When trading with the 20-day moving average, you must stick to the core logic of “moving average determines direction, candlestick gives signal, position controls risk.” The specific operational details are as follows:

Moving Average Determines Direction: First, look at the slope of the 20-day moving average—if it is sloping upwards, the main trend is bullish, only go long; if it is sloping downwards, the trend is bearish, only go short; if it is flat, treat it as a sideways market and pause trading. The moving average direction on the 4-hour chart is more stable and is more suitable for beginners to use as a reference.

Candlestick Gives Signal: To go long, wait until the price is firmly above the moving average, and two consecutive candlesticks close above the moving average, with the second candlestick not breaking below the moving average—this is considered a valid signal. To go short, the price must break below the moving average, with two consecutive candlesticks closing below it, and not rebounding above the moving average. A single candlestick breakout does not count to avoid false signals.

Position Controls Risk: When the trend is clear (the moving average slope is steep and price is far from the moving average), you can open positions with 50-70% of your capital. When the trend is mild (the moving average slope is small and price is close to the moving average), only open positions with 20-30% of your capital for spot trading. For ETH contracts, set your stop loss 20-30 points outside the extreme value of the entry candlestick. This is suitable for short-term trading on 15-minute or hourly charts. For the 5-minute level, the stop loss can be even smaller. Take profit at previous highs/lows or when the moving average reverses—if a long position falls below the moving average and fails to recover, close it immediately. The same applies to short positions.

Remember: Do not open positions against the moving average direction, do not enter when the candlestick signal is unclear, and do not go all-in betting on a one-sided move. Simple logic plus strict position management is the only way to ensure each trade is well-founded.