Copy Trading Master’s Winning Strategies Review — Episode 73
Easy Copy, Smart Trade! Discover the winning strategies of our popular traders.
- Copy Trading Master’s Introduction
User Nickname: BlingBling~
Trader’s Profile: https://www.lbank.com/copy-trading/lead-trader/LBA3D77565
Trading Style: Swing Trading
2. Trade Operation Recap
Shorted ENA with 5x leverage on cross mode, opening at 1.2808 USDT, closing at 1.0335 USDT, achieving a profit of +96.55%. As shown below:
3. Trade Review
3.1 Market Background
On December 13th, MicroStrategy announced its inclusion in the Nasdaq 100 Index effective December 23rd, recognizing the institution’s founder Michael Saylor. According to SEC filings, from December 9th to 15th, MicroStrategy acquired 15,350 bitcoins at an average price of approximately $100,386 each.
On December 16th, during the Asian trading session, Bitcoin swiftly rose and surpassed the previous high of 104,500 USD, reaching up to 106,500 USD before receding. The rise in Bitcoin did not stimulate a similar increase in most altcoins, indicating market fatigue.
On December 17th, Bitcoin Magazine reported that MicroStrategy’s Bitcoin holdings have surpassed 20 billion USD in profits. The same day, US November retail sales exceeded expectations with a month-over-month increase of 0.7%. Strong retail sales combined with a rebound in inflation suggested that the Federal Reserve might pause rate cuts in January. Following this data, the US dollar index dipped shortly, and US Treasury yields narrowed.
On December 18th, the FOMC announced a rate cut of 25 basis points, bringing the federal funds rate range from 4.5%-4.75% to 4.25%-4.5%. This marked the third consecutive rate cut by the Fed since hiking rates by a total of 525 basis points from March 2022 to July 2022. Fed officials expect two 25 basis point rate cuts in 2025 and the same cut in 2026. This is consistent with the market’s pricing of two rate cuts next year, and is a significant drop from the market’s expectations of more than six rate cuts next year earlier this year.
On December 20, Arkham data revealed that Mt. Gox transferred 719.568 BTC to two new wallet addresses, valued at approximately 69.87 million USD. On the same day, the Bureau of Economic Analysis reported that the US November PCE price index increased from 2.3% the previous month to 2.4%, the highest level since July, yet below the expected 2.5%; the month-over-month increase was 0.1%, lower than the anticipated 0.2%.
On December 31, the US Chicago PMI for December was reported at 36.9, significantly below the expected 43 and the previous month’s value of 40.2. Even the most pessimistic forecast among surveyed economists was 40. The Chicago Purchasing Managers’ Index (PMI) showed a significant drop, nearing the lows seen during the COVID-19 lockdowns, indicating a severe contraction in the manufacturing sector in the Chicago area. The unexpected sharp decline in the Chicago PMI led to an increase in US Treasury bond prices during the session, while US stock markets experienced significant declines.
3.2 Trade Analysis
From December 16, 2024, to January 2, 2025, Bitcoin’s daily chart showed a sharp rise to around 108,000 USD, followed by a rapid drop to 92,000 USD and a bounce back to approximately 99,000 USD before declining again. Bitcoin found support around 92,000 USD. Trading context is illustrated in the image below:
On December 16th, as Bitcoin surged and broke past the previous high of 104,500 USD to reach 106,500 USD, it quickly fell back. This surge did not pull most altcoins along, showing signs of market exhaustion.
At that time, ENA quickly rose above 1.30 USD, reaching a peak of 1.33 USD before immediately dropping. Considering shorting ENA, positions were opened to short when the price dropped below 1.30 USD, showing weak rebounds, around 1.28 USD.
On December 18th, following the Fed’s rate cut announcement, the trading position on ENA was maintained.
On December 20th, Arkham data revealed that Mt. Gox had transferred 719.568 BTC to two new wallet addresses, valued at approximately 69.87 million USD. On the same day, the Bureau of Economic Analysis reported that the US November PCE price index rose from the previous month’s 2.3% to 2.4%, the highest level since July but below the expected 2.5%; the month-over-month increase was 0.1%, below the anticipated 0.2%.
On December 20, Arkham data revealed that Mt. Gox transferred 719.568 BTC to two new wallet addresses, valued at approximately $69.87 million. On the same day, the U.S. Bureau of Economic Analysis reported that the U.S. November PCE price index rose from 2.3% last month to 2.4%, the highest level since July, although below the expected 2.5%; the month-over-month increase was 0.1%, below the expected 0.2%.
On December 31, the U.S. Chicago PMI for December registered at 36.9, significantly below the anticipated 43, with the previous month’s value being 40.2. Even the most pessimistic forecast among surveyed economists had been 40. The Chicago Purchasing Managers’ Index (PMI) indicated a substantial decline, nearing the low levels seen during the COVID-19 lockdowns, signaling severe contraction in the manufacturing sector in the Chicago area. The unexpected sharp decline in the Chicago PMI caused U.S. Treasury bond prices to rise mid-session, while U.S. stock markets experienced significant declines.
The U.S. Chicago PMI for December came in below expectations, leading to a fallback in U.S. stocks. Bitcoin was initially affected by a decline, followed by a rebound. Bitcoin revisited the $92,000 level three times, establishing it as a critical short-term support.
On the 4-hour chart, ENA saw its price continue to decline after peaking on December 16. On January 2, the price broke through $1.00 again, rebounding in the short term. At this point, positions in ENA were gradually closed out, as shown in the chart below:
3.3 Winning Strategies Summary
In swing trading, it is essential to manage drawdowns effectively.
In the process of trading, risk and return are generally positively correlated. Therefore, controlling drawdown will inevitably sacrifice part of the investment income. Then how to strike a balance between return and drawdown and obtain long-term stable investment returns on the basis of controlling drawdown has become the core problem in investment.
There are various drawdown metrics, such as maximum drawdown, average drawdown, and conditional drawdown. Unlike other risk metrics (like variance or VaR), drawdowns depend on the path and capture important aspects of risk from an investor’s perspective, such as psychological elements (e.g., regretting decisions), which is the core of financial investment decisions.
Methods to control drawdown include:
- Using moving averages (e.g., buying when a 5-day moving average crosses above a 20-day moving average and selling when it falls below).
- Valuation-based adjustments (increasing equity positions when valuations are low and decreasing when high).
- Volatility adjustments (increasing equity positions when volatility is low and decreasing when high to maintain consistent risk exposure).
- Equity rotation strategies (dynamically holding the strongest assets and shedding the weakest).
- Diversifying into different asset classes (e.g., precious metals, index funds) to manage drawdowns effectively.
Note: Personal opinion, for reference only. Opportunities and risks abound, always do your research before investing.
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