The most stable way to trade contracts
In a rising market, go long on the strongest coins; conversely, in a falling market, short the weakest coins.
For example, at the beginning of a bull market, the strongest performers are Bitcoin and Ethereum. When there is a pullback, these two coins are the first choice for going long. In a downturn, the first choice for shorting is Bitcoin. Even if the final result shows that mainstream coins have larger declines than Bitcoin, only shorting or chasing Bitcoin can greatly avoid the risk of violent rebounds. Most traders in the crypto space are short-term traders. When trading, it is difficult to stick to ideal exit points, and they may not be very skilled at position control or rely on fluctuations to average prices. Given this situation, a good entry price is more important than anything else for most traders. Once there is profit, take some off the table to secure gains, and set the remaining portion to stop-loss at the cost price.
The essence of contract trading strategy
(1) Identify the main trend and trade in the direction of the main trend; otherwise, do not enter the market.
(2) If you are trading in the direction of the trend, entry points: 1. A new breakout point in the trend; 2. A breakout point from consolidation moving in a certain direction; 3. A pullback point in an uptrend or a rebound point in a downtrend.
(3) Positions that align with the trend will bring you substantial profits; do not exit prematurely;
(4) If the entry aligns with the larger trend and the paper profit proves you are correct, you can use a pyramid-style technique to increase your position.
(5) Keep the position unchanged until the trend reverses and you close the position.
(6) If the market trend is opposite to your entry, cut losses and run quickly.
Summary: The way of trading is to accumulate little by little, with compound interest being king. If you move away from your cost, you must not turn back into a loss. If you have made a profit, definitely take some off the table to avoid working for nothing. In summary: If you make a profit, be bold in your actions, and let the remaining amount be at the original price loss.
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