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In the crypto world Futures Trading, **left-side trading** and **right-side trading** are two completely different trading strategies, with their core differences being **entry timing, risk preference, and trading logic**. Below is a detailed comparison of the two:
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### **1. Left-side trading (Counter-trend trading)**
**Core Concept**: Layout in advance before the market trend has clearly reversed, **"buy on the dip, sell on the rise"**, which belongs to contrarian trading.
**Features**:
- **Counter-trend operation**: Gradually buy in a downtrend (go long) or gradually sell in an uptrend (go short).
- **Subjective Judgment**: Relying on predictions of market bottoms or tops, believing that prices are oversold or overbought.
- **High risk, high reward**: If the judgment is correct, one might catch the lowest or highest point, resulting in a large profit margin; however, if the trend continues, one might get stuck or even face liquidation.
- **Applicable Scenarios**:
- After a panic sell-off in the market, but the fundamentals have not deteriorated (such as bottom-fishing after a black swan event).
- The price is close to historical strong support/resistance levels, and technical indicators show divergence (such as RSI being oversold/overbought).
**Risks in Futures Trading in the crypto world**:
- Cryptocurrency is highly volatile, and left-side trading can easily be "buried" by short-term extreme market conditions (for example, continuing to plummet by 20% leading to liquidation).
- Leverage can amplify losses, and increasing positions against the trend may accelerate the depletion of funds.
**Typical Case**:
- When Bitcoin dropped from $60,000 to $30,000, left-side traders would gradually go long, believing "it has bottomed out."
- However, if it continues to fall to $20,000, the leveraged positions may have been liquidated.
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### **2. Right Side Trading (Trend Trading)**
**Core Concept**: Get on board after the trend is clear, **"Buy on the rise initiation, sell on the decline confirmation"**, follow the market trend.
**Features**:
- **Trend Following**: Go long after an uptrend is established, or go short after a downtrend is established.
- **Objective Following**: Do not predict tops and bottoms, only follow trend signals (such as breaking through key moving averages, trend lines, or formations).
- **Low Risk and Steady**: Sacrifice a portion of profit margin for a higher success rate, suitable for leverage trading.
- **Applicable Scenarios**:
- After breaking through the key resistance level in the early stages of the bull market, get on board.
- After a sharp drop, it rebounded and stabilized at the support level, confirming the trend reversal.
**Advantages of Futures Trading in the crypto world**:
- Avoid "catching falling knives" to reduce the risk of liquidation caused by counter-trend operations.
- With leverage support, trend trading can capture the main upward/downward segments of the trend.
**Typical case**:
- Bitcoin rebounded from $30,000 to $35,000 and broke through the descending trend line, right-side traders are going long at this time.
- If the trend continues, there may be profits from subsequent increases up to $40,000.
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### **3. Key Comparison**
| **Dimension** | **Left-side Trading** | **Right-side Trading** |
|----------------|----------------------------|----------------------------|
| **Entry Timing** | Before the trend reverses (predicting bottom/top) | After the trend is confirmed (breakthrough/breakout) |
| **Risk** | High (may be trapped against the trend) | Low (follow the trend) |
| **Profit Margin** | Large (caught the turning point) | Smaller (missed part of the market) |
| **Psychological Difficulty** | High (need to counter market emotions) | Low (follow the market) |
| **Suitable Audience** | Experienced and Patient Individuals | Disciplined and Conservative Traders |
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### **4. Precautions in Futures Trading of the crypto world**
1. **Leverage Impact**:
- Left-side trading + high leverage = high risk, must strictly control position (e.g., ≤5x leverage).
- Right-side trading can moderately increase leverage (e.g., 10-20 times), but stop-loss is still required.
2. **Extreme Market Conditions**:
- In the crypto world, there are frequent spikes, and left-side trading can easily lead to instant liquidation.
- Right-side trading needs to filter out false breakouts (for example, confirming with trading volume or weekly charts).
3. **Combined Use**:
- Long-term layout can use the left side (DCA strategy), short-term operations are recommended on the right side.
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### **Summary**
- **Left-side trading** is the strategy of the "artist", relying on prediction and courage, suitable for investors with low leverage and phased position building.
- **Right-side trading** is the strategy of the "engineer", relying on discipline and rules, suitable for short-term traders of leveraged contracts.
In the crypto world futures trading, **right-side trading is more suitable for most people**, as counter-trend operations under high volatility can easily be devoured by the market. Regardless of the strategy chosen, strict risk control (stop-loss, position management) is the key to survival.