Emre Yumlu 
Cryptocurrency trading, particularly futures trading, is a high-risk and unforgiving arena. Every day, thousands of people, whether taking long or short positions, may face significant losses. In this article, we will share 25 basic rules to increase success and minimize losses in futures trading, based on our experience gained over many years. Whether you’re a beginner or an experienced trader, these rules will strengthen your trading strategy and enhance your risk management skills.
By following these rules, you can navigate the cryptocurrency market more confidently, reduce the risk of losses, and build a sustainable trading career. Illustrated with examples, particularly involving Bitcoin and altcoin pairs, these rules are not investment advice but serve as a guiding framework.
1. Make Intuitive but Low-Risk Entries
As you gain experience in futures trading, you start to intuitively sense which prices are cheap or expensive. For instance, if you’ve been closely following a coin like SUI, you might recognize that the 3.40-3.50 cent range offers a strong buying opportunity. However, your entries should always be low-risk. Keep your position size aligned with your budget and avoid excessive leverage.
2. Base Position Closures on Technical Analysis
You can make intuitive entries, but always rely on technical analysis when closing positions. For example, examine resistance levels on 4-hour or daily charts. If SUI has previously reversed at 3.50 and shows resistance there, consider taking partial profits. This secures your gains and prepares you for potential pullbacks.
3. Scale Up Positions with Technical Support
If your position starts losing value, use technical analysis when adding to it. For example, if you bought SUI at 3.50 and the price drops, identify support levels (e.g., 3.30). Add to your position in stages at these levels to lower your average cost, but ensure you don’t exceed your budget.
4. Question the Opposite Scenario
Taking long positions during a market dip or short positions during a rally can be tempting. Always question the opposite scenario. For instance, before going long when prices drop, ask, “Why is the market falling?” Similarly, before shorting, evaluate the potential for further upside. This helps curb emotional decisions.
5. Establish an Exit Strategy
If you don’t use a stop loss, an exit strategy is essential. For long-term positions, assess 4-hour and daily chart candle patterns, funding rates, and position size. For example:
- If the 4-hour candle is negative,
- If the daily candle is negative,
- If funding rates are against you, Close half the position if two criteria are negative, and exit entirely if three are negative. Accepting losses is critical for long-term success.
6. Avoid Positions You Can’t Stop Watching
Large positions often lead to constant chart-checking, which increases stress. Choose position sizes that align with your budget and won’t keep you up at night. Trust the process and avoid excessive risk.
7. Calculate Costs
In futures trading, you pay a funding fee every 8 hours. Some coins may have significantly high funding rates. Before opening a position, calculate funding fees and transaction commissions. You can reduce commissions by using exchange referral links for discounts.
8. Use Orders
Instead of constantly tracking price movements, place buy/sell orders. For example, set an automatic buy order for SUI at 3.50 to act decisively without emotional interference. This keeps your strategy disciplined.
9. Set Alerts, Don’t Track Live
Constantly watching charts increases anxiety. Use platforms like Binance or TradingView to set price alerts for your target levels. This allows you to stay on track without obsessively monitoring the market.
10. Limit Position Size
Your total position size should not exceed three times your futures wallet balance. For example, with a $6,000 balance, limit positions to $18,000 (e.g., $3,000 at 6x leverage). This is a cornerstone of risk management.
11. Avoid Multiple Cross-Margin Trades
Cross margin risks your entire balance. If you’re opening multiple positions, use isolated margin and manually manage your margin. This prevents a loss in one position from affecting others.
12. Avoid Trading on Critical Days
Major events like Fed interest rate decisions or significant announcements (e.g., Donald Trump’s crypto-related talks) can cause sharp market moves. Avoid opening positions during these times.
13. Monitor Liquidation Levels
Examine liquidation levels, especially for Bitcoin, as they increase the likelihood of price spikes. Analyze the last three days of liquidation data to manage your risk effectively.
14. Take a Market-Wide View
Study Bitcoin dominance, Tether dominance, and total market cap (Total 3). For instance, if Bitcoin dominance is declining, shorting may not be logical. A broader market perspective leads to better decisions.
15. Focus on Position Size, Not Leverage
Using $10 with 100x leverage is equivalent to $100 with 10x leverage. The key is to keep your total position size appropriate for your budget.
16. Don’t Follow the Crowd
When the market is soaring and everyone is going long, be cautious. Similarly, when everyone is shorting, consider the opposite. The Fear and Greed Index can be a useful tool here.
17. Realize Your Profits
Regularly withdraw your profits. Take out an amount weekly or monthly to cover your needs. This boosts motivation and ensures you have cash in hand during potential losses.
18. Take a Break After Consecutive Bad Days
If you’re consistently losing, pause for 3-5 days to reassess your strategy. Avoid emotional trading decisions.
19. Take a Break After Consecutive Good Days
When you’re on a winning streak, you may take excessive risks. This can lead to losing all your gains. Take a short break after good periods to stay grounded.
20. Focus on Not Losing Money
For beginners, the primary goal should be to avoid losing money. Profits will come with time, but protecting your capital is paramount.
21. Avoid Unrealistic Targets
Don’t chase lofty goals like $1 for coins like Shiba or Doge. Set realistic profit targets and learn to be satisfied.
22. Make Your Own Decisions
Don’t blindly follow online hype or others’ positions. Trust your own analysis, review charts, and make informed decisions.
23. Don’t Be Lazy
Analyzing dominance, support/resistance levels, and market trends requires effort. Treat crypto trading like a serious job.
24. Think Long-Term
Instead of aiming for big wins in a single trade, focus on growing your budget by 5-10% consistently. This leads to sustainable success.
25. Know Your Limits
Trade within your budget and avoid greed. If a profit feels significant, don’t hesitate to realize it.
These 25 rules provide a foundational guide to minimizing risk and building a long-term trading career in futures trading. The cryptocurrency market demands discipline, patience, and effort. Use these rules as a roadmap while developing your own strategies, and always prioritize risk management.
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