How do you compound a futures position with 800U?
First, get the basics straight.
With 800U and 3x leverage on a long position, the price would have to drop by more than 30% for you to get liquidated.
When an entry signal appears, such as a dragonfly-doji W or a bullish-divergence W, it’s rare for a coin to keep dropping by more than 30%.
But that doesn’t mean it can’t drop 20%, 10%, or 5%.
Those are all within the expected range of volatility.
So, the base position for compounding on popular altcoins is 800U at 3x leverage on a long position.
Many popular altcoins have the potential to rise by 1 to 3 times after a brief shakeout following their exchange listing.
Don’t underestimate the power of 800U at 3x leverage.
For example, MARSCOIN, which we entered a few days ago, went up 3x in just a few days.
That means that even if you opened a 3x leveraged long position with 800U and did nothing else, you could still make over 800U.
If you compound your position at 3x along the way, you could potentially grow it to 2,400, 4,000, or even 8,000U.$ASMLB
On the other hand, if there’s an epic market crash and prices plunge by more than 30%, resulting in liquidation, your maximum risk is still just 800U.
And throughout this process, you can adjust your position flexibly.
For example, when you’re in profit, gradually transfer your initial capital out. Once it’s all withdrawn, you’re left trading with pure profit.
That can greatly reduce your psychological pressure.
The overall compounding process:
1. Choose a popular altcoin that’s been trending recently.
2. Wait for an entry signal.$JPMB
3. Open a 3x leveraged long position with 800U.
If the price rises, keep adding to your position and compounding as your unrealized profit grows.
If the price drops, you generally don’t need to worry about declines of 5%, 10%, or 20%. It would take a drop of more than 30% for you to get liquidated.
As mentioned at the start, when you enter based on a signal, it’s rare for the price to keep falling by more than 30%.
But that doesn’t mean it can’t drop 5%, 10%, or 20%.
That’s the logic behind using an 800U position at 3x leverage as your base for compounding.