1. Master the basics, understand contract rules
Perpetual contracts are different from traditional contracts; they have no expiration time and can be held indefinitely until you choose to close the position. You need to understand the following key points:
Leverage usage: Perpetual contracts support leveraged trading, allowing you to control larger trading volumes with a small amount of capital. While leverage can amplify profits, it can also magnify losses, so use it with caution. Funding rate: Perpetual contracts maintain the alignment of contract prices with spot prices through a funding rate mechanism. You need to pay attention to the funding rate payment and avoid excessive fees due to frequent position changes. Stop-loss and take-profit: Set appropriate stop-loss and take-profit points to avoid excessive losses on single trades.
2. Follow the trend, avoid counter-trend operations
"Trend is king" is a classic principle in the cryptocurrency circle. The profit space of perpetual contracts mainly comes from market fluctuations, so understanding the current market trend is crucial.
Go with the trend: Go long in an uptrend and short in a downtrend. This is the most basic operating principle. Perpetual contracts have a more flexible trading mechanism, suitable for obtaining profits through trend-following.
Observe technical indicators: Use technical indicators such as MACD, RSI, Bollinger Bands, etc., to help judge market trends. Especially when the RSI is in extreme areas (such as overbought or oversold), it can serve as a reference for reversal signals.
3. Strictly control leverage, avoid liquidation
High leverage can be a powerful tool for quick profits, but it can also easily lead to liquidation. For most ordinary investors, excessively high leverage is not a wise choice.
Maintain reasonable leverage: It is generally recommended to use 2x to 5x leverage, or even lower. While using low leverage may reduce short-term profits, it significantly lowers the risk of liquidation and protects your capital.
Set stop-loss and take-profit: In perpetual contract trading, setting stop-loss and take-profit is key. To avoid excessive losses due to short-term fluctuations, setting stop-loss levels appropriately can effectively control risk. Generally, the stop-loss point is set within a floating range of 2-3%, and the take-profit point is set at 5%-10% of the target profit.
4. Use capital management wisely, build positions in batches
"Perpetual contract trading cannot be done alone." Correct capital management methods can help you diversify risks and balance gains and losses.
Batch building: Do not invest all funds at once. You can gradually enter the market through batch building, avoiding excessive losses due to market volatility. Each batch of funds should not exceed 30% of the total funds, which can effectively reduce the risk of loss.
Capital allocation: Allocate funds reasonably based on market conditions and your predictions. Always keep no more than 30% for contract trading; the remaining funds can be used for long-term holding of spot assets as a risk hedge.
5. Stay calm, avoid emotional trading
The cryptocurrency market is highly volatile, with rapidly changing conditions, and emotions can easily affect investors' judgments. Staying calm and strictly following your trading strategy is key to success.
Don't be greedy, don't panic: In perpetual contract trading, greed can cause you to lose rationality. Don't become overly confident after a small profit, and don't make impulsive decisions due to a loss. Set clear goals, strictly execute them, and do not blindly follow the crowd.
Good risk control: Once there is a market reversal, recognize losses and exit as early as possible to prevent losses from spreading. Do not stubbornly hold positions; constantly monitor market dynamics and adjust positions in a timely manner.
6. Keep learning, understand market dynamics
The market changes rapidly, with new technologies and projects emerging constantly. Understanding market trends and new investment opportunities is essential.
Follow market news: Understanding market news and major events, such as policy changes, technological upgrades, and capital flows, can help you make more accurate judgments. Learn more trading techniques: In addition to basic technical analysis, you can enhance your trading ability through quantitative trading strategies and AI assistance.