In fact, contract trading is not for ordinary players. The key lies in the following points:
Strict fund management: Contract trading involves high leverage (0-100 times), and losses in the short term are the norm. The risk of a single transaction should usually be controlled at 2%-3%, and aggressive traders should not exceed 5%-8%. Once it exceeds 8%-10%, the retracement may be as high as 70% when it is unfavorable, and most people's psychological tolerance limit is around 50%. Therefore, strict compliance with fund management is crucial. Avoid blindly using high leverage (such as 5x, 10x), especially when the trading cycle exceeds 4 hours, the stop loss may reach 5%-15%, and the risk of a single transaction is too high. In order to balance risk and leverage, the trading cycle needs to be shortened to 1 hour, 15 minutes or 5 minutes. It should be noted that smaller-level trading is suitable for a small number of professional players.
Mature trading system: The establishment of a trading system requires long-term experience accumulation. The sign of success lies in clearly defining the trading model and conditions, avoiding operations outside the model, and continuously optimizing to adapt to market changes. Leveraged trading (t+0) is frequent and the tuition fee is high. It is recommended to test the waters with a small amount of funds (hundreds to thousands) in the early stage, and withdraw funds after making profits, and maintain a cautious attitude. Avoid increasing investment too early to avoid falling into a meaningless loss cycle.
Strong execution: Market changes (such as the 519 incident last year) test execution, and betting in the wrong direction may lead to significant losses. Strictly stop losses and avoid counter-trend operations. As shown in the recent Luna liquidation case, betting on low-probability events is extremely risky.
Time and experience accumulation: After a bull-bear cycle, you can master the characteristics of different market stages and flexibly adjust your strategy. Small investors need to be cautious because of limited time. It is recommended to try with small funds, control leverage, and focus on large-cycle transactions (1 hour, 4 hours or daily level). Non-professional players should avoid short-term contracts and do not engage in professional trading unless necessary.
Rational investment: Contract trading is more brutal than arbitrage and spot trading. Don't be fooled by the top success stories, which are just bait to attract retail investors. It is recommended to act according to your own conditions and avoid impulsive investment of large sums of money. Remember, light positions, following the trend, and stop loss are the keys to protecting your wallet. Do not blindly invest limited funds in high-risk areas, and rationally choose an investment method that is more suitable for you. $BTC $ETH $BNB
