The honest Mr. Mai @Michael_Liu93: Share some super useful stuff and talk about strong market makers.

This type of disk refers to $HIGH , Loom, Gas, Hifi, Powr, Agld, Lina, Cyber, Arpa, Mtl (and many more), which are characterized by explosive pull-ups and crashes, usually a 10-fold increase at a time, and then a 80% drop in a week. This type of opportunity is the strategy that has made me earn the most money in the secondary market in the past year. The content of this sharing will be very detailed. I hope you have the patience to read it and understand this strategy thoroughly, so that you will be able to seize such an opportunity next time.

(Before, many people in the comment area asked me how to do this kind of crazy pull-up and burst-out targets. In fact, it is really reluctant for me to share it. I thought about writing it more obscurely, but I thought that since I have decided to share it, I should be complete. There are many details in it that if I don’t explain it clearly, it will easily cause everyone to lose money.)

1. Let’s first talk about how to identify this kind of disk:

- First, the biggest common point of this type of disk is that the chips are extremely concentrated. Usually one address (or a series of related addresses) will control more than 60%-70% of the total chips (some can reach 80-90% if only the circulating disk is counted). For example, loom, hifi, and mtl are very typical examples. It is recommended to use arkham and etherscan to search for the names of these tokens to get a feel for the chip distribution of the strong market (if it is not an eth token, use the explorer of the corresponding chain, for example, gas was viewed with neo explorer at the time).

- Second, usually this type of currency has trading pairs on a Korean exchange with good spot liquidity and retail investors' sentiment to chase rising prices (most of them are upbit or bithumb that only have spot but no contracts, and there are only a few cases that rely on Binance), and then paired with several exchanges with good contract liquidity (basically a combination of Binance + bybit. Many times you see a token on Binance that only has spot starting to rise and meets several other characteristics, and then Binance suddenly announces that it will launch a contract. Basically, this type of market maker is preparing to harvest, refer to rare, loom, hifi, and the opening cyber).

- Third, the speed of rising and falling is extremely fast. Usually, a tenfold rise is completed within one month, the main rising wave will not exceed one week, and then it will fall by 80% in less than one week. After the harvest is completed, it will continue to fall and sell (in this case, don’t think about whether there will be a second wave of bottom fishing. Some people will directly abandon the market, such as Loom, which was directly removed from Binance after the harvest).

- Fourth, usually no one will pay attention to the junk small coins that are hoarded in spot goods. The spot goods are light and very easy to pull, and they will pull them in a way that makes you feel puzzled.

2. The process of the dealer’s operation:

The spot chips of the banker are extremely concentrated, and very little funds can leverage the spot to rise. Although the operation process of each plate is slightly different, the general logic is similar:

- In the first step, the banker will first build a long contract position at the bottom (from my observation, there are also bankers who do not take the long contract but only take the short position at the top, because the spot chips themselves are already long orders, and it is easy to be discovered if too many long contract orders are built).

- The second step is to leverage the first wave of spot price increases through small funds, and then drive up the contract price. At this time, many retail investors who do short-term trading will see that the price suddenly rose by 15-20% inexplicably in one day, and start shorting to make money from the market (so you can see that the Funding rate has a particularly interesting feature. The funding rate is usually the most negative in the first wave of increases and before the final crash. After the first wave of increases, retail investors and quantitative investors are the main short sellers, while in the last wave, market makers are the main short sellers. For example, you can refer to the two recent examples, Rare and High, and the pictures are attached below).

- The third step, after the first batch of retail short orders are established, the market maker will use a small amount of funds to quickly leverage the spot price to continue to drive the contract price up, and further increase the contract price through the liquidation of retail short sellers (short order liquidation is a buy order), and then the retail short orders will be liquidated in succession, thereby driving the coin price to rise in succession (many retail investors do not believe it after being liquidated, thinking that the price should fall after rising so much, and then continue to short and continue to be liquidated. Let me add here that if you want to get rid of the leeks in trading, the first thing you must abandon is the thinking of "it should rise" and "it should fall").

- The fourth step is to pull it up until all those who don't believe in it are blown up or retail investors start to switch to long positions. At this time, the dealer should first close the long position, then open a short position at the top, and then sell the spot to complete the harvest. Pay attention to the steps here! ! ! First close the long position, then open a short position, and then sell the spot. Why are the steps here important? Because the subsequent trading opportunities are excavated from here.

3. Trading opportunities

Let’s talk about the opportunity to short first. It is known that the dealer must close the long position first, then open a short position, and then smash the spot in the fourth step:

- The two actions of closing long positions and opening short positions are essentially "sell orders" reflected in the contract, so you will see a huge trading volume at the top of the contract while the price no longer rises, and the decline is usually a series of rapid cuts, such as a 5-10% drop in 2 minutes, and then the Funding rate of the contract also begins to turn rapidly from normal to negative (in many cases it will become -3%/2h, and then a price difference begins to appear between the spot and the contract, and sometimes the price difference can reach 20%. It is recommended to look at hifi and loom, where the price difference is most obvious, and the picture is attached later). This phenomenon occurs because the dealer is quickly closing long positions and opening short positions, but the spot has not started to fall. At this time, many "smart" people see that the price difference between the contract and the spot is so large, so they go long in the contract to take advantage of the spot spread, and this is what the dealer wants, because he needs the liquidity provided by the counterparty to open a short position (and many people see that the price difference between the spot and the contract is so large, and no longer dare to go short, and all the liquidity for shorting is left to the dealer).

- Finally, the spot is going to be smashed. This step is also the easiest to detect. Remember the single large addresses and associated wallets mentioned earlier? Generally, this type of dealer will use a single large address to store most of the tokens, and then 5-6 addresses to make delivery wallets. Once you find that the single large address transfers a large amount of money to the delivery wallet, the spot is about to be smashed. (The following figure uses the recent High and Powr as examples. It is recommended to use arkham and debank for address analysis, and then etherscan for alerts, so that the mobile phone can receive notifications as soon as the transfer is made)

- You must wait until all the above signals are met before opening a short position!!! You cannot open a short position as soon as a signal comes out (the signals are 1. Funding rate turns negative rapidly, and even spot contracts have price differences, 2. Multiple and rapid price cuts, 3. The main address of the on-chain dealer transfers large amounts of money to multiple delivery wallets, at least millions to tens of millions of US dollars). This strategy must not have high leverage for short positions, and should be controlled between 1-2x and with strict disciplined stop loss, especially in the early stage of the opening (in fact, I do not recommend entering in the early stage of the opening, because the dealer will pull and smash many times to explode other retail investors' short orders. You can start with a small position when you are short, and then use your short profit to roll the position, instead of directly 50x all-in fomo short when you think it is almost done). Don't think it is too late just because it has fallen by 30%-40%. This kind of more than ten times pull and smash will smash at least 75%-80%, so the safest way is to wait for the trend to break completely before chasing the short. (If a token is going to drop from 1 yuan to 0.2, whether you start shorting at 1 yuan or wait until the trend breaks to 0.7 yuan, your final profit will be 80% or 72% respectively. Yes, only 8% difference. Why not wait for all the signals to appear and rush to short? This is the most common mistake I see retail investors make when shorting altcoins, that is, you keep trying to go high with extremely high leverage. You always want to compete with the dealer for the first segment. If the dealer doesn’t go short, who will you go short?)

-Finally, let's talk about the opportunity to go long. This kind of opportunity to go long is actually harder to catch than shorting, because if you want to ambush, there will be a long period of time in the early stage, and you will never know whether it is really going to go up or it is really going to go down on your head. Even in the process of rising, the dealer will continue to quickly pull up and smash to clear those long positions with 3-5x leverage, so if you want to go long, you can only trade after the middle of the rise, which is the most dangerous time. If you want to trade this part, my suggestion is to run quickly when one of the three signals above comes out, and it is best to buy spot instead of long contracts, because the dealer will slightly drag the spot price when smashing the contract in the fourth step to attract the counterparty, so the time left for you to run with spot is slightly more than that of the contract.

Finally, I would like to remind everyone:

This kind of plate is not easy to trade, because it requires fast reaction, huge short-term fluctuations and the need to read the on-chain and contract data. I can only sort out the logic as much as possible to help everyone understand, but each plate is different. If you lack basic trading logic or even common sense, or cannot understand that different handling of transaction details will have a huge impact on the final result, then I don’t recommend you to try it, but at least after reading this post, you will know that if you don’t know how to do this kind of plate, don’t touch it.

The attached picture shows several representative cases showing the change of Funding rate, the price difference between spot and contract, and the on-chain shipment data. If there are many people interested in this kind of banker coin strategy, I can publish a real case later to share how I did it and what I thought at the time. Thank you for taking the time to read this. You must be very strong in trading because you are so patient and love to learn.