Here are some tips for making money in cryptocurrency contract trading:
Pre-Trade Analysis
- Fundamental Analysis: Pay attention to industry trends, policies, regulations, and significant technological developments related to cryptocurrencies, as changes in regulatory policies may have a significant impact on coin prices.
- Technical Analysis: Learn to use technical analysis tools like candlestick charts, moving averages, MACD, etc. By analyzing price trends and trading data, identify trends, support levels, and resistance levels, etc.
Capital Management
- Reasonable Allocation of Funds: Do not invest all your funds into contract trading. It is recommended to set aside a certain percentage of idle funds, such as no more than 30% of total assets, to avoid affecting personal financial status due to trading failures.
- Control Leverage: Choose leverage according to your risk tolerance. Low-risk preference traders can select 5-10x leverage, while high-risk preference traders should not exceed 50x to reduce the risk of liquidation.
Set Trading Strategies
- Set Stop-Loss and Take-Profit: Stop-loss can control losses, such as automatically closing positions when losses reach 10%-15%; take-profit can lock in profits, such as cashing out when profits reach 20%-30%.
- Gradual Position Building and Closing: Avoid one-time buying and selling. In an uptrend, gradually increase positions; in a downtrend, gradually reduce positions to minimize the impact of market volatility.
Control Trading Psychology
- Stay Calm and Rational: Do not be swayed by emotions, avoid being reluctant to close positions due to greed when prices rise, or hastily cutting losses out of fear when prices fall.
- Avoid Overtrading: Patiently wait for opportunities, do not trade frequently, and reduce mistakes caused by impulsive and blind actions.
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