Crypto Majors: Riding the Primary Momentum Trend

1. The Premise: Riding the Primary Trend

First-level thinking either holds forever or tries to time every single dip and rip—both are suboptimal. The "Crypto Cornerstone" playbook is designed for patient, generational accumulation. This playbook is its tactical counterpart. It is engineered for one purpose: to actively compound capital by capturing the powerful, multi-month swings—the "meat of the move"—that define a crypto cycle.

The goal is not to catch the absolute bottom or top. The goal is to harness the primary trend, both up and down. We leverage confirmed momentum signals to stay long during the markup and flip short during the markdown. By systematically compounding gains on both sides of the market, with the optional use of modest leverage, we can significantly accelerate capital growth within a confirmed cycle. This is a playbook about discipline, velocity, and executing on confirmed, high-conviction trend signals.

2. Operating Parameters

• Asset Class: Major Digital Assets (Core Focus: BTC & ETH Perpetual Futures or Spot)

• Timeframe: Mid-High Timeframe (HTF) Strategic Positioning (4-Day to 2-Week charts)

• Style: Active Trend & Momentum Compounding (Long/Short)

• Primary Indicators: MXC Duo Crypto (for L/S Signals), MXC Price Pressure, MXC Adaptive RSI, MXC VTM

• Position Sizing: 3-10% of portfolio risk per trade (target 5%, scale to 10% only on highest conviction signals); maximum 2-3x leverage

• Execution Venue: Perpetual futures exchange recommended for long/short capability

3. Execution Protocol: The Compounding Cycle

This playbook operates as a continuous cycle, designed to keep you positioned on the right side of the primary trend. The exit for a long position is the signal to enter a short position, and vice-versa.

The Long Game (Capturing the Markup)

This is where we ride the institutional wave of buying pressure during a bull market.

Signal: The entry is a high-conviction L (Long) signal from the MXC Duo Crypto indicator on your chosen timeframe (e.g., 4-Day). This signal is strongest when it appears as the market transitions from a BASE to a RISE phase, confirmed by bullish 🟢 Bright Green on the MXC Price Pressure indicator.

Sample chart for 2W BTC - showing

• Top: Adaptive RSI, Price Pressure

• Center MXC Duo Crypto

• Bottom: RVFI and Volume Pressure (VTM) indicators

Execution:

• Entry: See Position Entry Framework below for scaled entry approach

• Leverage (Optional): If using perpetuals, leverage should not exceed 2-3x. Higher leverage introduces unacceptable liquidation risk and is against the principles of this strategy

• Hold: Your job is to hold this position through the noise. Do not exit on pullbacks. Your exit is determined by the system, not by emotion

The Short Game (Capitalizing on the Markdown)

This is where we capitalize on the distribution and subsequent decline, preserving capital and actively compounding it to the downside.

Signal: The entry is a high-conviction S (Short) signal from the MXC Duo Crypto indicator. This signal is strongest after the indicator has printed a T (Top), signaling a transition to a DROP phase, often confirmed by 🔴 Bright Red on the MXC Price Pressure indicator.

Sample chart for 4D ETH - showing

• Top: Adaptive RSI, Price Pressure

• Center MXC Duo Crypto

• Bottom: RVFI and Volume Pressure (VTM) indicators

Note: In this chart we are showing the latest buy on April 19th 2025, if you look closely you will see taht Adaptive RSI was in green, we had B (bottoming signals), RVFI shifted to greenm and we had Volume Pressure showing green bars - this was the early signal for an entry, the actual L (long) followed on May 1st 2025.

Another important consideration is that BC ETH is price action is quite choppy, we used higher parameters for both Price Filter, and Long / Short Signal Filter to higher values.

Execution:

• Entry: See Position Entry Framework below for scaled entry approach

• Leverage (Optional): Maximum 2-3x leverage

• Hold: Hold the short position as the market trends down. Your exit is the next confirmed L (Long) signal

You should learn and leverage MXC Price Pressure, Topping signals, MXC Adaptive RSI, and MXC VTM indicator - as these in confluence can give you early signals for Reversal, and T (Top) - allowing to sell at the top of the cycle.

4. Position Entry Framework

Mechanical, scaled entries reduce risk and improve average entry prices:

Three-Tier Entry System:

1. Initial Entry (40%): Execute upon the close of the signal candle

   • Use limit order at signal close price ±0.5%

   • If price moves >2% before fill, wait for retest of signal level

2. Scale-In Entry (40%): Deploy on first pullback after signal

   • Long signals: Buy on first -2% to -4% pullback from entry

   • Short signals: Sell on first +2% to +4% bounce from entry

   • Must occur within 8 candles of initial signal

3. Reserve Capital (20%): Hold for exceptional opportunities

   • Deploy only if price retraces >5% against position

   • Or use for next signal if pullback doesn't materialize

   • Automatically roll to next signal after 10 candles

Entry Execution Rules:

• All entries use limit orders to minimize slippage

• If initial entry not filled within 2 candles, use market order

• Track average entry price for position management

• Never chase price more than 2% from signal level

5. Regime Filter Rules

Not all market conditions are suitable for trend following. These filters protect capital during choppy, directionless markets:

CHOP Regime Management:

• Detection: When MXC Duo Info Table shows CHOP regime

• 30-Day Rule: If CHOP persists for >30 days:

  • Reduce all position sizes to 50%

  • Tighten entry criteria (require Price Pressure confluence)

• 45-Day Rule: If CHOP extends to 45 days:

  • Close all positions and move to cash

  • Resume only after confirmed L/S signal with regime change

• Re-Entry: Full position sizing resumes only when:

  • New L/S signal appears AND

  • Info Table shows BASE, RISE, TOP, or DROP regime

Volatility Filters:

• If 4-day ATR drops below 2% for BTC or 3% for ETH: Reduce size by 50%

• If daily candle range <1% for 5 consecutive days: Consider market unsuitable

6. Enhanced Funding Rate & Open Interest Protocol

Funding rates and open interest changes provide critical market intelligence:

Funding Rate Management:

• Moderate (0.01% - 0.03%): Normal positioning

• Elevated (0.03% - 0.05%):

  • Longs: Reduce position size by 25%

  • Shorts: Maintain full size (earning funding)

• Extreme (0.05% - 0.10%):

  • Longs: Reduce position size by 50%

  • Shorts: Consider increasing size by 25%

• Severe (>0.10%):

  • Longs: Exit perpetuals, switch to spot

  • Shorts: Maximum position size opportunity

Open Interest (OI) Dynamics:

• Rising OI + Rising Price: Bullish, maintain longs

• Rising OI + Falling Price: Bearish, maintain shorts

• Falling OI + Rising Price: Short squeeze, reduce long size

• Falling OI + Falling Price: Long liquidations, reduce short size

• OI Divergence Rule: If OI drops >20% in 24h, reduce all positions by 50%

Funding Arbitrage Opportunity:

• When funding >0.08% (240% APR):

  • Consider spot long + perp short for neutral capture

  • Allocate up to 20% of capital to this strategy

7. Second-Level Thinking: Risk & Context

A Howard Marks Caveat: This playbook's primary advantage—compounding in both directions—is also its greatest psychological challenge. Flipping from a winning long to a short requires divorcing yourself completely from market narratives and trusting the process. The system works because it removes emotion; your job is to let it.

Risk Considerations:

• Leverage is a Tool, Not a Goal: The use of 2-3x leverage is designed to amplify the gains of a confirmed, multi-month trend. Using higher leverage is not part of this strategy; it is first-level gambling and invites liquidation

• The "No Stop-Loss" Rule: This playbook does not use traditional stop-loss orders because the exit for one position is the entry for the next. This is a core part of the compounding strategy. This rule is only valid if you possess the discipline to mechanically take every L and S signal without hesitation. Missing a single signal invalidates the entire risk management framework

• Regime is Everything: This is a trend-following strategy. It will generate exceptional returns during clear RISE and DROP phases. It will underperform and generate small losses (whipsaws) during extended CHOP phases. The regime filter rules above are your protection

• Psychological Endurance: The hardest trades are often the most profitable. Flipping from a winning long to a short at a local top feels wrong but is exactly right. Trust the system

8. Implementation Checklist

Before executing this strategy, ensure:

• You have backtested the MXC Duo signals on your chosen timeframe

• You understand the three-tier entry system and have limit orders ready

• You can monitor funding rates and OI daily

• You accept the "no stop-loss" philosophy and will take every signal

• You have the psychological fortitude to flip positions mechanically

• Your maximum leverage is set to 3x and cannot be increased

• You have capital reserved for the full three-tier entry system

9. Final Words

This playbook transforms the patient accumulation of the Crypto Cornerstone strategy into an active compounding machine. It requires discipline, mechanical execution, and complete trust in the system. The enhancements—regime filters, funding management, and scaled entries—are not suggestions but requirements for long-term success.

Remember: The market doesn't care about your opinions, only your execution. Let the indicators guide you, let the regime protect you, and let the compounding accelerate your wealth creation.

The best traders are not those who predict the future, but those who adapt to the present. This system does exactly that.

Note: Past performance does not guarantee future results. This tool provides probabilistic insights, not certainties. Always use proper risk management.