If you decide to enter contract trading, be sure to keep the following points in mind:
Understand the risks and stay calm: Contract trading is essentially betting small to win big, and losses are the norm. After a loss, many people impulsively open positions, while others choose to take a cooling-off period. My advice is: when losses occur frequently, pause trading and calmly adjust your strategy.
Avoid seeking quick gains: Contract trading is not a shortcut to overnight wealth. When facing losses, maintain a calm mindset, do not rush to open positions, and do not over-leverage your trades.
Follow the trend: The overall trend is key to trading. When the market shows a one-sided trend, trade in the direction of the trend, not against it. Trading against the trend often leads to significant losses, and whether you are a novice or an experienced trader, trading against the trend can lead to painful lessons.
Maintain a reasonable risk-reward ratio: The risk-reward ratio is fundamental to trading; ensure that the risk-reward ratio is at least 2:1 to open positions reasonably and increase the chances of success.
Avoid frequent trading: Frequent trading is a major taboo in contracts. Especially for novice traders, it is easy to act impulsively in the face of the market and miss good opportunities. Remember, most so-called "opportunities" may lead to losses.
Only earn money within your understanding: Before you fully understand the market and strategy, keep your trading within your understanding and avoid overextending.
Do not hold positions blindly: Holding a position in contract trading is a major taboo, especially for novices. Be sure to set stop-loss orders, act promptly on losses, and avoid letting losses escalate by holding on.
Stay humble during profitable times: During profitable times, remain calm, avoid overconfidence, and stay rational to prevent excessive confidence from leading to losses.
Summary: Contract trading is full of risks; staying calm, rational, and following the trend are key to success.