If you have a capital of $5,000 and want to make a peace contract, remember, you only need to use 10% at most, which is $500, and keep the remaining $4,500 for adding to your position.
Let me share with you several ways to make money.
The first one:
Focus on one currency, only Bitcoin!
Don't believe in those fake coins, and don't be greedy. You come to the cryptocurrency circle to make money, not to lose money. I used to trade many coins at the same time, but the result was either liquidation or huge losses, or I was always stuck.
Second:
When opening an order, a stop loss must be included. If the market fluctuates greatly, the order will be adjusted far away; if the market fluctuates slightly, the order will be adjusted close.
You don't need to set a stop loss, but you must set one. No one can predict when the market will soar or plummet. If the stop loss is set well, even in extreme situations, most of the principal can be preserved. Don't set a stop loss for fear of loss, or imagine that you can get out of the trap immediately after being trapped. This idea is too naive.
The third type:
Set the forced liquidation price far away, preferably cut in half and then cut again.
The fourth type:
Adding to positions should be planned; do not act blindly.
After opening a position, the remaining capital should at least allow for four additional entries. For example, the first add-on uses $30, the second $60, the third $120, and the fourth $240. This averages the entry price, and if the market adjusts favorably, it can easily break even or even profit substantially.
The fifth type:
Use the same coin for hedging, only if there's no other option.
If you have done well with the previous steps, then opening a hedge does not mean much. But remember, this method can only add to the position once, so be clear whether it is opening a hedge or adding a fourth position.
The sixth type:
Do not use different coins to open hedges.
Some people like to use several similar currencies to open hedges, which is very undesirable. It is already difficult to study one coin, adding another complicates the operation, leading to mutual entrapment.
The seventh type:
Open positions according to bull and bear markets; do not go against the trend.
In the early stages of a bull market, do not easily open short positions; in the late stages of a bull market, do not easily open long positions. Don't let intraday market movements affect your judgment, resulting in opening at the peak or the bottom.
In fact, contracts are not designed for the average player.
1. Capital management must be in place. With leverage from 0 to 100x, a short-term loss is inevitable. The risk per trade should generally not exceed 2%-3%, with aggressive traders at 5%-8%. A risk level exceeding 8%-10% can lead to a 70% drawdown in unfavorable situations, and the average person's psychological breaking point is around 50%. Strictly enforce capital management. Many people like to work with 5x or 10x leverage, trading at levels above 4 hours, where the stop loss generally ranges from 5%-15%, leading to a single trade risk of 25%. Doing so is tantamount to seeking death. To ensure risk control while also ensuring high leverage, the trading level must be reduced to 1-hour, 15-minute, or 5-minute levels. Fewer traders can handle smaller timeframes; generally, 1h-4h is the limit for average players, while 5-15 minutes is manageable for professional traders, and even professional traders cannot manage 1-minute levels.
2. Trading system must be competent. Furthermore, honing a trading system requires long-term trading experience accumulation. The hallmark of a successful system is not deviating from the model, with clearly defined conditions. This process requires continuous iteration, undergoing the baptism of bull and bear market fluctuations, and due to leveraged trading, T+0, frequent trading is needed, preparing for 90% tuition fees. Many people start with hundreds of thousands; one thing must be clear: no matter the starting capital, it is only enough to pay tuition once, and there will be eight more times afterwards. Therefore, it is necessary to start with small funds; a few hundred or thousand is acceptable, and do not increase investment just because of profits. Withdraw profits and continue trading with small funds; in the beginning, both the system and operations will not be particularly proficient, and many mistakes and unnecessary actions are unavoidable. Many posts talk about how much they lost; in my opinion, such losses are meaningless, just paying tuition once, not even touching the door, with the learning curve not improving, which is no different from gambling.
3. Execution ability must be up to standard. Similar to last year's '519' incident, a wrong direction bet can lead to irreversible consequences; any profits made before are nullified if such a black swan event occurs. Strict stop-loss is a must; more liquidations come from counter-trend bottom fishing, like the recent luna+ incident, which also involved counter-trend bottom fishing leading to liquidation. Do not gamble on low-probability events, nor should you expect to achieve everything in one go.
4. Time and experience accumulation. A round of bull and bear market fluctuations requires familiarity with the market characteristics of different stages, adjusting strategies based on market conditions.
For small investors, the time spent in this market is limited, making it very difficult to enter such a professional market. A few suggestions are offered.
1. Test with small funds.
2. Keep leverage below 2/3 to properly plan funds based on the larger cycle; rolling position operations can be considered.
3. Trade on 1-hour, 4-hour, or daily chart levels.
4. Insufficient conditions; do not engage in contracts or short trading if not a professional; do not engage in professional trading unless absolutely necessary.
5. Do not invest more than 20,000 without completing the previous four items; just consider the loss as disposable money that you won't regret losing. In fact, in terms of difficulty, contracts are much harsher than arbitrage and spot trading in terms of results. Don't look at the few people at the top of the pyramid; those are just bait to lure retail investors in. Everyone knows that for one general who succeeds, thousands of bones lie in the dust. I hope there are fewer tragedies and more rationality. Light positions, follow the trend, stop loss. The above suggestions aim to save your wallet; do not fall into the quagmire of gambling and take the irreversible path. If you have 2,000 in your pocket, why do contracts? Making ten times a year only nets you 20,000; setting up a stall for a month is better than this. Many people end up getting stuck, insisting on making it work. The opportunity cost is much higher compared to other paths; act within your means based on conditions.
