The essence of contract trading
Contract trading is a type of financial derivative trading that allows investors to profit or lose by predicting the future trends of asset prices. For some, contract trading feels like online gambling because of its characteristics of high leverage, high risk, and high returns.
The risks and rewards of contract trading
In the contract market, investors can conduct large trades with a small amount of capital. For example, using a hundred times leverage, if the price rises by one point, you can earn ten thousand; if it rises by ten points, you can earn one hundred thousand. However, this also means that if the direction is wrong, it could lead to a total loss of funds. Therefore, contract trading needs to be approached with caution.
The income of ordinary people and contract trading
Compared to the monthly salary of an ordinary person, contract trading offers the possibility of getting rich quickly. However, this possibility comes with high risk. In the cryptocurrency market, where prices fluctuate greatly, in extreme situations, the price can rise by one or two percentage points in a second. If luck is on your side, you could earn a month's salary in just one second. However, this also means you could lose a significant amount of money in a short time.
Strategies for contract trading
To avoid becoming a gambler, investors need to have their own trading system, including when to buy, when to sell, what to buy, and how to buy. Additionally, they need to be prepared to deal with mistakes, having corresponding measures when the market trend does not align with expectations. Establishing this system requires continuous learning, practice, reflection, and adjustment.
Ways to avoid liquidation
To avoid liquidation, strict position management is key. When leverage is high, the position should be low; conversely, when leverage is low, the position can be higher. Do not be overly alarmed by market fluctuations, nor let the ups and downs dictate your actions. Protect your finances and avoid exposing yourself to risk. Remember, as long as there are mountains, there's no fear of firewood running out; position management can make your investments safer and more relaxed.