Hey guys, I’ve seen a few of the algorithms in the community, trade styles and often get questions around your exposure or time in market.
I think a few of you have been burnt by the beauty of perpetual fees when leverage trading! Fun isnt it! How about that HODL from 2018?
The biggest thing with trading, is getting a good position (let price come to you), but not getting in too early. Perpetual contracts are designed to force the dominating party out of positions using fees.
These funding fees can be brutal and are designed to be. Your best bet when creating automated/manual trading strategies, is either know your framework or algorithm is accurate enough to make that exposure back in profit, or put hard closes in place to close the position after X candles.
Sitting in trades for too long also has another effect, funding aside, markets shift constantly. If your exposure in a trade becomes hours, then days then weeks, you are putting yourself at significant risk.
The market has shifted, clearly the reason for entering your trade may no longer be valid? Did you long BTC at 3400? Great keep that puppy rolling! Your trading a weekly chart and you saw the zone!
But if your trading anything under 1hour limit your exposure to a factor of 12-24 so in this case maximum 24 hours. The longer your position stays open and your not taking profit the higher the chance of losing that comfortable position, or worse ending up at a huge loss. So take profit, limit your exposure and always be taking profit.
Its always better to have an algorithm or manual trade enter again than just #hodling for dear life hoping to squeeze every ounce of profit and “catch the top”.
In fact 5 trades during the same period will be net a much larger profit because each trade compounds on the one before! Do the math and see what a huge difference it makes! In saying that be careful not to overtrade either.
So limit your trade exposure and plan ahead. Have your exits ready and ignore any lost “profit” because frankly the market can turn just as quickly.
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