This time Space invited HighFreedom, a former general economic analyst at a brokerage firm, to share his trading strategies, insights on the general economy, and predictions for the future trend of the cryptocurrency market. Based on years of trading experience, HighFreedom has a deep understanding of Bitcoin, altcoins, and their relationship to traditional financial markets. This conversation also covers the growth path of novice traders and how to build a systematic trading logic.
All texts are for sharing only and do not constitute any investment advice.
TL;DR
1. About Trader HighFreedom
1. What is the trading strategy?
Making money in the direction means that during the bull market, by holding Bitcoin and holding it for a long time, you can earn profits from the overall rise in the market.
To make money from fluctuations, under the premise of controlling the leverage, after the Bitcoin price falls into a suitable price range, establish a currency standard (Bitcoin standard) to go long, pledge Bitcoin to lend some funds when the price is suitable, and then return when the price rises. Close the long position of the currency standard to increase the holdings of Bitcoin.
2. Why is such a trading strategy formed?
After several cycles, HighFreedom believes that this strategy is more in line with its own risk preference and capital management strategy, and can effectively avoid the risk of shortfall and reduce the cost of holding positions.
In the high-risk, high-retracement market environment of the currency circle, the effect achieved by selling high and buying low is essentially the same as spot trading. The advantage of the currency-based long strategy is that it can avoid shorting the main rising wave in the bull market. The disadvantage is that it is a leveraged long position, and there will be a liquidation price, so it is necessary to better control the risk of leveraged positions to a certain extent. .
3. Logic of trading strategy
Core logic: Combining directional income and volatility income, it will not short-circuit the overall growth of the market, but also further increase Bitcoin holdings through volatility operations. Especially during bull markets, use volatility tools at the right time to optimize your positions.
Risk avoidance: By going long on a currency basis, HighFreedom reduces the risk of premature selling and shorting the market, especially if the market suddenly rises rapidly.
4. Expected income
Long-term returns: During a bull market cycle, this strategy can achieve 3x to 5x overall returns.
Retracement management: HighFreedom’s expected retracement is controlled at around 20%-30%, and a 40% retracement may occur in extreme cases.
5. Things to note when implementing trading strategies
Control leverage: Strictly control the leverage level when trading, especially when currency prices are high or market fluctuations are large. It is generally recommended to control leverage within 50% to ensure a large margin of safety.
Timing: To be long on the currency standard, you need to choose the right market timing. This strategy is most suitable for bullish and volatile market conditions. This strategy is not tried during rapid main rises, because when the market is bullish or the market is very hot, the cost of doing long leverage is high (for example, in March this year, the funding rate for long Bitcoin even exceeded the annualized rate of 70 %), this strategy has a poor profit and loss ratio, especially when spot liquidity is low, to avoid excessive capital costs.
2. Overall economy, US stocks and currency circle
1. Why do “currency people” need to understand the overall economic situation in the United States, and what should be their core focus?
HighFreedom believes that there are two types of trading entities in the market: insiders and outsiders. People on the market are usually veterans of the currency circle. They generally have more coins but less money. They pay attention to the cycle of the currency circle, popular tracks, on-chain data and other indicators. In contrast, people outside the market usually enter the market through channels such as spot ETFs, which are characterized by more money and less currency. They regard Bitcoin as a risky asset and can flexibly enter and exit according to market liquidity conditions. In the early stages of the market, the participants are mainly people in the currency circle, and the market size is small, so you only need to pay attention to technical indicators and K-line patterns. However, as the market develops, funds from over-the-counter traders begin to pour in, which has a significantly greater impact on the market. Therefore, we must also pay attention to the US stock market and the overall economic situation in the United States. Similar to Bitcoin, after years of hard work, it was finally recognized and married into a wealthy family and got the wealthy family of the US stock market.
The U.S. stock market has a pyramid-like structure, with risks and returns increasing step by step from monetary funds and treasury bonds at the bottom to high-risk, high-yield dream companies at the top. HighFreedom believes that the risk and return positioning of Bitcoin can roughly benchmark the Russell 2,000 and ARKK. It has certain fundamentals and growth potential and is a kind of digital gold. Altcoins are riskier, similar to high-risk stocks in the U.S. stock market such as GME and AMC.
Source: PANews
2. How to judge the direction of this round of altcoin market through the logic of US stocks?
HighFreedom believes that when the price of Bitcoin rises to a certain level, some funds in the market may shift to riskier altcoins, triggering an altcoin market.
The movement of altcoins ultimately depends on the liquidity of the entire market. If high-risk stocks in the U.S. such as ARKK, GME, AMC, etc. perform well, it means there is sufficient liquidity and the altcoin market may also see a rise. However, liquidity is currently tight and the performance of the altcoin market may be restrained.
It is believed that the market has recently experienced a cleanup of leverage on and off the market. The cleanup on July 4 was mainly a deleveraging process within the currency circle, while the cleanup on August 5 was a deleveraging of funds outside the currency circle (mainly US stocks) and had little to do with the currency circle itself. However, the overall economic level is expected to reverse and may usher in a new bull market cycle in the fourth quarter. However, there are still different views and controversies in the market regarding the magnitude of the future tide.
3. What should be the steps for a novice to learn trading?
Basic learning: HighFreedom recommends that novice traders obtain CFA Level 1, systematically learn the basic knowledge of financial markets, and master key skills such as overall economic analysis and industry analysis.
Deliberate training: Pay attention to market dynamics every day, analyze the reasons behind the Token increase list, and cultivate market sensitivity and trading intuition. Also, learn risk management, especially how to control leverage in volatile markets.
Multi-dimensional analysis: In addition to the fundamental analysis of the financial market, you should also pay attention to on-chain data, the fundamentals of different currencies, etc., to build your own transaction logic and system.
4) What is Stop Doing List?
Excessive use of leverage: When trading on the chain, leverage levels need to be strictly controlled. The cyclical effect of on-chain transactions is obvious, and special attention should be paid to the behavior of large currency holders.
Over-reliance on indicators: With the emergence of spot ETFs, the effectiveness of on-chain indicators may be weakened, and investors need to constantly adapt to new market logic and changes. In the long run, if the overall economic logic changes, the indicators that investors pay attention to should also change accordingly.
3. Recommended traders
Fu Peng: From Northeast Securities, he has profound insights into US dollar assets, is good at system analysis, and likes to share insights.
Arthur@CryptoHayes: He has an in-depth understanding of the overall U.S. economy. Although the wording in the article is difficult, the views are valuable for reference.
Victor@VictorL1024: Fund management company, veteran in the currency circle, early miner, has unique views on the market.
Bperson sunong@BensonTWN: A veteran of the last bull market, some key cycle indicators are helpful for trading.
To view the complete interview content, you can go directly to (PANews) to read the full text.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: (PANews)
Original author: FC Talk
