In contract trading, we need to deeply understand the essence of losses and profits. From a probabilistic standpoint, the probabilities of making a profit or a loss are nearly the same when placing an order. However, considering effective stop losses, many people's chances of winning are actually below fifty percent. Therefore, the key to profitability lies in the ratio of holding time for profit positions to loss positions. This is like a protracted battle; it’s not about who gains or loses in the moment, but about the overall layout and persistence.
The essence of trends lies in emotions. When the market focus is broken, emotions begin to ferment, forming a trend. Just like in many past major events (notably a few black swan incidents), when a certain cryptocurrency breaks through a key price level, many investors follow suit, emotions run high, and thus, a trend is formed.
Therefore, to survive long-term in contract trading, using a light position is essential, but it is not a prerequisite for profit. In the early stages, one should pursue the benefits brought by a stable model, and later chase market profits. This reflects a different positioning. For example, one of my friends in the group started with $10 at the beginning of 2024, steadily following his trading strategy, and later seized several major market opportunities to achieve significant profit growth. The most recent balance he revealed was around $300,000. This is the first time I have truly seen someone make thousands or even tens of thousands of dollars from $10. (He is even active in Binance Square; I wonder if anyone can discover him.)
Establishing your own trading system, including principles for opening and closing positions, is very important. Do not make complicated assumptions; just work with familiar patterns. At the same time, hone your mindset to become a 'cold-blooded killer', waiting like a lurking hunter for the best opportunity. When the battle between bulls and bears is fierce, do not act hastily. Wait for one side to be defeated, then decisively join the winning side to reap benefits.
Stay away from the market, wait until the trading cycle closes to analyze the market in conjunction with smaller cycles. This can help avoid being emotionally influenced by fluctuating candlesticks during the trading period. Additionally, try to work with larger cycles to avoid becoming a counterparty to programmatic or short-term experts and incurring losses.
At the order placement position, avoid placing orders in ambiguous middle positions. Instead, choose key positions on daily and hourly charts, as the probability of reversal is high in middle positions. Also, use a reasonable position size, calculate stop losses in advance before opening a position, eliminate the desire for quick riches, and immediately set a stop loss after placing an order. If there is no signal, stay in cash; remind yourself that no signal is a trap for losing money. Wait for enough candlesticks to form a comprehensible game process before entering the market; avoid trading when daily and hourly charts are not performing well and the overall direction is unclear, and do not chase orders that are far from the average price.
Additionally, continuous learning and cultivating one's character also help maintain a good mindset in contract trading.
In terms of profit taking and stop loss, it's still the same saying: look at my previous posts, and feel free to ask if you don't understand. The key point to mention here is that before trading, one should set profit targets based on their own situation. Once achieved, one must firmly take profits. Don't think you're losing when you see the price continue to move in a profitable direction after taking profits. When you have this thought, you can consider this trade as a failed profit.
Note: The content of this series of courses is all original. Any similarities are purely coincidental.
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