When trading using the 20-day moving average, it is essential to closely adhere to the core logic of "moving average determines direction, candlestick provides signals, position controls risk". The specific operational details are as follows:



Moving Average Direction: First look at the slope of the 20-day moving average - when it is sloping upwards, the overall direction is bullish, only long positions should be taken; when it is sloping downwards, the direction is bearish, only short positions should be taken; when it is flat, it is considered a sideways pause and no operations should be conducted. The direction of the moving average on the 4-hour chart is more stable and is more suitable for beginners to reference first.

Candlestick gives a signal: To go long, wait for the price to stabilize above the moving average, and both the closing prices of two consecutive Candlesticks must be above the moving average, while the second Candlestick does not drop below the moving average, which is considered a valid signal; to go short, the price must break below the moving average, with two consecutive Candlesticks closing below it, and no rebound back above the moving average. A single Candlestick breakout does not count, to avoid false signals.

Position control risk: When the trend is clear (the slope of the moving average is steep, and the price is far from the moving average), a position of 50-70% can be established; when the trend is flat (the slope of the moving average is small, and the price is close to the moving average), only establish a position of 20-30% in spot trading. For Ethereum contracts, set the stop loss outside the extreme value of the entry Candlestick by 20-30 points, suitable for short-term trading on the 15-minute or hourly chart level; for the 5-minute level, the stop loss can be smaller, and take profit should look at previous highs and lows or the turning point of the moving average—if a long position falls below the moving average and does not recover, close the position immediately, and the same applies to short positions.

Remember: Do not open positions against the direction of the moving average, do not enter the market when the candlestick signals are unclear, and do not over-leverage on a single direction. Simple logic + strict execution of ten position management is necessary to ensure that each trade is well-founded.
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