How to prevent a margin call during contract trading? After a margin call during contract trading, people feel like they have no desire to live. This phenomenon usually happens to new investors. If they fail to properly control risks, they may get a margin call due to excessive risks. There are many reasons for this. However, many investors are really addicted to margin calls and do not do any risk control at all, resulting in a loss of all their capital.
So, how to prevent liquidation when speculating in contracts?
1. Reasonable control of positions
The essence of making money from trading is to make money with compound interest, not with explosive profits. As for the model of making money with compound interest, everyone has different ideas, and you can summarize it yourself in practice. Here is a mantra for everyone: light positions and small amounts, follow the trend; slow and steady, little by little, a lot.
2. Always set a stop loss
The stop loss position should be combined with the position adjustment and the operation cycle. If you are doing mid-term operation, the stop loss should be slightly larger, generally around 2,000 points. For short-term operation, the average stop loss is around 500 points. The invested funds should be divided into three parts, one for opening a trial order and two for adding to the position. In the specific operation process, a small amount of funds should be used, and short-term maneuvers should be made appropriately, and do not hold all the way. Technical stop loss should be combined with capital stop loss.
3. Frequent entry and exit is prohibited
If you make mistakes three times in a row, you must resolutely stop trading and do something else. For example, you can read some interviews and biographies of trading masters. When the frustration of losing money disappears and your mentality is calm, analyze the charts carefully, find the reasons for the mistakes, try to enter the market with small orders, and if you feel that your luck is still "bad", you must continue to adjust.
4. Go with the trend and avoid going against it
Whenever the market is squeezed or bullish, many people's accounts will be blown up. The reason is that they blindly hold on to long or short positions, fighting against the market, and making more mistakes, hoping that one day the price will turn around and they can turn defeat into victory. In the end, before the day of turning defeat into victory comes, their "bullets" are used up and they die halfway.
There are neither bulls nor bears in the market. Only sly ones can survive for a long time. In this situation, investors need to strengthen their learning, practice hard, and improve their technical analysis level. They need to improve their psychological quality, strengthen their will, and strive to achieve unity of knowledge and action.
5. Do not blindly follow the trend and place orders
You should carefully analyze the investment client's operating methods and thinking patterns, think about why he is bullish or bearish, why he wants to open a position at this price, why he wants to set a stop loss at that position, how it is consistent with your own analysis and judgment, how it differs, etc. Ask more whys. Once you find that the investment client's operating direction is opposite to the market operation, do not blindly believe in it or worship it, but leave the market decisively.
In short, in contract trading, risk and profit are directly proportional. You should have your own ideas when placing orders, do not blindly follow others, be flexible and follow the trend. This will avoid going to the situation of liquidation and control the trading risks.
