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Old Leek teaches you: Wear bulletproof vests for positions! 4 Cryptocurrency Hedging Strategies That Even Novices Can Use Easily

Are you still worried about the market plummeting? Learn these 4 hedging strategies and add a layer of body armor to your positions! Spot contract matching, option protection, survival skills used by veterans, with regular platform recommendation codes.

Old Leek teaches you: Wear bulletproof vests for positions! 4 Cryptocurrency Hedging Strategies That Even Novices Can Use Easily

#老leeke teaches you: Wear bulletproof vests for positions! 4 Cryptocurrency Hedging Strategies That Even Novices Can Use Easily

Brothers, when I first entered the industry, I was just like you. Watching the account numbers jump up and down, my heartbeat was more exciting than the K-line. The bull market is smiling, the bear market mother is selling batches - everyone knows this feeling.

But after you have been around for a long time, you will find that those who can travel through bulls and bears rely not only on their accurate vision, but also on a set of "life-saving" skills. Today we are not going to talk about how to get rich, but we are going to talk about how to reduce losses during the plunge and add a layer of body armor to our positions.

What is hedging? To put it bluntly, buy insurance

Don't bother with those fancy words. Hedging means spending a little money to buy peace of mind.

To give a down-to-earth example: You open a barbecue stall. Business is booming in the summer, but cool in the winter. Afraid of the northwest wind in winter? Then check out another hotpot restaurant! Make money from barbecue in the summer and make up for it from hot pot in the winter. This is called hedging.

The same goes for putting it in the currency circle. Are you holding Bitcoin in your hand, afraid that it will fall into pieces? Then do a reverse operation, lose money here and make money there, so that the total assets will not be cut in half.

**Remember: Speculating is to make money, hedging is to survive. ** Survive first before you have a chance to eat meat.

Why do novices need hedging more? Because the mentality is easy to collapse!

I know that many people come in thinking of getting rich overnight. But the reality is that in 2025, when Bitcoin hit $126,000, the single-day amplitude still exceeded 10%. What's even more cruel is that the wave of injections in the fourth quarter saw a retracement of 30%+ in two weeks, and many leveraged dogs were blown to pieces.

Are you panicking as your profits shrink by one-third in a few days? When you panic, you cut off the flesh, when you cut off, you lose everything - I have seen this script too many times.

For novices, hedging has two core functions:

  1. Lock in profits: If you make money and are afraid of a correction, but you don’t want to sell the currency (for long-term optimism or tax avoidance), hedging can help you "freeze" the value of the legal currency.
  2. Stabilize your mentality: Account fluctuations are reduced and you can sleep well at night. If your mentality does not collapse, your operations will not be deformed.

4 practical hedging strategies, there is always one suitable for you

Don't be afraid, you don't need to know advanced mathematics. These four methods are all used by Laojiao:

  • Spot+Stablecoin: The simplest "soft defense". Never fill your position! Keep 20%-30% of U in your hands. It will be your bottom-buying bullet when prices plummet, and your purchasing power will become stronger.
  • Contract short hedging: classic gameplay. Have 1 BTC in hand and are afraid of falling? Just open a short order with 1x leverage on the contract. If the price falls, the spot price will be lost but the short position will be profitable. Once the two sides are offset, the assets will basically remain unchanged. This is called Delta Neutral, which sounds advanced, but is actually a balancing act.
  • Option Protection: It’s the same as buying car insurance. Spend a small amount of money to buy a put option. If it falls sharply, its value will rise to make up for the loss. If it rises sharply, you will only lose a "premium", and you will still eat the meat on the spot.
  • Brick-moving hedging: Used when playing on the track. For example, you are optimistic about DeFi, but you are afraid that the market will collapse. Then go long on the leading coins and short on the weak altcoins. What you earn is the difference between strength and weakness, not money from the rise or fall of the market.

Step-by-step tutorial: Use contracts to insure spot goods

Let’s use the example of growing wheat to speak in human terms.

You are a farmer (holding spot goods), harvesting wheat to sell in autumn. Afraid of falling wheat prices in autumn? Then sign a contract with the flour mill now (open a short order) and agree to sell it at the current price in the fall.

Three practical steps:

  1. Calculate how much you need to protect: For example, you have 10,000 ETH in hand that need to be protected.
  2. Open a reverse order: Go to the contract market and open a short ETH order worth $10,000 (1x leverage is the safest, don’t waste it).
  3. Dynamic Adjustment: If the price goes up, you will make a profit on spot positions and lose on short orders (you may need to make up some margin); if the price goes down, you will make a loss on spot positions and make a profit on short positions. The total assets are basically locked at around 10,000 US dollars.

**When to use it? ** For example, if there is a Federal Reserve meeting on interest rates next week, you think it will push the needle, but you don’t want to sell long-term positions. Then create a temporary hedging position and close it after the event has passed. It is very flexible.

Guide to avoid pitfalls: Don’t wear your body armor backwards!

Hedging is a good thing, but it can be more pitiful if used wrongly. Newbies often make these mistakes:

  • Over-protection: Afraid of losing money, long-term full hedging. As a result, the bull market came, and all the money earned from spot orders was eaten up by short orders, leaving only handling fees and funding rates to the exchange. Remember, hedging is a tactic, not a strategy!
  • Ignore the funding rate: In the bull market, short sellers have to pay "protection fees" (funding rate) to the longs. With long-term hedging, the money will flow slowly and slowly, but it can also eat a hole in your principal.
  • High leverage is seeking death: In order to save margin, open 10 times or 20 times short orders for hedging. There is a violent pull in the market, short orders are immediately liquidated, bulletproof vests are shattered on the ground, and spot stocks are still running naked - what are you trying to do?

Thinking Upgrade: Hedging turns you from a leek to a veteran

Learning to hedge is essentially to learn a defensive mindset. In the currency circle, those who survive may not necessarily be the fastest, but they must be the ones with the best equipment and the best knowledge of hiding knives.

When you are no longer led by the K-line every minute and know how to use tools to smooth curves and manage risks, you will have evolved from an emotional novice to a rational market player.

The most important thing: choose the right battlefield before starting!

**All brothers who want to try hedging, please listen to my advice: only play in regular big firms! **

Pheasant Exchange simply cannot handle contracts and options. Liquidity is poor, and positions cannot be closed at critical moments; security is not guaranteed, and one day the funds may be withdrawn and run away. No matter how great your strategy is, it will all be in vain if the platform collapses.

**Practice in the simulation market of a large firm first, and then make real money after you become familiar with it. ** This is the most basic respect for your hard-earned money.

We at CoinRebate only recommend top legitimate exchanges. Register with the exclusive link below, not only can you get a permanent fee discount (lower hedging costs), but the key is that the safety of your funds is guaranteed. The prerequisite for gathering wool is not to be snatched away by wolves.

Reliable platform recommendation (with the highest commission code)

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  • Bitget - It has strong copying function. Novices who want to learn hedging strategies by copying homework can check it out.

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**Choice is greater than effort. ** In the currency circle, choosing the right platform is half the battle. I wish everyone can put on body armor, the bull market will surge, the bear market will be as stable as a dog, go through the cycle, and the account will be prosperous!

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