Shorting is not gambling. Learn these two methods to survive longer in the market and avoid unnecessary risks.

Trading in the market isn’t as mysterious as shorting might seem, but it’s also not as simple as many imagine. Many people initially think shorting is cool, only to realize later that it’s a psychological battle. In summary, there are two main approaches to shorting: choosing the right method to survive longer in a bearish market.

Low-Volatility Coins: Large Positions with Small Stop-Losses, Catching Key Trends

Mainstream low-volatility coins (like BTC) are relatively easier to control. The approach with these coins is to be more daring. It’s recommended to open larger positions but set tighter stop-losses. What’s the logic behind this? Low volatility means that once the direction is confirmed, the trend tends to move smoothly, and profit margins are sufficient.

How exactly to operate? There are two particularly good entry points. One is breakout chasing, which means entering immediately after the price breaks support levels. The other is during trendline resistance, i.e., when the price touches resistance multiple times without breaking through, increasing the probability of a reverse breakout. Both of these opportunities are quite clear and the risks are relatively controllable.

High-Volatility Altcoins: Small Positions for Testing, Catching the Uptrend

Altcoins with high volatility carry greater risks, and the strategy is completely different. For these coins, shorting should not be greedy; it must start with a “small position.” When should you open a position? Usually after hitting a peak, when the second-highest point begins to form. But there are two strict conditions that must not be violated:

First, look at the upper shadow. If the price hits a peak but leaves no obvious upper shadow, it indicates that selling pressure isn’t enough yet, so don’t short. Second, watch the funding rate. If the negative funding rate is too high (indicating excessive market bearish sentiment), the risk of a reverse rally is high, and shorting isn’t worthwhile.

The subsequent approach is “rolling positions”—start with small positions to test the waters, and once the price begins to spiral downward, gradually add to the position. This process tests psychological resilience; many people add to their position halfway and suddenly get a big rebound, wiping out previous profits or even getting liquidated.

The Most Common Pitfalls in Shorting: Addiction and Habitual Trading

Honestly, there’s only one way to make big money from shorting—rolling positions. But rolling positions is especially addictive. After a few successful trades, traders tend to develop a habit of shorting, even when market conditions change. The most dangerous moment is during a bull market, when those addicted to shorting keep doing so, only to get wiped out by a reverse move.

Futures trading amplifies this risk. A big rebound can swallow all your capital in one go. Therefore, it’s not recommended for beginners to trade futures; the risk is too high. The most successful short sellers are not the most aggressive, but those who survive the longest.