**Capital allocation and leverage use:**
It is recommended to divide 1000U into 10 parts, trading 100U each time, with a leverage choice of 20 times. For beginners, do not use overly high leverage; 20x leverage is sufficient. If you incur losses, avoid blindly averaging down; first reflect and summarize your experience before making adjustments. If your capital shrinks to 900U, divide it into 10 parts and continue operating. **When profits reach 300U, keep 100U as principal, withdraw 200U to solidify profits**, avoiding all profits remaining in the account.
**Position management and risk control:**
In contract trading, the risk of being fully invested is very high, especially when using leverage. For example, with 10x leverage, a 10% price drop could lead to liquidation. Therefore, position management is crucial. Reasonably control each position to avoid over-investing in a single trade.
- **Loss control**: When losses exceed 2%, be on high alert, and if losses reach 6%, you should completely liquidate your position to avoid further losses.
- **Take profit strategy**: Set breakeven take profits, ensuring no losses when profits reach a certain level.
- **Rest period**: During consecutive losses or poor emotional states, be sure to stop trading for 2-3 days to adjust your mindset and strategy.
**Entry and position increase strategy:**
Beginners should not blindly chase prices. Be cautious when increasing positions after making a profit, and appropriately use the pyramid method for position increases, which means gradually increasing positions during price corrections rather than going all in blindly. **When profits reach over 200%, you can set half of your funds for a 40% drawdown take profit and keep the other half for breakeven take profit** to ensure profits are not easily given back.
**Mindset and discipline:**
The trading mindset is crucial. If you experience losses or emotional instability, it is advisable to take a break to avoid making erroneous decisions while feeling down. Only by remaining calm and rational can you better manage risk and profits.
**Advice for beginners:**
For friends with smaller capital, it is advisable to start with 30-50U, use 20x leverage, and set stop-loss in the range of 20-30 dollars. Set take-profit at a 30% profit drawdown, while making appropriate withdrawals. Increase positions gradually when you become proficient.
**Additional advice:**
- **Learning and accumulating knowledge**: In contract trading, understanding market trends, analyzing technical indicators, and studying historical data are very important. Never rely solely on others' advice.
- **Risk management is key**: Even if you use low leverage, ensure that the risk of each trade is controllable, and avoid a single liquidation affecting your entire capital.
- **Combination of long-term plans and short-term trading**: During periods of significant market volatility, accumulating profits through short-term contracts can be beneficial, while also making long-term arrangements based on market cycles, waiting for a bull market to arrive for greater returns.
**Summary:**
Contract trading is a high-risk, high-return investment method. Beginners should start with small amounts of capital, strictly control their positions, learn stop-loss and take-profit strategies, manage emotions, and gradually improve their trading skills and experience. In this market, calmness, rationality, and discipline are the keys to success.
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