Benefuture Expert - BFE

About the operational mistakes that lead to bankruptcy, the error in position sizing or hand size is the number 1. Write this mantra on the wall and practice it every day: never risk more than 3% of your total capital on a single position. This percentage would be considered aggressive by most texts on technical analysis. Authors recommend 2%, 1%, and even 0.5%! So don’t doubt that 3% is the limit. If you stray from this mantra, you’ll go bust in less than a year, believe me! If it’s been over a year since you’ve been doing this and haven’t gone bankrupt, you’re probably putting your money into stable assets. The reason for the low percentages is that statistics show that just one wrong trade with a heavy hand can lead to your downfall, even if you succeeded in the other 99. If your hand is 50% and you lose, with the remaining 50% you would need a 100% profit to get your capital back to its initial value. You won’t have the calm or time to make that recovery trade rationally. You’ll activate the casino player mode, take even more risks, and might even sell your other assets or take loans to prove to yourself and your family that you can do it. In other words, you’ll feel terrible. If instead of putting in 50% you had put, say, 2%, you’d be keeping 98% of your capital. You’d only need a 2.04% rise to get back the 2% you lost. If your hand was 3%, with a 3.1% rise you’d be back in the game! With 20%, you’d need a 25% rise! No matter how much you doubt that a 50% drop could happen, the question isn’t if it can happen but when it will happen. Researchers have shown that if you flip a coin 1000 times, sequences of 10 heads or 10 tails in a row are rare but do happen. What about the crypto market, where not only does statistics try to take us down? Important: it’s useless to open 25 positions of 2% in strongly correlated coins because you’ll go bust the same way, so read my posts about correlation. Cheers!

Once again, the topic of stop loss comes up. Everyone's got a story to tell. If you don't use it, you'll get burned. If you do use it, you'll still take a hit, just a smaller one, but you’ll keep taking hits, and depending on how often your stop gets triggered, your capital can get wiped out in just a few hours. Even with sophisticated stats, you won't escape the liquidity-seeking bots with their killer wicks, unless you're trading chill but low-yield tokens like Bitcoin. So what's the secret? Use stops only thinking about a catastrophe, like a hack at the biggest exchange in the world, with all positions tanking at once. For daily trading, the technical literature is full of examples showing that bankruptcy isn't related to the lack of a stop (in fact, a poorly sized stop can mess you up instead of protecting you). The mistakes are elsewhere, like position size, excessive leverage, trading outside the ideal timeframe, entering at the wrong time even in the correct timeframe, among other things. I’ll make separate posts about these mistakes. Cheers!

About correlated positions, each number in parentheses represents the correlation strength of LUMIA with other tokens over the past 30 days. The closer it is to 1, the more identical their behaviors are on the chart. Negative values close to -1 indicate that while LUMIA is pumping, the other token is dumping. This simple math tool prevents you from opening 10 identical positions thinking you're diversifying your risk. Ideally, choose the token with the best setup and block the correlated ones. Use an AI tool to download daily candlestick data from the last 30 days to your computer and calculate the correlation. Forget the manual work of copying from the site and pasting into the spreadsheet. Binance provides this data through a public API. The AI tool pulls this data directly from the API via a Python script in under a minute. Don't open new positions if the correlation is above 0.75. Being more conservative, aim for 0.60, but that might block good candidates unintentionally. Ideally, you should have a bot that does this automatically for all tokens in seconds. Cheers!

The short market is a bit slow, at least for me. This was the biggest catch I got today, trading with 3x leverage. The good thing is that this coin UB is oscillating well, so my algorithm keeps snagging it at the top all the time.

This is my most important post. In a statistical analysis of 533 tokens, over 1000 days of data on the daily candlestick chart, I conclude that the maximum price deviation from a moving average (like EMA20) for the overwhelming majority of tokens usually falls between 1 and 2 ATR. Since ATR typically represents 5% (calm tokens like BTC) to 20% (volatile tokens) of the current price, the operational profit range is between 5% to 10% for calm tokens and 20% to 40% for wild tokens. This info is pure gold, as it allows you to map your profit potential while also indicating anomalous situations to avoid. For example, if the price stretch exceeds 2 ATRs from the average, it signals something out of the ordinary, like a squeeze, pump and dump, or hype from recent news. In these cases, only enter if you're willing to take huge risks. Research more about ATR and then learn how to get its value here on the Binance charts. Cheers.

Escape correlated positions. If you open 5 positions thinking you are diversifying your portfolio but there is strong correlation between them, you are actually multiplying a single bet by 5! In my environment, I can check the correlations beforehand and enter. In the image, all the positions highlighted in red background would initially be good for short. But see that most have been blocked by already open orders highlighted in blue. The algorithm prioritizes the most favorable setups at the opening and rejects redundant orders. It's worth automating your operation. Regards.

Many beginner traders make the mistake of filling the screen with dozens of indicators in an attempt to find the perfect entry, creating charts that look more like spaceship control panels. What most do not realize is that they are falling into the dangerous trap of collinearity, or multicollinearity, which occurs when you use several different oscillators built exactly from the same basic price data. By placing the RSI, MACD, Stochastic, and CCI simultaneously on the same chart, you are not obtaining multiple independent confirmations that the market will change direction, but rather looking at the same mathematical information being repeated in slightly different ways. This overlap generates a false sense of confidence, as the investor sees all the indicators flashing the same buy or sell signal and blindly believes they have discovered a guaranteed operation with a very high probability. In reality, collinearity provides only redundant information and an illusory consensus that can overload judgment and lead to disastrous decisions regarding lot size. It's exactly like if you were a construction worker on your way to a job site and decided to put six identical hammers in your toolbox. Greetings!

The financial market is, at its core, a true psychological battlefield, and it's in moments of crisis that our mind reveals itself as our greatest enemy. When volatility explodes and the charts crash violently, the natural reaction of a human isn't to act with cold logic, but rather to freeze. This state of paralysis occurs because our brain, flooded with fear and the pain of loss, enters a deep emotional conflict. Instead of accepting the reality of price action and executing the exit plan, we lock up. We start to twist, creating false hopes that the price will magically recover and ignoring clear danger signals, simply because the pain of admitting a mistake is psychologically unbearable.

It's precisely because of this human emotional fragility that automating trading decisions becomes your biggest competitive edge. Mechanical systems and automated rules don't feel fear, they don't have egos to bruise, and they don't hesitate under pressure. By automating your executions and risk management rules, you transfer the responsibility of action to the machine, shielding your capital from your own despair. Automation forces you to act based on the mathematical and objective reality of the market, not on what you wish would happen. In moments of widespread panic, while the vast majority of investors are frozen by uncertainty or making impulsive and destructive decisions, an automated system will execute the predefined strategy with absolute precision, preserving your financial and mental health in the long run. Cheers!

In my last post, I commented that any artificial intelligence for ordinary users can download data from hundreds of Binance tokens 24/7, analyze them, and make trading decisions for each of them in less than 1 minute using a regular computer or smartphone. And are you going to keep using your eyes to do your daily scan? I suppose not. Just ask the AI to create the bot for you in less than 5 minutes. You can run the bot on a home computer or use a free server. That part is easy. The hard part is how to guide the AI so that the robot has your personal touch. There will be many attempts until you achieve a stable and profitable version, but the result will be worth it. I suggest starting by writing down on paper what you consider the perfect and feasible trade, based on your experience with some tokens. Note the entry conditions, the unfolding of the trade, and exit conditions that worked. Then ask the AI to develop an algorithm capable of automatically detecting these optimal conditions while you sleep or work. For example, if you usually enter at the bottom and sell at the top, which is the first mantra they teach you (but is by no means the only way to operate!), ask the AI to automatically detect if the price is now in a valley. If it is, it should make a purchase up to the budget limit you will allocate for this operation. And don’t forget to ask the AI to sell when it detects that a peak has formed. The AI detects peaks and valleys for hundreds of tokens in milliseconds. Don’t limit yourself to a single token if you can trade dozens simultaneously. Regards.

It is possible to download data for all tokens from Binance, both from the spot market and the futures market in real time, through the public data APIs of the brokerage. This means, in practice, that you can ask any artificial intelligence to download this data and feed a robot that operates 24/7 outside of Binance but can open and close orders normally using its subscription API. This gives you a huge advantage, as you will be able to download historical data for hundreds of tokens, analyze them, and make trading decisions in less than 1 minute. The main question, however, is not the availability of data, but rather what to do with it. I promise to explain, but not in a single post.

These short trades started last night and ended this morning. Leverage x3, entry and exit at the right timing. Regards.

When to exit the operation? The answer is: when the price reaches the most obvious reference possible before reversing again. This reference tends to be the nearest peak or trough, but it is rarely reached, as the price takes many periods to return to the values it has already passed through. First, it liquidates a good part of those who bet on the favorable movement. So try to establish a more modest but more reliable reference. One of them can be the percentage volatility (ATR% ratio between the ATR and the price) at the moment of entry. You can multiply this ratio by a factor, but don't exaggerate. The price is unlikely to fluctuate more than 3ATR%. And I measure this daily using sophisticated programs for several tokens simultaneously. The safest is something between 1.5 to 2.0 ATR. The Trading View charts allow you to obtain the raw ATR. Just divide the ATR value by the price to get the ATR%. If your ATR% is 8%, it is more likely that the price will vary between 12% (1.5ATR%) and 16% (2.0ATR%) in your favor (or against!). And not outrageous 50% or 100%. There are tokens that can vary 3ATR%, 5ATR%, and even 10 ATR% in your favor, but they fall into the list of those that will either make you very rich or very poor.

Stop loss is the type of content that everyone teaches to set but everyone knows that it generally does not work for routine operations. The stop loss exists to save you from collapses, that's it. In day-to-day operations, the best thing to do is to risk at most a small fraction of the capital (around 1%) in each operation. Your stop will be 100% of 1%, meaning that even if everything goes wrong, you will lose at most 1% of the capital. This rule works better than setting a fixed stop or using miraculous rules based on volatility, supports, or resistances. All of them invariably fail because volatility can be measured but cannot be contained. Those long and fast wicks that trigger your stops are usually several standard deviations away from the average. They are rare relative to the average, but they are not rare relative to the last days or hours. If you entered the operation, it was because the price started to move. Along with the price movement, the big wicks will invariably appear. If you have a stop of 100% of the position, you will have a greater chance of escaping the wick and will not put much of the total capital at risk.

To know how stretched up or down the price is, use as a reference a moving average that is neither too slow nor too fast. I always suggest the EMA20 as a reference, that is, the exponential moving average of the last 20 periods. Preferably, use the 1d timeframe to draw the EMA20 (see my other post where I explain the reason for using only 1d for trading). After you draw the EMA20 on the daily chart, you will notice that it acts like a true magnet for the price. Every time the price stretches too much in relation to the EMA20, it will inevitably return towards it. In 1d this information is reliable, in the other timeframes it is not.

Tip of $1M: the only reliable time frame, as it represents the movements of smart money (institutional investors), is the 1d. In the 4h and 1h there is only noise and no predictions are confirmed. In the 7d everything arrives late. What speaks to you are not the voices in my head, it is the statistics: the negative correlation between price stretching and price velocity exceeds 84% in the 1d, drops to less than 40% in the 4h, and is pitiful in the time frames 4h, 1h, and 7d. The fact that the correlation between velocity and price stretching is negative and strong in the 1d reveals an important fact: if the price is already very stretched up or down, the velocity will be very close to zero or will have already reversed direction most of the time, without traps. In other tfs you will often fall into traps, as the price will not be stretched enough even for low velocities. Greetings.

What grade did this short deserve?

We continue making profitable shorts!

Hello Binancers. I did well on this short trade. I used leverage x3 and 2% of my capital. To know the entry point, I used the advanced perpetual indicators in the classic mode of the Binance app.

Greetings from Short Expert!

You will not be left to your own luck if you learn to master the tools of Trading View available in the Binance app.

In yellow, the Fibonacci levels, where the price always stalls before rising or falling.

In blue, the trend lines that pass through the maximum and minimum points, forming an ascending channel for the price.

In the background, the Ichimoku cloud with its auxiliary lines, helping to confirm support and resistance zones for the price, in addition to allowing the identification of the current market state (bullish or bearish).

Greetings from Cryptocoin Place.