Trading is a bit of a hobby of mine and it is how I got into crypto. I do not think it is gambling as many do think. The price can either go two ways . Up or down. And you have an infinite amount of tools to help you judge which way the price is going to go. So the chances of getting it right is more probable than getting it wrong. And you have means to stop the trade if you end up getting it wrong by using stop losses. Now I don't like using stop losses in crypto because the price could dip and stop you out of a trade and 5 minutes later it could go back in the opposite direction. More on this later. I tend keep an eye on the trades so I do tend to close the position without being liquated if we are tethering on the edge. I trade on Hyperliquid and your whole balance does not get liquated anyway so you always have something to keep going with even if the worst does happen. I always start with around $30 and see how far this gets me. When I am successful I pay the capital back to my account first and foremost. This is a mind game so if I lose , I never really lost money if you get me. It gives me the ability to take more risks.
Historically when I found I hit $250 from my $30, I tend to air on the side of caution more and not go into some trades so I do that little exercise giving myself back the few pound I invested so I teach my brain to be more risky.
I have always traded Futures with 3x or 5x leverage. I also trade around the funding rate and I have had a number of different strategies over the years. The tokens that are in negative funding rate are always the most volatile and I like this. Bit of action for me. When the funding rate goes into a minus figure it means that the short contracts pay the long contracts a fee per hour so I always look out for the negative funding rates because it can really tell you where a token price is going. The funding rates function is to make sure the Futures price stays very close to the spot price. If it is not then the funding rate kicks in to bring them back in line with the spot price. So there are two things I watch out for.
A Decreasing Negative funding rate
This is when the 8 hr funding rate of a token is for example -4.50% and it starts decreasing down, say to -4.2% and then 3.5%. In this case the token went on a rally and the token has finally stopped running. Buyers have been receiving a handsome 4.50% at the top of the hour every hour. But as the funding rate decreases then buyers will pull out. You are at the top of the tracks on a rollercoaster and the only way is down now so buyers get out before the profits they received for the funding rate payouts are eaten by a large red candle. I learnt over the years not to give a shit about the actual funding rate payouts because the red candle that comes far outweights any funds I will get for buying the token. So My profit will be that red candle minus the funding rate I have to pay to be in that short position.
An Increasing negative funding rate
Buy opportunity here if the chart looks right. If you play it right you will get in before the god candle and a funding rate on the move fast into negativity means that you are in the right place. Draw a couple of trend lines to gauge if the token does go in the other direction that you are covered but it is a good sign if you see a couple of small green wicks and the sky is clear.
I generally usually like to trade the decreasing negative funding rate because at the moment Bitcoin is ranging on the bear side and the way the world economy is right now then we are in for a couple of frights. At fright in a short position is great so it is better to be short in this market.
Last Weeks Mischief.
So last week I was in this position with the usual negative funding rate tokens. They all generally last a week or two. At the moment we have $ZORA and $RESOLV as well as the newcome $ TNSR and $DYM at the party. $RESOLV had been behaving itself as regards trend lines go.
Source
You can see my buy and sell patterns on the chart. I generally bought this one and sold all the way up. But the funding rate and open interest started waning and dying down so I decided to change to selling the token. All the signs were pointing to sell. So I changed to sell and the token then started increased which was a bit shit. not to worry. I had the liquidation over the peak green candle so I am fine. The candle stayed green and the price started to go up. You can see the red wick where the price went up and up and up to nearly match the first peak green candle. I decided feck this for a barrel of monkeys and I hit the market close button before I was liquated. Well I would say around 5 seconds later or less than 5 seconds the candle turned red and the price plummeted. All the way down to the trend line where it had not been for around 2 weeks. I had made the right call but I had hit the panic button and closed my position. What a sickener. I had lost a few bob but also lost a fairly lucrative few bob in the profit I would have made. Sometimes I think we are living in a matrix in this regard. It was clear that the price increase had triggered stop losses just underneath the high and sent $RESOLV tumbling down the mountain. If only I hung on for that 5 seconds. It would have nearly been better to just risk liquidation and just stick to my principles. Anyway you win some you lose some but this one hurt. I shall continue my endeavors and you will know by my Hive balance if I am being successful or not.
Don't @ me about Futures and getting liquated. Spot markets just are not fun for me. Waiting around for paint to dry. Also memecoin trading is too fast for me and that is gambling. So Futures is just right. I have been liquidated on many an occasion and it is just part of the process now. It is what you do with the profits is the key. I got a trip to New York out of it last year so I am not doing too shabby although paying $80 in New York for two pizzas and two beers was not on my bingo card. So we will keep going and grinding. I love it for some reason. I could stay watching a chart for hours and not be bored so I am a right weirdo. When that candle goes in the right direction for you it is just great and I will never get sick of it. For some reason I do not and never have traded Hive so I must get into this. I may put a few Hive aside for this reason but the fact it is 10 cent it may be the right time to buy in and sell when it hits 12 cent. Rinse and repeat a few times to see how I get on.
This is one of the most balanced takes on trading I've read. You perfectly capture the distinction between strategic speculation and gambling - it's all about having a system, which you clearly do.
Your point about stop-losses in crypto is so valid. The volatility can indeed trigger stops prematurely, turning a temporary dip into a permanent loss. Your method of actively managing positions requires more discipline but can definitely be more effective in this market.
What really stands out is your psychological approach: starting with $30, protecting your capital, and 'paying yourself back' to maintain a risk-free mindset. That's brilliant psychology. It completely changes the emotional game and prevents the 'revenge trading' spiral so many fall into.
I'm curious - with your method of watching trades closely, how do you typically determine your risk-reward ratio before entering a position? Do you have a specific benchmark, or is it more intuitive based on the setup?
Thanks for sharing this - it's a masterclass in trading psychology.
Depends on the set up and what the previous high was, support and resistance lines depending on long or short. I find if I get too greedy the whole ship sinks so when I hit around 20% profit I usually close out. Now this may be an area of improvement because many tokens keep going and I could have ended up with 150% gains and I wait for the next entry where I should have stuck with in. 48 x 20% profits on a $20 trade initially will give you over $1 million dollars. I know it is impossible for every trade to hit the 20% profit but these tokens with a volatility of a negative funding rate can fluctuate wildly so this is what I am expecting. Take $TNSR now for example. I am in a long position and will sell at around 28 or 29 cent. Now this will give me alot more than 20% and I predict it could go past 35 cent today but I will take my gains and run like a burglar. 🤣
This is a brilliant breakdown of your strategy. I really respect your disciplined approach to taking profits at 20%—it's a habit that protects gains and prevents the 'greed trap' so many of us fall into. The math you shared is powerful proof that consistency beats chasing home runs.
I also trade and am actively working on improving my risk management and entry/exit timing. I’d be very interested in following your trades or even trading alongside you when possible. Maybe we could connect via DM? I’d be happy to share my own setups as well and help with quick market updates when you're not available.
I'm long on XAI today as TNSR is on tricky ground. I tend to trade the lone wolf approach because nobody can blame me if you lose your arse so I think I will keep going that way 😃. But I don't mind staying in touch to let you know what I am buying or selling. The easiest way to do it is just sign up to hyperliquid https://app.hyperliquid.xyz/join/BLANCHY and then just click on perps , click on funding rate and make sure the most negative tokens are at the top. Those are the ones I am trading