Don't put all your eggs in one basket, and don't put all your baskets in one cart.
Many people say that as long as you are still playing contracts, there will always be a day when you will return to zero. What I want to say is that as long as you always strictly abide by the principle of small positions, and the maximum margin used never exceeds 25% of the contract account (after adding margin to prevent liquidation), then returning to zero will not have much to do with you.
If we play with proportions instead of absolute values, we can try to prevent this situation from happening.
The only thing that is uncontrollable is the weakness of human nature - greed, anger, ignorance, doubt and laziness - adding to positions beyond the line; being a little slow in taking profit and finally being trapped, etc.
Well, after being locked in, should I stop loss or hold the order? This is a question, and today I will talk about this question, which is divided into two situations. Let's take my habitual operation of 50 times leverage, Bitcoin contract as an example. (If the leverage multiple is different, you can convert it according to the margin call space)
1. If the opening volume is greater than 1/4 and the total reversal space is less than $550, stop loss and don’t think about anything else.
That is to say, if you have 100u, and you suddenly feel that a certain market trend is "very certain", then you increase your position, use 25u to open a position, and add all the margin, but there is only about 560 US dollars of reverse space, and your position will be liquidated. (Reverse space is the reverse market fluctuation space you can withstand)
In this case, what should we do if we find a reverse finger?
If you open long and short positions for hedging, then even if you open a position at a ratio of 1:1, you will only use 1/2 of the position, and the opposing side is only about $400 away from liquidation. A slightly bigger market trend can easily cause a liquidation on one side. You can either choose to let one side liquidate, or just focus on the profitable side, and try to minimize the loss.
If there is no long or short position to hedge the risk, then a stop-loss strategy must be combined. For example, if your target is $200, you must stop loss decisively to at least keep half of your principal and stop struggling in vain.
I don’t usually advocate using stop-loss strategies. If stop-loss becomes a habit, then when you encounter a problem, you don’t think about getting out of the market without loss through calculations. Instead, you stop loss and change direction every time because “you don’t lose much anyway.” Then, because the price of the currency fluctuates up and down, changing direction several times and losing a little each time will add up to a considerable loss.
A thousand-mile dam collapses because of an ant hole. Preserving the principal is the top priority. The key is to reduce the loss rate as much as possible, but the premise is that the position is small enough (I have written about it before, so I will not repeat it here)
That is to say, there are prerequisites for carrying orders. There is no strategy that can make people solve the problem once and for all. If you have a heavy position, don't carry the order. It's better to stop loss. It's better to give me coins than to give money and heads to the dog dealer. If you have a small position and encounter an extreme market, you will choose to carry the order if you can barely survive it.
2. In-depth position management
The solution to the problem of being stuck just now is that I have more "margin", including all non-contract accounts that I can mobilize and use, and even increase the fiat currency deposit.
Don't reject the idea of depositing fiat currency to carry orders. Think about it, you lose a few hundred U in a short time, is it easy for you to make a few thousand dollars? Moreover, will you really never play again after the account is liquidated? If you deposit again at that time, isn't it still a deposit? If you continue like this, how many times can you deposit? It is better to deposit first and keep the current principal.
Of course, when the crisis is over, we must return to where we came from.
I won’t talk about what I have talked about before, and get to the point. When trading cryptocurrencies, how can you avoid losing everything overnight and never have the embarrassment of a chip turnaround again?
1. The contract account is divided into positions according to proportion
There is nothing much to say. I have said it many times before. The maximum position for opening an order should not exceed 1/7, and ensure that there is more than 1,000 points of counter-index space.
2. Multiple accounts, or even multiple exchanges
Please note that when I say split into multiple accounts, I don’t mean that you should open multiple contract accounts. They are all contract accounts, and the risks are equally high. I mean that they should be split into leverage accounts and spot accounts, and even part of the profits can be converted into fiat currency. Why do I suggest this?
① Leveraged account to follow the trend
As we all know, leveraged accounts have low leverage and much lower risks.
Because the leverage is small, the fluctuation range it can withstand is very large. There is no need to operate frequently. You can focus on one direction, hold it for a long time, and then close the position after reaching a certain increase or decrease.
This method can prevent you from missing out on the big trend due to frequent short-term operations. How do you say that?
Is it often the case that people who make contracts clearly think that the long position is right, but due to various reasons at the time of opening the order, they open a short position, or exit the long position, and finally get stuck/have a short position, missing out on the market and feeling very disappointed?
For example, when the highest price of Bitcoin reached 10,500 a few days ago, I decisively borrowed Bitcoin from the leveraged account of Whale Exchange and sold it short.
The leverage account of Whale Exchange has a leverage of about 4 times. I didn’t calculate it carefully. Due to various reasons (I closed the previous contract order and prepared to open a short position, and then went to eat. I was going to open the position after eating, and after eating, the price was already 9,300), my contract account missed the sharp drop in the Huamen market.
However, my leveraged account earned 30% of the principal of the account, and this was before closing the position at the lowest point. If I had closed the position at the lowest point, I could have earned about 40%. If the leveraged account accounted for even 20% of the total funds, then I would have earned 6% of the total funds, which is not less at all.
② Spot accounts ambush altcoins
In fact, everyone knows that some altcoins can rise very frighteningly, 20%, 30%, 50% is common. For example, DGB has increased tenfold from January to now.
In addition to DGB, there are many altcoins, many of which have seen significant growth recently, such as SNT, Oracle, and Xiaoling.
However, when ambushing altcoins, the key points to pay attention to are: value analysis of the project itself, whether there is a dog market, whether the market is highly controlled, and whether the volume has been amplified. I may write about these four aspects later, so I will not discuss them here for now.
③In what proportion should funds be allocated to different accounts?
If the total capital is within 100u, don’t consider splitting the account for the time being. Strictly implement the small position strategy, add long and short opening and sparrow tactics, enter and exit quickly, and accumulate a certain amount of principal before doing so. When the amount of funds is very small, you can still be a little "aggressive" and focus your strength; or concentrate on altcoins, which is also a way, and it is not necessary to have contracts.
If the total amount of funds is less than 1000u, it is recommended to allocate 20% to altcoins, 30% to leverage accounts, and the remaining 50% to contract accounts.
If the total amount of funds is less than 10,000 U, it is recommended to use 15% altcoins, 30% leveraged accounts, 20% contract accounts, and 35% to stockpile mainstream spot currencies at low levels.
The total amount of funds is more than 10,000 U, and the proportion of spot accounts should be gradually increased. The altcoin account should be capped, not just according to the proportion. In addition, invest in multiple currencies and do not be obsessed with any currency. Because the amount of funds invested in a single target is too large, the risk is too great, for example, it is easy to get stuck if it returns to zero.
If your funds exceed 200,000, I suggest you transfer half of them to the stock market. The larger the principal, the greater the proportion of the stock market. Aren't Moutai, Tencent, Tesla, Xiaomi and the like attractive? Long-term holding, value investment, for example, Moutai rose from 960 to 1420 in just three months.
The stock market has a threshold. If you don't have more than 500,000 French currency in your capital, be careful. The risk of the stock market is inversely proportional to the size of your capital. Why do you say that? This series will also talk about it in the future. The so-called investment logic is of course the entire investment system, not limited to contracts, and even less limited to the cryptocurrency circle.
I will write about the specific ways of dividing and playing later. This series is about all the experiences, thoughts, reviews and summaries, as well as self-admonitions on investment.
As for a larger amount of funds, such as tens of millions, uh, I haven't had that much money yet, so don't test my imagination and don't talk nonsense based on my imagination. After all, as an author, I have to adhere to two principles. One is that I am responsible for my own writing, and the other is to know when to stop.
④Benefits of different accounts
First of all, this is the theme of this article. If you distribute your funds among multiple accounts and manage your positions in the contract account, then when you are faced with extreme market conditions and your contract account margin is insufficient, you can mobilize funds from your spot account and leverage account to handle the current order.
For example, in the Huamen market a few days ago, you opened a position at 9,500, and your liquidation point was just over 10,300. The rise was so fierce, and Binance still had a very high premium. So, if you have more than 40% of the funds in other accounts, you can mobilize them at this time. With so much margin, you can pull it above 10,900 at once. At this time, you can hold on and then pay it back.
Secondly, if the price rises sharply and quickly, you may encounter congestion and various problems when you want to deposit fiat currency, which may result in your account being liquidated.
Third, if an accident occurs, such as a black swan, stolen coins, or the exchange running away, there are still other accounts, so you will not be left with no chance to start over.
Fourth, diversify risks and stabilize returns. There is nothing much to say about diversifying risks, and stabilizing returns means that if there is no light in the east, there will be light in the west. If there is no light anywhere, it can only mean that there is a problem in the entire field.
⑤ Situations where carrying orders is not applicable and matters needing attention
Since there are always people who like to take things out of context, I still need to point out the situations where they are not applicable.
The first thing to be affected is heavy positions. If you use half of your contract account to open a position and still can't withstand the decline of three to five hundred dollars, it means that there is a problem with your position management itself. Stop loss is the beginning of your escape from bad luck and getting on the right path.
In this situation, don't take on the responsibility, so as to avoid burning down the entire camp and annihilating the entire army.
Secondly, if you are not sure about the market, that is, you have no idea how much the market will continue to reverse. Then, stop loss! Don't hold on!
Third, even if you hold the order, you still need to pay attention to the market conditions. If the situation deteriorates seriously, stop loss in time.
Although I do not recommend frequent stop loss in daily life, and try to correct mistakes as much as possible, the core of small positions is to increase the error tolerance rate. However, stop loss is one of the first few points of my strategy. It is not unnecessary, but it is used in some special circumstances.
The underlying logic of the market sense superman is that if the margin is sufficient, you will only get liquidated when the fluctuation is tens of thousands of dollars. Why does he need to stop loss? He can outperform all fluctuations, so of course he will choose to carry the order.
In short, the core of investment is "survival of the fittest" - it is a competition about who can survive longer.
The views in this article are for reference only and do not constitute investment advice. The cryptocurrency market is volatile, so investment needs to be rational. #币安合约锦标赛
