How can a novice avoid losing money when trading contracts?
It is basically impossible to avoid losing money. You can only make a small loss and a big profit. The following is my personal summary of methods to avoid large losses in trading. I hope it will be helpful to novice friends.
The first one is against the trend.
Against the trend is the most common problem for novice traders. The root cause is that they don’t have a good grasp of the points and stop losses, and their mentality is also very different. What is done against the trend is to pick the bottom and touch the top. It is a method with a low winning rate and a high profit and loss ratio. Because of the low winning rate, you must not hold the order and stop the loss in time. Once you have copied it, many people can’t hold it and get off the bus after a shock. As a result, it leads to a low winning rate and a low profit and loss ratio. The mentality and technology are too different, which violates the original intention of the strategy of picking the bottom and touching the top.
Second, follow the trend and place heavy positions, but the positions are unclear
In my opinion, there are only two positions for heavy positions, three buys and three sells, which are the definite positions of the trend reversal turning points, and any technical positions in the trend are useless and only suitable for light positions, because the callback and rebound in the trend are relatively large. If the heavy position stops loss, the market will most likely return to the opening position. Therefore, after the trend has been going for a while, you can follow the trend and place orders. 1/3 of the usual position is enough. If you can get a little, you can get a little. If you can't get it, forget it.
Third, handling fees
Handling fees are the most easily overlooked source of losses, and they are usually not easy to be found in the dark. For example, in contract trading, take orders for 50,000 and support orders for 20,000. Contract trading usually involves more take orders. Even if one opening and one closing is counted as one support and one taking, the handling fee for one order from opening to closing is 70,000. If 1000u is opened 10 times, the position value is 10,000u, and the handling fee for one opening and closing is 7u. If 1000u opens an order and loses 7u, it is only enough to open 142 times, and the handling fee will lose it all. This is still a conservative estimate. If all orders are taken, 1000u full position is only enough to open 100 orders with 10 times leverage each time, and only enough to open 50 times with 20 times leverage. In other words, no matter how much money you have, a full position of 10 times is only enough to open 100 times before the principal is lost, and 20 times leverage only requires 50 orders.
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