Guide for Financial Nexus Trading Club Participants
IMPORTANT! Before you start trading with us, make sure to carefully read this guide. It will help clarify most of the points and save both our time. Re-read as many times as necessary.
To fully understand, adhere to all the points that will be discussed further.
We DO NOT take responsibility for your actions.
We share our entry points into the market and do not encourage you to take action.
If you enter or exit a trade violating our strategy and risk management, we won't be able to assist you in any way.
1. Margin trading with leverage is conducted on the Bybit exchange and only on Bybit. This is due to the functional capabilities and features of this exchange, and stops and take-profits are determined based on Bybit's charts. Spot trading is conducted on the Huobi and Binance exchanges.
2. The primary focus in trading is on BTC and ETH. We trade altcoins during specific market phases. The number of trades directly depends on the current market conditions. We have clear setups with good risk-reward ratios - we enter when they are present and wait when they are not. We may have 50 trading deals in a month or only 5. It's important to understand this.
There are pleasant market phases when one can trade frequently and actively. The market offers many good and understandable entry points. However, there are also reverse situations and periods: the market is dull, boring, and there's nothing of interest to traders.
During such times, most traders who try to trade instead of taking a break end up losing a significant portion of the profits made "before" when the market was in a favorable phase.
The best thing you can do is simply wait for the market to offer suitable conditions again.
If you subject yourself to stress and anxiety over losing positions, you'll miss the best entry opportunities.
Only by staying out of the market and waiting for the most optimal entry points do you have a chance to trade profitably.
If the majority of traders learned to sit on their hands for 50% of the time they spend trading, they would earn much more.
In the trading profession, there is even a specific term called "trader's burnout." In English, "burnout" means "emotional exhaustion." The direct path to burnout is overtrading (trading too frequently and actively). Overtrading is one of the biggest mistakes traders make.
You don't need to be in a position every second. An alternative is to be out of the market and replenish your emotional capital.
If you scrutinize the chart too closely, you can find a justification for any trade. Trading results don't grow with the frequency of operations.
- We always use stop-loss orders when trading, and we never average down a position against the price movement or increase the position size in a losing trade! This is a one-way ticket out of the market.
Position building only occurs through pyramid trading with a fixed risk limit. Pyramid trading.
To earn hundreds and thousands of percent per year, you need to take on significant risk, which jeopardizes capital preservation, but there is still a way out.
Performing these two tasks simultaneously is made possible by the strategy of adding to the position as the price moves in a favorable direction – pyramid trading. Do not confuse it with averaging down.
Pyramiding is the opposite of averaging down. The essence of this strategy is to increase your position when you're in profit.
When using this strategy, the stop-loss is adjusted in such a way that, despite the increase in position size, the potential loss remains constant at the initial level (or approximately equal).
Simultaneously, by increasing the position size through pyramiding, there is an opportunity to significantly grow capital. Essentially, for a trader who is actively trading and has limited capital, this is the only way to amass a fortune in the market.
Once a trader understands this, they need to:
1. Learn to distinguish between choppy market conditions and the beginning of a strong trend because pyramiding works best in the latter when there are no deep corrections.
2. Be in the right place at the right time, meaning having enough capital in the market when a strong movement begins.
3. Avoid overextending risk even if they've entered a favorable move. In other words, don't pyramid the position so aggressively that a small pullback leads to a margin call.
Afterward, all that remains for the trader is to wait, hope for favorable circumstances, and resist the temptation to prematurely close their position. During a favorable trend, the temptation to close or partially close the position will be strong. However, to become great rather than just a good trader, one must resist this temptation.
When significant profits are attained, sometimes, despite everything, it's necessary to forget about technical levels and focus solely on one thing – the position is profitable, and it should be held.
So, once again: all a trader trying to multiply their capital needs to do is to pyramid successfully. There's no other way to make a killing in the market except by taking risks: being in a position with substantial leverage and not closing profits quickly. Achieving this without violating risk management rules can only be done through pyramiding with the wind of luck at your back.
3. Install the TabTrader app on your smartphone. In this app, we set alarms at specified levels (stop-loss, take-profit) to react promptly when the price reaches those marks.
4. We enter positions with a risk-reward ratio of at least 1 to 2.5. This means that there will be profit even with 50% of profitable trades over the long run. But it's important not to miss trades.
5. Risk in a trade is regulated by three things: the stop price, the leverage size, and the position size.
You determine the position size in the trade yourself in such a way that the total risk on one trade is fixed and does not exceed 1%-2% of your deposit. By default, you can trade with isolated leverage of 5x.
NEW MEMBERS! Use only isolated leverage, no cross-margin!
If you forget to set a stop-loss, you risk your entire deposit. The risk you take (1% or 2%) is determined individually based on your psychological type, deposit size, risk tolerance, etc. Accordingly, a closer stop means a larger position size, and a farther stop means a smaller position size. For example:
When entering a trade on BTC with 5x leverage and a stop at -6%.
The risk for the trade is -0.6% of the total deposit with a standard entry at 10% of the deposit.
Therefore, you can take a position size of 10-15% of the total deposit.
You can go smaller, but not larger.
IMPORTANT! The goal is to keep the risk for each trade fixed. This means that in each trade, the risk should be, for example, -0.5% of the deposit or -1% of the deposit, but not varying between trades (e.g., -0.2% in one trade, -0.5% in another, -1% in a third).
Since each of our trades has a risk-reward ratio of 2.5 or higher, maintaining a fixed risk for each trade over the long term will result in a profit even if only 50% of the trades are profitable (in reality, the strike rate is significantly higher).
Once again, your goal is to keep the risk for each trade within the range of 1-2% of your deposit. Let's say you decide to keep the fixed risk for each trade at 1% of your deposit.
Imagine your trading deposit is $20,000. 1% of $20,000 is $200. Let's assume the stop for the trade is set at -6%.
If you were to enter the trade with your entire deposit without leverage and hit the stop, your loss would be -6% of your deposit (-$1,200), but it should be -1% (-$200). This means you need to take a position size that is 6 times smaller than 100%. So, it would be 100%/6 = 16.6% of your deposit.
You can take this 16.6% either with 1x leverage (essentially no leverage), which means your own funds in the trade would be 16.6%, or with isolated leverage of 3.3x, in which case your own funds in the trade would be 5% (5% * 3.3 = 16.5%).
If your risk for each trade were 2% of your deposit, you would take a position size of 33.2% of your deposit. You could also take this with 1x leverage, resulting in your own funds in the trade being 33.2%, or with isolated leverage of 5x, in which case your own funds in the trade would be 6.64%.
So, before opening each position, you adjust the leverage and position size to fit within your predefined risk limit. Where to place the stop - you decide. ONCE AGAIN!)
Let's illustrate how to quickly calculate the volume and leverage using the example of a specific trade:
Imagine the following notification comes to your channel:
Let's assume the size of your deposit is $30,000.
If you've decided to keep the risk fixed at 1% of your deposit for each trade, follow these steps:
$30,000 / 3% = $10,000 (This is the amount of funds you should allocate for the position.)
In this case, it's $35,000 (the Bitcoin price).
$10,000 / $35,000 = 0.2857 BTC
Now, you have the required quantity to enter in the "quantity" field.
By default, you can choose isolated leverage of 5x. That's it! The key is to correctly calculate the position size.
If your risk for each trade is 2%, you simply multiply the calculated value by 2.
In this case: 0.2857 BTC * 2 = 0.5714 BTC
Now, you've calculated the required quantity, which is 0.2857 BTC (equivalent to $10,000 at a Bitcoin price of $35,000), and you enter this quantity in the "quantity" field, regardless of the leverage you choose. So, you can decide on the leverage you prefer, whether it's 5x, 10x, or 20x. It doesn't really matter.
The most important thing is to use leverage in a way that the liquidation price is farther from the stop price.
The leverage size only affects the liquidation price and does not impact the profit/loss of the trade in any way.
Simply put, the amount of your own funds used as collateral:
- With 10x leverage, at $10,000 (0.2857 BTC), $1,000 will be involved. ( $1,000 * 10 = $10,000)
- With 5x leverage, it's $2,000 ($2,000 * 5 = $10,000)
- With 20x leverage, it's $500 ($500 * 20 = $10,000).
However, the commission for opening/closing a position, profit, and loss when using 10x, 5x, or 20x leverage will all be the same, completely identical. The only difference will be the liquidation price, which should be below your stop price.
Therefore, once you learn how to calculate the position size correctly and quickly, you can use 5x leverage and not worry about it.
It's important to understand this and fix it in your trading approach only once.
6. If you feel anxious about an open position, it likely means that risk management rules have been violated (such as having too high a percentage of your deposit in a trade, not setting a stop, or facing the risk of a substantial loss of your deposit). Don't do this!
7. When sharing a trade on the channel, provide the entry range, stop price, and target zones for each trade.
When the price reaches the specified target zones, consider taking partial profits and securing gains based on your own level of greed. Over time, you will find the right balance. Typically, a position is divided into 5-8 parts, and profits are locked in when the specified zones are reached.
Make sure to leave a small portion of the position in the form of a "moon bag" (10-15%) for potentially extraordinary targets. Additionally, it is strongly recommended to always lock in profits when the price moves every 5-6%, even if the trade's targets are higher.
Note: In the current market, it is extremely important to exit positions correctly while leaving a "moon bag." One approach is as follows:
Divide your position into 5-8 parts. When you have achieved a 5-6% profit on the trade, take a profit on 1/5 (1/8) of your position as per the guidelines. Then, suppose the price reaches the first target zone. Once again, take a profit on 1/5 (1/8) of your position, but this time not from the initial position size, but from what remains.
In other words, if you previously locked in profits on 1/5 of your initial position, you now take a profit on 1/5 (1/8) of the 4/5 (7/8) that are left after the first profit-taking.
This way, you always retain some portion of your position and can reap the juiciest rewards.
8. Stops: They must to be always. Set as market orders (to avoid slippage). When your open position shows a profit of +10% to +15% or more, set the stop for the trade at breakeven. To ensure that the position is closed at breakeven, taking into account exchange fees and financing rates, set the stop at a 20-30 point buffer between the entry price and the stop price.
9. Depending on our confidence in the trade setup, trades may be marked with "Risk." This means that the probability of both reaching the target and hitting the stop for the trade is higher. Typically, these are countertrend trades or trades where it's better to be in a position than out of it because there is a potential for a strong movement. However, the risk-reward ratio for such trades is quite generous.
Because the risk-reward ratio is generous, you can open positions with a risk that is half of the standard risk, and there will still be excellent profit potential if the trade goes in your favor. Whether to enter, enter with reduced volume, or skip such trades is a decision you make independently.
10. An important point and a common mistake when calculating the position size with fixed risk per trade: Always calculate the fixed risk as 1% (2%) of your initial deposit. Increasing your deposit after profitable trades is not a reason to calculate 1% based on the new deposit size. Profits that accumulate in your accounts are highly recommended to be withdrawn into real cash to enjoy and improve your life.
11. Remember that it's better not to board the train than to get under it. Be prepared in advance: acquire enough Bitcoin to transfer to the exchange. Having Bitcoin is essential when trading altcoins for which we also provide signals. For more details on how to do this advantageously, refer to point 2.
An essential lesson to keep in mind is regularly withdrawing as much profit as possible into real money and assets from your trading account. I strongly recommend following this approach. It ensures that even if you lose control at some point, you won't lose your entire deposit, only a negligible part.
Continuous, infinite profit in trading is impossible. Even the best traders sooner or later face setbacks. However, trading profitably for a specific period and earning enough money for a comfortable life is entirely achievable. In the end, the ultimate goal of trading is to improve the quality of your life by acquiring assets, and this is what every trader should strive for, by all means.
VERY IMPORTANT! Before you fully commit to trading, especially with significant sums, take a week to study and understand how the market works and, more importantly, how you react psychologically in different situations. This will help protect your capital. Wishing everyone profitable trading!