Surprising! Under Leverage, How to Avoid "Becoming Poor Overnight" in Contract Trading?
Want to play contract trading? You need to understand the rules first; otherwise, it’s like blindly betting in a casino. Mastering the basics of contracts is not just to get by but also to avoid the big pit of "liquidation".
Transaction Fees, Quietly Draining Your Wallet
First point, you need to understand the costs of contract trading! Many people think transaction fees are small, but if you don’t understand the rates, you’ll end up getting "trapped".
For example, when placing a market order, the opening and closing fee is 0.05%. It sounds small, but with leverage, those fees can skyrocket.
For instance, with 100x leverage, if you invest 100U, the fee is 10U! You haven't even made a profit yet, and you've already lost some.
Remember, leverage is not a tool for making money; it's a double-edged sword, and if you're not careful, your money can disappear.
Closing Fee, the Unavoidable "Vampire"
The closing fee is really annoying, especially when the market is about to "knock you down"; it’s like the last straw that breaks the camel's back.
If you're forcibly closed out, you’ll lose not just from market fluctuations but also that high closing fee of up to 1.5%! You might think a 1% drop is the end, but in reality, after deducting the transaction and closing fees, a 0.5% drop might lead to liquidation.
So, don’t wait until you’ve been "liquidated" to think about stop-losses.
Mark Price, Don’t Be Fooled by Fluctuations
"Mark price" sounds complicated, but it’s just a more stable price than the current one.
When setting the trigger price, use the mark price so that short-term fluctuations won’t affect you. If you don’t want to be "harvested" by the market, you need to learn how to deal with the mark price.
Isolated Margin or Cross Margin, How to Choose?
Many people can’t distinguish between isolated margin and cross margin. In simple terms:
Cross Margin Mode: All the money in your account is used as margin; the opening amount is large, and the risk is also high.
Isolated Margin Mode: Only a portion of the money at the time of opening is used as margin, with other funds remaining untouched, which reduces risk.
Both have their pros and cons, and which one you choose depends on your risk tolerance.
But remember, when there are open contracts, you cannot switch modes at will.
In the upcoming layout direction, I will guide everyone to aim for the lucrative opportunities in counterfeit projects, especially those with great potential, where an expected gain of more than 10 times is not a problem. If you want to make big money in a bull market, like + comment, and I’ll take you through the entire bull market layout!