So we hope you found Part 1 of the series “Basics of Perpetual Trading” helpful. If you haven’t yet read it, we highly advise you to as we will be developing upon some of the topic in greater depth in part 2:

How to Prepare for a Trade with Trading Strategies

You’re all set, you have some dollars sitting in a wallet collecting dust. They’ve been sitting there sooooo long you’d completely forgotten about them and it’s an amount you are willing to lose in the quest for Valhalla. 

So what asset(s) am I going to trade? Currently there are between 20-50 tokens you can trade on-chain, thankfully this is set to increase significantly with GMX V2 👀. 

1. Choosing the right asset to trade is part of the process even if you think it’s instinctive. Not all assets are created equal when it comes to perpetual trading. Some assets are more volatile than others, and some have more liquidity than others.
   
   

2. Choose an asset you are familiar with, one that you understand, one that you are comfortable trading. Mindset is just as important as indicators and lines on a chart.

   
   

3. Define your trading goals. What are you hoping to achieve with your perpetual trading strategy? Are you looking to make short-term profits, or are you looking to build a long-term portfolio? Once you know your goals, you can start to develop a trading strategy that is aligned with them.

   
   

4. Set your risk tolerance. How much risk are you willing to take on? Perpetual trading can be a risky activity, so it is important to set your risk tolerance before you start trading. This will help you to make informed decisions about your trading positions. This leads onto…

   
   

5. Choose the right leverage. Leverage is a powerful tool that can magnify your profits or losses. However, it is important to use leverage wisely. If you are not comfortable with risk, you should use lower leverage.

   
   

6. Use stop-losses. Stop-losses are orders that automatically close your position if the price of the asset moves against you by a certain amount. This can help to limit your losses if the market moves against you. Practice solid risk management when trading with leverage, otherwise you might find yourself with a blown up rekt trading account within minutes of entering a trade. These markets are unforgiving.

   
   

7. Monitor your positions. Once you have placed a trade, it is important to monitor your position closely. This will help you to identify potential opportunities to take profits or cut losses.

   
   

8. Be patient. Perpetual trading is not a get-rich-quick scheme. Unless you are degen-ing like a madman, on uber high leverage. But you’re more than likely to end up rekt, with a capital R, rather than sunning yourself on a beach in Portugal.  It takes time and patience to be successful. Do not expect to make a lot of money overnight, the markets will always be here.

In order to perfect your trading strategy, you might want to back test using historical data. Tradingview has plenty of built in indicators and strategies that you can combine to look at past performance. Or even look to use a demo account that uses real-time market data. This is a great way to practice your trading strategy without risking any real money.

Now you’ve got a clear trading plan in place, what trading strategies can I use to provide me with that all important edge?? 

We’ll briefly touch upon 8 common trading strategies to help you on your way to exploring your trading tendencies.

• Trend following: This strategy involves identifying the direction of the trend and trading in the same direction. Think, supertrend indicator on a 1 day time frame.

  
  

• Mean reversion: This strategy involves identifying overbought or oversold assets and trading in the opposite direction. Think RSI and price oscillator indicators.

  
  

• Scalping: This strategy involves taking small profits on short-term price movements. Quick in and out trades, great for volatile assets.

  
  

• Position trading: This strategy involves taking larger profits on longer-term price movements. Patience Padawan, patience.

  
  

• Support and resistance: This strategy involves identifying areas of support and resistance on the price chart and trading around these levels. Think range trading, liquidation levels.

  
  

• Moving averages: This strategy involves using moving averages to identify trends and to enter and exit trades. 7, 14, 21, 50 day moving averages, experiment with them in conjunction with support and resistance indicators.

  
  

• Bollinger bands: This strategy uses Bollinger bands to identify overbought and oversold conditions. Combining with RSI indicators may be a powerful tool??

  
  

• Fibonacci retracements: This strategy uses Fibonacci retracements to identify potential areas of support and resistance. Named after a Mathematician nuff said, anyone for a pineapple?

Although we’ve taken you through the more commonly used trading strategies and indicators, ultimately it will depend solely on your individual trading goals, risk tolerance, and time horizon. It’s also imperative that you research and experiment with different strategies before you find one that works for you.

If you made it this far… we have a little bonus for you. We are currently in discussions with a well known market analyst on “X” formerly known as twitter, that posts cracking informative market content for you to enjoy and learn from. Who knows it might turn into a regular slot????