If you decide to enter contract trading, be sure to keep the following points in mind:
Understand the risks and stay calm: Contract trading is essentially about risking a little for a lot, and losses are the norm. After a loss, many people impulsively open positions, while others choose to take a calm period. My advice is: when losses occur frequently, pause trading and calmly adjust your strategy.
Avoid seeking quick success: Contract trading is not a shortcut to overnight wealth. When facing losses, maintain a calm mindset, do not rush to open positions, and definitely do not over-invest.
Follow the trend: The major trend is key to trading. When the market shows a one-sided trend, operate in the direction of the trend, not against it. Trading against the trend often leads to significant losses, whether you are a novice or an experienced trader, trading against the trend can lead to painful lessons.
Maintain a reasonable risk-reward ratio: The risk-reward ratio is the foundation of trading, ensuring that the risk-reward ratio is at least 2:1 to reasonably open positions and increase trading opportunities.
Avoid frequent trading: Frequent trading is a major taboo in contracts. Especially for novice players, it is easy to act impulsively in the face of the market, missing good opportunities. Remember, most so-called "opportunities" may bring losses.
Only earn within your understanding: Before fully understanding the market and strategies, trade within your understanding without overextending.
Do not hold positions blindly: Holding positions in contract trading is a major taboo, especially for novices. Make sure to set stop losses and execute them in time to avoid holding positions that expand losses, gradually leading to a downfall.
Stay humble during profitable times: Keep calm during profitable times, avoid excessive confidence, maintain rationality, and prevent excessive confidence from leading to losses.
Summary: Contract trading is full of risks; calmness, rationality, and following the trend are key to success.
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