Common misunderstandings of novices---inverted pyramid-style position increase

First, let me explain what inverted pyramid-style position increase is:
When BTC was $90,000, I opened a long position of 1,000U. The market was good, and BTC rose to 96,000, and I was very happy. After a round of correction, BTC reached 94,500. I felt that the correction was in place, so I added 2,000U to go long. Sure enough, I caught this opportunity, and the market soared all the way to 106,000, and then pulled back to 104,000 and hovered. I felt that I was invincible. I decisively added another 5,000U, ready to make a big move. As a result, it went up to 108,000 and then directly fell to 99,000.
During the whole long process, BTC rose from 90,000 to 99,000, a 10% increase, but let's calculate my rate of return:
1000*(99,000/90,000)+2000*(99,000/94,000) + 5000*(99,000/104,000) - 8000 = -34U
It was a waste of time and I lost a pig's trotter meal

If your mentality collapses and you do the opposite blindly, it will be even more terrible.
Remember: Don't add positions blindly! If you initially use 20% of your positions to open a position, please always keep in mind the role of these remaining positions: they help you level out your costs after you make the wrong move, find opportunities to recover your investment and quickly leave the market.

Trading is not a full-time job, and you won't get rich overnight. What we pursue is a winning rate of even 51%.

What is the contract really about?

Before playing a game, you need to fully understand the rules of the game in order to survive in it. Remember, this is a basic requirement for survival, not a secret to victory.

I have found that many students directly open contracts with 50x or 100x leverage without understanding even the most basic fee rules, which is very irrational, although I started playing that way too. But this is essentially no different from going to Macau.
Here are the basic concepts involved in contracts: (I assume everyone is an ordinary user, and the cost calculations use BNB discounts)

1. Transaction Fee: If you place a market order, the opening and closing of the position incurs a transaction fee of 0.05%, so entering and exiting costs 0.1%. It sounds small, right? But please pay attention to your leverage. If it’s 20x leverage, then the fee becomes 2%. If it’s 100x leverage, then the fee becomes 10%. This means that for a 100U contract at 100x leverage, you will incur nearly 10U in fees.
Please remember: The leverage of the contract is not meant for you to get rich overnight, but to potentially lose everything overnight.

2. Closing Fee: 1.5%, this does not mean that if you open a long position with 100U at 100x leverage, it will only close when it drops by 1%. After deducting the transaction fees and the closing fee, plus the isolated margin mode, a 0.5% drop could potentially liquidate you.
Once again, remember: at any time, do not let the system force close your position, even setting a stop-loss just slightly above the forced liquidation is better than a forced closing by the system. (Although I also do not recommend setting such a low stop-loss line)

3. Mark Price: The calculation of the mark price is somewhat complex, but you can understand it as a smoother price fluctuation than the latest price.
Recommendation: When setting any trigger prices, use the mark price.

4. Isolated Margin & Cross Margin:
Cross margin uses all the funds in your contract account as margin, regardless of how much you open a position for.
Isolated margin only uses part of the funds at the time of opening a position as margin, while other funds in the contract account remain unaffected.
Both modes have their pros and cons, switch according to the actual situation, and you cannot switch if there are outstanding contracts in your account; you must close all trades before switching.

At this point, you have just touched the doorknob to the world of contracts.
Everyone is welcome to communicate and encourage each other, and feel free to point out any areas of concern.

Haven't played in the cryptocurrency world for a long time.
Recently, I accidentally found an old Binance account and discovered that there are still over 100 BNB left from trades in 2018.
While withdrawing, I browsed around Binance and found that it has undergone significant changes, including a square for sharing and communication. Trading is still as hot as ever.
After spending a whole morning in the square, I noticed that most people prefer small-margin trades and high-leverage contracts. This reminded me of when I first started trading (motherly smile).

The BNB I have is considered unexpected wealth for me, so I plan to share some of my personal trading insights here to help everyone avoid detours.
(I haven't played for several years, so my grasp of the market may not be as good as others, but I believe that the underlying logic of trading will not change.)

Next time, I will share with you about profit-taking and stop-loss strategies for contracts.

Track Commission

The service fee has nothing to do with your profit, and the liquidation is also a fee of 25 USD.