If you don’t make contracts with assets below 1 million in the currency circle, you are just playing chicken.

Contracts use extremely small funds to leverage extremely high leverage, and are the only way to get started with small funds.

For example, if you open 10 times leverage and the price doubles, your income will not double, but 10 times.

So far this year, there is at least one wave of doubling chances and two waves of 50% chances. (I will analyze it later)

If you grab two, wouldn't 10 times the contract be 50 times the total income?

Of course, on the other hand, if it drops by 10%, you're doomed.

Hitting the blackboard, the contract is only suitable under certain special conditions.

According to the perspective of Mr. Fei Zhai, a myth in the currency circle, there are three situations that are suitable for contracts:

(1) In the trend, direction selection when long-term volatility reaches new lows.

To put it bluntly: after a big rise or fall, the price trades sideways in a very small monotonous range for more than a month. At this time, it is extremely easy to lose direction, and you can follow the trend and do TMD.

The surge that started on January 1 this year meets the conditions.

(2) In a bull market, get on the left side after a sharp retracement.

To put it bluntly: In the bull trend at the monthly and weekly levels, if you encounter a plunge of more than 20%, you can go long TMD without thinking.

The plunge on March 10 and June 11 this year met the conditions.

(3) In a bull market, the price breaks through the key resistance level at the weekly level.

To put it bluntly: In a bull trend at the monthly and weekly levels, if the price strongly breaks through the resistance point at the weekly level, you can go long TMD without thinking.

The breakthrough on March 16 this year met the conditions.

Because only in these three situations can you make a move with a heavy position and a high multiple, using a very small stop loss position to bet on a huge take profit position.

In order to achieve positive returns of the entire trading system.

Other than that, no other position is suitable for contract.

In fact, regardless of contract or spot, they all embody the most important rule in all transactions - use small to gain big.

Did you discover anything else?

Yes, the contract is only suitable for long positions.

In fact, if you look at any successful currency master, they will tell you that the real big profits must come from going long, not shorting.

Many big guys will never even go short.

Futures guru Stanley Crowe also said that it is three times more difficult to go short than to go long.

Short selling is an income deflation model (and going long is an income inflation model). That is to say, even if the price drops to zero starting from the position where you shorted, your rate of return will only be 100%, but the risk will be the same as going long. it's the same. (Think about it for yourself, I won’t explain it)

Furthermore, the currency circle is an incremental market. When the overall trend (annual basis) is going up, the expected return model of short selling is negative.

The most terrible thing is that if you get used to short selling, you will develop a bear market mentality.

When the real big market comes, you don't dare to chase the market with a heavy position, and miss the opportunity to make a 100-fold increase.

If there is a world-destroying plunge in March 2024, then the opportunity will come for 10,000 to become 10 million.