I believe that many of my friends are like me. Since they started playing with Bitcoin contracts, they always receive SMS notifications of liquidation from Huobi. As long as they open an order, their positions will be liquidated. It seems that the market always goes against me. When I go long, the market will fall, and when I go short, the market will rise. Is the main force just eyeing these tens of thousands of dollars of mine?

I have been in the cryptocurrency world for three years. Looking back, I have received 576 SMS messages about liquidation. The total loss is more than 400,000 yuan, but my account assets have been growing. Up to now, the account assets have reached 2.8 million yuan. You must be curious about what happened during this period.

This is how it happened. In 2017, Bitcoin ushered in a super bull market, and the price of the coin rose to 20,000 US dollars per coin, making countless people rich overnight, creating a myth of getting rich in the cryptocurrency circle. My college classmate bought two houses in Wuhan Optics Valley by speculating in cryptocurrencies. In mid-December, at a class reunion, he told me about his experience of buying houses by speculating in cryptocurrencies. I was very excited to hear it, and I carefully read all the information about Bitcoin all night, and began to enter the cryptocurrency circle.

I have always been a man of action, and the next day, I spent more than 40,000 US dollars to buy 2.3 bitcoins, thinking that I could catch up with the bull market and make a fortune. But within two days, bitcoin plummeted, and I was trapped at the top of the mountain.

There is a saying in the stock market: when the street sweepers know that the bull market is coming and rush into the stock market to buy stocks, it means that the bull market is coming to an end. The same is true in the cryptocurrency circle. Even engineers like me know that Bitcoin is soaring and we need to stock up quickly, which means that this round of the market is about to end. The only thing to be thankful for is that in addition to buying up, digital currencies can also be bought down, which is what we often call contracts.

I was stuck in the spot market, so I had to sell at a loss. I couldn't bear it, so I tried to make my money back by playing with contracts. I still remember clearly the first contract I opened. On the night of December 22, 2017, I was drinking with a group of co-workers on my construction site. My classmate called me and said that Bitcoin had plummeted and I should sell it short. It was very likely to fall below $10,000 tonight. I took out my phone in a daze and opened the market. It was indeed plummeting. At this time, I was drunk and I didn't think about it. I immediately sold it at 320 times the price at around 12,000. After opening the position, I continued to drink with my co-workers and boasted to them that I was going to get rich tonight.

Unexpectedly, after Bitcoin dropped to $10,994, it began to rebound rapidly that night and continued to rise until the next morning, reaching a high of more than $14,400, an increase of more than 20%. Not to mention 20 times, even a 5x leverage would have resulted in a margin call, and my 30,000 yuan was wasted.

After that, the more I lost, the more I wanted to get my money back. Regardless of whether there was a market or not, I traded frequently every day, getting deeper and deeper into trouble. When I lost the most, I lost 70,000 to 80,000 yuan a day. I sold all the trailers on my construction site, and eventually lost more than 400,000 yuan in total.

Although the contract has been losing money, fortunately I was very sober. During this process, I continued to study the market and look for ways to improve my winning rate. Finally, my hard work paid off. In early March last year, I learned about the option hedging strategy, which became a turning point in my contract history.

The most classic case is the 3.12 waterfall. I used 50,000 50 times to go long, and opened 20 4-hour put options for hedging, costing about $1,000. In the end, Bitcoin fell to $3,800 per coin, a drop of more than $2,200 in 4 hours. Although my contract was liquidated, I earned more than $44,000 from the options. Excluding the principal of the contract, I still earned more than $30,000, which is 44 times the principal.

After that, through the option hedging strategy, I fought back and gradually turned losses into profits. As long as the market fluctuates a little, after opening the option hedging, no matter whether the contract direction is right or not, I can eventually make a profit. This is why I made 2.8 million even though my contract was liquidated 576 times!

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