First of all, survival is the first priority for development. Whether in real life or in the cryptocurrency world, you have to survive to enjoy the benefits.
Therefore, this tutorial will focus solely on the core of spot trading.
Without further ado, after all, teaching people to teach will not work, but teaching people to do things will succeed.
Assuming you have a principal of 10,000 U, you were persuaded by some irresponsible teacher to go all in on a certain cryptocurrency.
I will use ACT as an example here.
First, take a look at the historical K-line chart of ACT.
You bought ACT tokens worth 10,000 U at this minimum point (0.417 each) (ignoring transaction fees).
So you can have at most 23980.815, rounding down, you have 23,980 tokens worth 10,000 U.
Then you hold these tokens, and the next day you find that it has risen to a maximum of 0.6828 each, at which point your unrealized profit is about 6374 U.
But soon the next day it briefly broke through to 0.8098 and then fell to a closing price of 0.6086. Although profits will be given back, at this time your status is still profitable.
You feel a bit disheartened, but the motivated teacher in your group is still encouraging you to hold on. After that, it fell for 3 consecutive days, and the price also reached a closing price of 0.5128.
You have been encouraged by the motivated teacher in the group these days. After all, he was the one who made you buy at the price of 0.417. Although profits have been given back now, you still insist on holding.
In the meantime, ups and downs, by December 19, 2024, Bitcoin had already plummeted for two days, and the price of ACT was also dragged down.
The ACT tokens in your hand have not only given back profits but even have an unrealized loss of 1700 U, accounting for 17% of your initial principal.
Your current principal has reached 8300 U.
After that, it fell for more than 4 hours. You really couldn't take it anymore and wanted to argue with that teacher, but then you found out that the other party's account had been canceled.
You were suddenly at a loss, trembling all over, gritting your teeth but helpless. You don't know how the market will go later, whether it will continue to fall. You are reluctant to cut losses, but there is no good way.
Cut losses, turning unrealized losses into realized losses, but if you don’t cut losses, the price continues to drop and you will lose all your principal. Moreover, due to Bitcoin's plunge, there seems to be no hope of breaking even.
Suddenly, your good brother with the code name 'A Comical One' learned about your loss situation and immediately gave you a plan for breaking even.
Code name - Survival by Cutting Losses
Your good brother made a plan for you like this.
First, you conduct a basic analysis of ACT and find that the price on the 20th is a very dangerous point.
Because there is no support below, the whole coin was initially pulled up in price, causing it to hit a new low.
So the upper pressure on ACT is very obvious, that is, around the price of 0.4 is a clear pressure zone.
(For specific reasons, please refer to How to Understand the Market First Issue (Support, Resistance, and Trends))
Then your good brother took over your account, helping you break even while explaining things to you. (Transaction fees are waived, but the income after profit is calculated using a rounding down approach, i.e., 10.4 U income is considered as 10 U income.)
Now sell 30% of your ACT tokens, for example, sell at 0.32.
At this point, your principal has changed from 23980 ACT + 0 U to 16786 ACT + 2302 U.
When the price reaches 0.34, sell the remaining 30%, leaving you with 11750 ACT + 4014 U (2302 U + 1712 U).
Next, when the price drops to 0.29, use 30% of your U to buy, spending 1204.2 U, and acquiring 4152 ACT.
Now the principal has reached 15902 ACT + 2809.8 U.
Then the price rose to 0.31, and you sold a total of 30% of your ACT, which is 4770.6 ACT, earning 1478 U.
The principal has reached 11131.4 ACT + 4281.8 U.
When the price continues to rise to 0.33, sell 30%, which is 3339.42 ACT, earning 1102 U.
The principal has reached 7791.98 ACT + 5383.8 U.
When the price reaches 0.35, sell 30%, which is 2337.6 ACT, earning 818 U.
The principal is 5454.38 ACT + 6201.8 U.
When the price drops to 0.32, spend 30% of your U to buy ACT.
The principal has reached 11268.38 ACT + 4341.26 U.
Did you notice? Last time, when ACT was 11131.4, U was 4281.8, but now it is 4341.26.
This time, compared to the last time, U increased by 1.13%.
Then continue to fall, continue to buy, when it rises close to the pressure level of 0.4, sell it, and when it falls close to 0.29, buy it.
In this way, as long as you don't go all in to buy or sell at once, you can keep arbitraging until you break even.
You might even break even, in addition to 10,000 U, there are also some ACT tokens.