1. Hedge Mode On
2. Applying the Magic Leverage System
3. Providing Control with Cash Management
I will explain these items one by one.
◽️ What is Hedge Mode and how to use it?
First of all, applying this system will give you a serious sense of comfort. Because you will be able to turn your losses into profit and minimize risks.
- Hedge Mode is a system that allows us to open both long and short on the same coin.
- By opening two opposite trades on the same coin, you can remove your liquidation levels.
- It not only allows you to make a profit, but also facilitates your risk management.
Example Strategy 1:
Let's say we opened a long trade on coin X at $1.02, but the market turned negative and the coin started to fall. If the supports will be broken and the market will fall in the general direction; We open a hedge short on the coin that falls to $ 0.99 (at that time, the long continues at a loss), then we place a take profit order between 25%-50% from the short transaction to the support levels we have determined ($ 0.95 - $ 0.92).
We then place a stop below entry for the remaining short position, for example: at $0.97. Why do we do this? Because if the trend continues upwards, we do it in order not to be left in both positions and to leave the short with a full profit. We can also add to the long at the supports and reduce the cost.
Example Strategy 2:
This time, we opened a long transaction on we put it. While the long position was progressing in profit, approximately 50% profit was sold, but not all of them were closed and they entered the short position. Immediately afterwards, we placed an example $1.12 stop-loss order on top of the long cost, so that if it falls, it will be closed with profit and not suffer a loss. Of course, the region with strong sellers was rejected at an average level of $ 1.25 and our short transaction continues with a profit, falling to the supports at 1.20, 1.15 and a long stop at $ 1.12, the short continues with a profit.. Bingo !! Double win.
I assume you understand the logic and move on to the topic of the Magic Lever.
"This strategy, which is only valid for Cross trading, works perfectly when combined with the hedge mode. Because if you have spent all your money on a single coin in futures transactions and have no more money left in the safe, you can use USDT by increasing leverage!"
Let's say you opened a Cross trade and used 10x leverage. However, you are in reverse in the transaction and need extra USDT to add, but you do not have enough left in the cash register. You also believe that the coin will rise and you want to add more.
At this point, you click on the "Set Leverage" button to continue the transaction and increase the leverage to 15x, withdrawing USDT from the margin and adding it to the safe.
Thus, you can make a new addition to the same coin with the extra amount or open a transaction in a different coin.
As you increase leverage, the amount of USDT you can use increases. Of course, your liquidation level does not change unless you make any additions, but actions such as reducing or increasing processing costs can increase the liquidation level.
So with this strategy, you can trade futures more effectively. It will be especially useful when using Hedge Mode. Because your liquidation level is close and you have no money! Increase the leverage immediately, open a reverse trade and away he goes!
Note: Do not set the leverage directly from 10x to 25x etc., increase it as much as you need, if the amount in your safe is sufficient, it is ok.
"To be successful in futures trading, it is not enough to just open the right positions; an effective cash management strategy is also necessary. Especially if high leverage rates are used, cash management becomes even more important."
Example strategy using 10x leverage for a $1000 house:
When trading with high leverage, the balance between potential return and potential risk is important. Balance the amount of risk you set and the amount of return you target for each transaction.
If you plan to trade with a $1,000 safe, determine this amount clearly. However, think of your house size not just as the amount you have available for trading, but also as a foundation for growth.
You must allocate 1% of your cash for each transaction; 50% of your cash cannot be included in a single transaction! If you do this, there will be no serious effects as each transaction has its own risk and reward.
Also determine the stop-loss and take profit levels in the transactions you enter. While stop loss levels limit possible losses, take profit levels help you take profits. Don't get out of trend by being emotional, there is no harm in taking profits!
Design your cash management strategy to focus on cumulative growth. In addition to the return you target on each trade, also consider the growth of your portfolio over time and the ability to make larger trades with increased capital.
For example, you have a starting bankroll of $1,000 and you get the following results on consecutive trades:
Process 1:
Starting deposit is $1000.
You earned 10% profit as a result of the transaction.
Earnings: $100. New safe: $1100.
Process 2:
The new safe is $1100.
As a result of the transaction, you experienced a 5% loss.
Loss: $55. New case: $1045.
3. Process:
The new case is $1045.
As a result of the transaction, you earned 15% profit.
Earnings: $156.75. New case: $1201.75.
4. Process:
The new case is $1201.75.
As a result of the transaction, you lost 8%.
Loss: $96.14. New case: $1105.61.
5. Process:
The new case is $1105.61.
As a result of the transaction, you gained 12%.
Earnings: $132.67. New case: $1238.28.
In other words, there will be no roses on our roads as we travel from point A to point B. Of course we will get tired, but we chose this path, so we must stay strong.
Additionally, motivation can be based on sudden emotional fluctuations and wane over time, while discipline offers a stable and sustainable approach. Maintaining the right balance is more important. SOURCE : https://t.me/gorkeutrade
