In the cryptocurrency world, there are always people losing their fortunes in contracts, but why do so many still enjoy trading?
Simply put, contracts are not meant for the average person. You need to possess a range of skills and qualities to survive in this environment. First and foremost, you must be good at managing money; this is the most important aspect. The leverage in contracts can go as high as 100 times, and a moment's carelessness can lead to losing all your money. Therefore, you need to be cautious with every trade, keeping risks within two to three percent; even for the bold, it should not exceed five to eight percent. Once you exceed ten percent, you may face a seventy percent loss, which most people cannot endure.
Secondly, you need a reliable trading strategy, and you must know when to act and when to hold back. Due to the leveraged nature of trading, where you can buy and sell at any time, the cost of learning can be significant; you need to prepare for multiple failures financially. So, start with a smaller investment at the beginning, gradually accumulate experience without rushing to increase your input.
In contract trading, a single misjudgment or counter-trend action can lead to bankruptcy. You must strictly adhere to stop-loss rules, avoid going against the trend, and not let short-term market fluctuations mislead you.
You also need to invest time and effort into learning; you must experience a full cycle of bull and bear markets, familiarize yourself with various market characteristics, and adjust your strategy based on market conditions. This requires a considerable amount of time and energy. For small retail investors, it is indeed challenging to engage in such a specialized market due to limited time and energy.
Don't invest too much money; start with a small amount to practice, and gradually accumulate experience. Keep leverage low, below two-thirds, and plan your finances well, considering buying in batches. Choose a longer trading timeframe, such as 1-hour, 4-hour, or daily levels. If you feel that your conditions are not sufficient, don’t rush into short-term contract trading, and certainly don’t treat contract trading as a profession. Before you are ready, do not invest too much money to avoid painful losses.
To be honest, the risks of contract trading are much greater than those of arbitrage and spot trading. Do not always think about those successful individuals at the top of the pyramid; they are just a tiny minority. In contract trading, behind every success often lies the failures of countless others. Therefore, I hope everyone can remain rational.
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