Has the recent market volatility got you feeling uneasy? The day before, it rose by 5 points, and the next day, it dropped by 8 points. Holding onto spot positions and getting liquidated in contracts—only those who have experienced the dual slaughter know what it feels like. Many people ask me if there is a way to make money regardless of whether the market goes up or down. The answer is definitely yes! It’s the 'one loss one gain' strategy of contract hedging, but today I want to change everyone’s perception: the core of hedging is not to offset risk, but to extract the value from every fluctuation, turning volatility into your printing press.
Let’s first talk about the common pain points everyone shares: either you’re afraid of missing out and get crushed while fully invested in long positions, or you’re afraid of a drop and get caught while fully invested in short positions. Essentially, it’s betting everything on a single direction, while the nature of the market is uncertainty. Relying on predicting directions to make money is just gambling; sooner or later, you will lose it all. The 'one loss one gain' of hedging means giving up on predicting direction and embracing volatility. No matter which direction the market moves, we can all share a piece of the pie from the fluctuations.
Time for some solid advice. Today, I will discuss the core technique of 'volatility extraction': first, choose the right contract target. Not all targets are suitable for hedging; you should select mainstream targets with high volatility and good liquidity, such as Bitcoin, Ethereum, and some mainstream platform tokens. These targets have sufficient volatility and are not easily manipulated, providing a larger space for hedging price differences. Secondly, use 'leverage difference' to amplify profits. For example, opening long positions with 10x leverage and short positions with 5x leverage will result in the long position's profit being greater than the short position's loss during an upward trend; in a downward trend, although the short position has lower leverage, as long as the volatility is sufficient, it can still achieve net profit. It is important to note that the leverage difference should not be too large, or it will amplify risks; it is recommended to keep the leverage difference within 2 times.
Let me share another key detail: timing is important. Hedging cannot be done anytime, it needs to be arranged at the 'volatility critical point'. For example, before the announcement of important data (like the US CPI data, Federal Reserve interest rate decisions) or before major meetings, the market volatility will rise sharply, creating larger price movement and more opportunities for hedging profits. Additionally, arranging near support and resistance levels is also effective; for instance, when Bitcoin drops to a key support level, we can increase our long position appropriately; when it rises to a key resistance level, we increase our short position, leveraging the rebounds or pullbacks at these levels to widen the price difference.
Many people have lost money in hedging, and the problem lies in these two points: first, the positions are equal, with long and short positions being the same. In the end, it is indeed one loss and one gain, but the price difference just offsets the transaction fees, resulting in no gain; second, the stop-loss is set too rigidly, and a slight market fluctuation triggers the stop-loss, causing them to miss subsequent large fluctuations. The solution is simple: maintain a position ratio of '6:4' or '7:3', and use 'volatility stop-loss' instead of fixed point stop-loss, which can avoid interference from small fluctuations while capturing profits from large fluctuations.
I know a beginner who previously lost a lot chasing prices. After learning hedging from me, he now steadily profits 15%-20% every month. Although it's not much, he no longer has to constantly watch the market and manage his mindset. In fact, this market is not lacking in opportunities to make money; what is lacking is a stable method to earn money. Many people always think of making a quick fortune, only to be devoured by the market. Although hedging profits slowly, it is stable and suitable for most ordinary people.
Follow me@币圈罗盘 and next time I will take you through the underlying logic of contract strategy, helping you avoid detours and earn real money!#比特币流动性 $BTC $ETH
