Man follows the earth, the earth follows the sky, the sky follows the Tao, the Tao follows nature, and everything in the universe must follow laws. Because of the laws, everything in the universe becomes beautiful. The law of trading is that stop loss can always be controlled by yourself. You need to build your own trading system and then execute this strategy all the time. Then this is a law that belongs to you.
In the cryptocurrency trading market, the contract trading volume of Bitcoin is 6 to 7 times that of spot trading. Why is contract trading so popular? First of all, contracts have leverage properties. For ordinary retail investors, Bitcoin is expensive and requires hundreds of thousands to buy one. In the case of small funds, ordinary retail investors will choose to buy altcoins with relatively large fluctuations. However, in the contract trading market, you can buy one with a leverage of 500 US dollars, and the profit you get is the same as holding one spot.
Secondly, there is no limit on the amount of funds for contract trading, ranging from as small as 1 US dollar to as large as 10 million US dollars. Currently, the contract leverage in CEX exchanges is as high as 120 times, and there are many myths of earning tens of millions of profits with just a few hundred US dollars. However, the contract market is also a zero-sum game, a game between players. The money you earn must be the loss of others. Below I will share some experiences in the contract trading market.
How to play to make more profit and less loss
Before sharing, please remember the eight-character motto: mentality first, trading second. Because only with a good mentality, your own trading will not produce subjectivity and fantasy. This is why you will continue to make profits when you are profitable. Once you start to lose money, your mentality will be unstable, which will lead to over-operation and explosion.
Build your own trading system
What a trader cares about is not how many indicators he can learn to use, nor how high his winning rate is. It is very important to develop a trading system that can generate stable returns. Let me give you a simple example. Basically, the winning rate of all contract traders is around 50% (calculated in half a year to a year). So why do you lose money, while only a very small number of players make money? Can't hold on to profitable orders? Hold on to losing orders? Make profits and lose them or even blow up your account? Let me share my own trading system (not strategy)
① Learn to stop loss: This is something every contract trader must do. If you can't, please leave as soon as possible. The stop loss I use here is not based on the key position shown by the K-line. For example: it will not be stopped based on breaking down or breaking through. It will be stopped based on the percentage of funds. The stop loss will be set when the account funds retreat by 5%-10%.
In the figure: white line EMA7 yellow line EMA21 purple line EMA60
For example: the daily line is above EMA60, bullish trend, the daily line falls back to EMA60, enter the market with a long order of BTC37700, buy 2BTC, and when the BTC price reaches 52900, you will make a profit of 30400 USD. If your stop loss method is to stop loss when the daily closing price falls below EMA7, then when you close the position, you will make a profit of 18246 USD, and the lowest price will fall to 10000 USD. If you use indicators to stop loss, you cannot predict the loss or even liquidation caused by extreme market conditions. If you use a moving stop loss with a profit retracement of 5% to 10% to stop loss, then the stop loss price (51380-52100) will make a profit of 29380-27400. The advantage of this is to prevent profit retracement and liquidation caused by extreme market conditions.
②Determine the trend: First determine the general direction, whether the future trend is upward or downward. In the case of upward, only key points will be selected to enter the market to go long, and in the case of downward, only key points will be selected to enter the market to go short. So how to determine the general direction? I use the EMA60 of the daily line to determine the general direction of the future. The daily K is above the EMA60, and the daily K is below the EMA60, and the trend is downward.
In the figure: white line EMA7 yellow line EMA21 purple line EMA60
③ Coin selection: When the market is rising, give priority to coins with daily K above EMA60 and relatively large transactions, generally the top 15 coins in terms of trading volume. When the market is falling, you can choose all coins that fall below EMA60. Therefore, the selection of coins for rising and falling is different, because in a bull market, the rise is generally rotated, while in a bear market, the decline always occurs simultaneously.
④Entry timing: If we judge that the market is going up, we will choose to enter the market and go long when the market retracements, such as entering the market when it retraces a certain trend line, or retracements to 4H EMA60 or daily EMA7, etc. If we judge that the market is going down, we will choose to enter the market and go short when the market retracements to a certain trend line, or retracements to 4H EMA60 or daily EMA7, etc.
⑤ Take profit: In the case of long profits, we will choose to close 50% of the position at the pressure position. If there is a pullback, we will enter the market to go long again. In the case of short profits, we will close 50% of the position at the key support position. After the position is closed for profit, it will become a floating stop loss, which means that if the floating profit is 1 million, it will become 900,000, the position will be closed directly.
⑥ Withdrawal and leverage ratio: Every trader should develop a good habit of withdrawing money when making money. The contract account is traded with fixed funds or withdraws money in a fixed ratio. For example, if you earn 100,000 USD from 50,000 USD, you can withdraw 30,000 USD, 70% of the profit or general withdrawal. In the leverage ratio, the long-term leverage ratio cannot exceed 3 times, and the short-term leverage ratio cannot exceed 10 times.
⑦ Fix your own trading system. Remember not to change your trading system at will because of the confusion of K-line. Even if you can make a profit by entering the market, it is also a gambling element. You must have a regular work and rest schedule. Don't stay up late because of losses. A bad mental state will also affect your operations. Don't make money beyond your own cognition.
Summarize
In the contract market, we should first consider risk awareness. It is most important to find a trading system that suits us according to our own personality and capital size. We should have a rough prediction of the market trend. Once we choose to enter the market, we should first consider stop loss. In the case of profit, we should consider when to stop profit and withdraw cash. Then, no technical indicator can make stable profits, so we should learn to wait when there is no market. We should understand that the logic of making money is the trend. After all, a good cook cannot cook without rice. #BTC #币安合约锦标赛 $BTC
