this? The answer is simple, you should support your analysis with certain indicators. We examined the coin and saw that it formed a formation and broke out. We just said long position. So, do the indicators support your view? The most commonly used indicators are; RSI, MACD,BOLLINGER BANDS, STOCH RSI. There are many indicators such as KDJ, Williams %R, VOL(trading volume)... Each of these provides you with some data with different calculations. You can easily research and learn what this data is for and how it is used.
If the indicators support the analysis, a position can be opened. You must determine appropriate entry points by putting your emotions aside. For example, if your analysis says that it will rise, but the indicators say that the decline will continue, if you act emotionally and enter the position with the feeling of not missing the rise, you will end up opening a position at a price that is far from the appropriate entry. This will increase your risk level. So DON'T BE EMOTIONAL.
By not going beyond the rules I set for myself, I was able to increase my wallet value approximately 10 times in about 6 months. Now, I started withdrawing money regularly from my earnings to my bank account, as if I were paying myself a salary. Regular income is possible, follow the rules and be disciplined.
I hope these experiences will benefit you and you have a profitable day...
