Trading in futures. Can your capital be doubled?

May 16, 2022. No. 246

If you are one of those who have been reading me for a long time, you will surely know that I have said a thousand times: I have already stopped trading, or trading is not for me. You've heard those phrases ad nauseam. It is not for less, I have lost a lot of money when it comes to trading, even with Copy Trade. Bad memories come to mind. Also, chest pain starts immediately after you buy or sell. For some strange reason, whenever I bought the price went down, and when I sold the price went up. Then the thoughts that I am going to lose would make me cut at a loss.

All this changed a few days ago. I discovered a YouTube channel (like any other) that talks about trading. But this explanation and the dynamic with which the YouTuber presents it, I loved it. I found logic in his words and in the direct ones he does. Futures trading is risky, especially since you get up to 10x, 20x, 50x and even 100x leverage if you want. It's extremely dangerous, but if you do it right, the gains are abysmal. But if you are wrong, the losses are catastrophic. You burn the account in a matter of seconds.

The issue is the indicators that are configured on the trader's screen. In effect, there are 3 indicators, apart from the classic one, that shows you the trends of where the price is going and what its next move should be. Also, when you trade CDF, called furious daily, it is to make small operations with a positive closing, taking all this into account. Resistance zones are established on the 1m time chart and the resistance points that the price has not yet been able to overcome are analyzed.

The indicators are the following:

Moving Average Convergence Divergence (MACD)

This indicator gives you a reference of the strength with which the price comes, always based on a line based on 0. If the price exceeds it, it is a signal that a purchase begins, until it weakens and begins to fall, falling from 0 and that is when a sale begins.

Based on the same page that explains its operation, what we are looking for is the following:

Long Trade Setup with MACD

• The MACD crosses above the signal line.

• The MACD histogram crosses above the zero line.

• Go long when the MACD crosses over its signal line, but only when the subsequent candle is bullish.

Short Trade Setup with MACD

• The MACD crosses below the signal line.

• The MACD histogram crosses below the zero line.

• Sell ​​when the MACD crosses below its signal line, but only when the subsequent candle is bearish.

The Relative Strength Index (RSI)

“As the name suggests, the RSI is used to determine the momentum (i.e., strength) of a trend. The indicator is made up of a line that oscillates between 0 and 100. Typically, when the RSI is above 70, the market is regarded as overbought, but it is said to be oversold when it’s below 30.”

This is one of the ones that I like the most and that you should operate even with the MACD, since they complement each other. If the line has been close to or even below 30 for a long time, it is a sign that the price is not justified. There is no sales force in the market to keep the price falling. Obviously, this is an approximation and you can make a small rise to continue falling or even continue to fall a little lower before recovering. That is why it is important that you mark the resistances that the price has had lately so that you can analyze it better.

“The RSI captures the strength of price movement relative to time and the momentum of the rise or fall of a market movement. The Relative Strength Index provides information about whether a market is in the overbought zone or the oversold zone.”

They have worked quite well for me so far, doing a bit of trading with 20x leverage. I have only had 3 losses and it is that, as a rookie, at last, I did not calculate the fee of the transactions at the time of closing the operation, and when closing it even if it was positive, the fee took me to negative. I just learned this, so I have to wait for a little higher profit to close the trade.

It is difficult to see that your account is at -20%, but knowing that the indicators and the resistance told me that I should go down or up, as the case may be. So I kept my trade and in all cases, the price has gone positive for me. On one occasion it was above the resistance zone for a long time, and I was negative. Until he couldn't take it anymore and he busted down, causing him to make a profit.

Buy Signal

With the RSI and MACD, the buy signal is generated when:

• The RSI has crossed above 50. It shows that the bullish momentum is picking up.

• The MACD histogram crosses above the 0-level, and the MACD line crosses above the signal line.

• Close the position when the RSI reaches 70.

I started with little capital, to learn. Just $52 USDT that I moved to futures. I am currently going for $67 USDT in just one trading day. I have carried out 10 operations, of which 7 have been positive and only 3 negative, due to problems with the fee as I just told you.

I have also managed to move my BCH from 3.07 up to 3,213 BCH, doing normal spot trades. I sell when I see that the price is high and the indicators tell me that it should go down a little more. So I buy them back a little lower and they increase.

For now, I keep studying, watching videos, and learning as much as I can. It's a matter of liking it, if others do it, why not me?

Wish me luck.