Have you ever traded in top gainers or losers? This work is surely risky but its profit is also very high. For trading in gainers and losers, first it is very important to understand the risk of loss. If you manage your risk in this trading, then be ready for the rewards also. The main thing in this strategy which will discuss is about how you can manage your risk.
Today I will tell you a very simple and easy strategy about trading in top gainers and losers. Mostly the coins that come in top gainers are fake pumps, only a few are real growth. These coins are very risky, they can go 5-10% up or down in 1 minute. I will never suggest leverage in such volatile coins because there is a high chance of quick liquidation.
What is the first thing you have to do? Go to Binance exchange and check the list of gainers. Check the top 3 gainers and 3 losers to see on which position they are. If we see that it has pumped around 60% or dumped 60%, then there is a huge chance of correction from here. Also, check if it is at resistance level or if it has already broken out.
WAIT FOR THE 60% PUMP AND DUMP
If it is at resistance level, then we will wait for a good breakout and when it goes 60% up then I will trade such coins on the short side. I will never look at coins that are only 20-30% pumped. For this strategy, 60% pump or dump is necessary.
Many friends may have a question in their mind, with how much amount will you short or long and how much leverage will you use? It is very important to understand because risk management is the main focus in this strategy. If we work without risk management, then we will never understand our profit and loss.
TP (Take Profit), SL (Stop Loss), Buying level, Selling level and leverage are 5 important things in this strategy. Because these coins are very fast, it is necessary to use these things properly. I will trade with only $10 and 1X leverage, which almost makes my liquidation impossible.
SHORT SIDE TRADE
For example, if coin “A” after breakout has pumped 60%, I will short this coin with $10 and 1X leverage and I will close back only at 20% profit. Because I can bear $10 loss, I will not keep SL, instead I will hold until my TP hits.
In case if the coin goes 100% against my trade, then in that situation I will lose $10. But if it only corrects 20%, then I will get $2 profit. That means 20% profit of my total amount. Interesting? Yes, absolutely this is such a strategy where you can earn more profit from small amount.
Trade according to your own amount and calculate your risk. For example, I want to trade 5 coins at one time, so I will see which coins in gainers and losers have pumped or dumped 60%. I will short the 60% pumped one with $10 and long the 60% dumped one with $10.
LONG SIDE TRADE
5 THINGS TO KEEP IN MIND
I will keep 5 coins in trade and for each coin I will keep TP as 20% profit. I will not keep SL because these are fast coins, SL gets hit in pumping and dumping, that’s why it will be without SL, because in this there are very high chances of recovery.
Be careful of these 5 things the most... first, find the coins in gainers and losers that have pumped or dumped 60%, second, use 1X leverage, third, trade with only that amount which you can bear loss, keep TP at least 20% and avoid SL.
I hope you find this post interesting and I hope you will like it. If you like the post, please leave feedback in the comments section so that the next one will be even better. Thank you for sticking with me until the end.
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REMEMBER: We should prepare for the unexpected and hope for the best. Life may not be easy, but you must do your best and leave the rest to God.
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