I need to write down the thoughts I had today to remind myself:
1. At around $2100 for Ethereum, do not increase your short position. The risk of shorting at this level is very high. Moreover, the risk-to-reward ratio is not favorable; the risk is too great and the potential reward is too small. For example, if you short 2 million RMB worth of Ethereum at the $2100 level with a 2x short position, as soon as it rises to 3150 points, the 2x short position will be liquidated, resulting in a loss of 2 million RMB. If it drops to around 1550 points in the short term, you can only earn 520,000 RMB from that 2 million, which is too small a reward for such a high risk. Given that Ethereum has already dropped this much, it is quite possible for it to rebound back to the liquidation price of 3150 points. Although around 1500 points may not be the true bottom, it is logical to consider 1500 points as a bottom. Therefore, the conclusion is that around $2100, no new short positions should be added. I need to constantly remind myself of this to suppress my urge to short. I have a locked long position that I need to unlock at around $1550 for Ethereum.
2. It is not advisable to go long around 2100 dollars; this position is not the bottom. The bottom for Ethereum will be at least below 1550 dollars. However, the 1550 dollar position is very likely not the final bottom, so at 1550 dollars, I can only unlock the trapped long position (by closing the corresponding short position to unlock the corresponding long position, which is equivalent to opening a new long position). I can only unlock the trapped long position and should not add other bottom-fishing long positions. Because the real bottom may be lower. It is necessary to retain funds to bottom-fish when the real bottom arrives.
3. To prevent Ethereum from truly being at the bottom around 1500 dollars, I need to add a small, unleveraged long position at the price of 1500 dollars. This small, unleveraged long position is to guard against Ethereum suddenly rising to 3000 dollars. At the same time, I need to set a stop-loss price at breakeven of 1510 dollars. If it falls below 1510 dollars, I will close this small long position, so it neither wastes bottom-fishing funds nor prevents the probability that 1500 dollars is the true bottom. The price of 1500 dollars is already low enough; even if it gets trapped at this position without rebounding and continues to fall, the price of 1500 dollars can also be used as a long-term long position for several years.$ETH
