Bitcoin has been around for more than ten years. No matter which year you came into contact with it or learned about the blockchain industry, you should now have some feelings and understandings of your own.
Today, let’s talk about some of our personal feelings after entering the industry.
The industry is still in its early stages, and investment is gradually becoming rational
From July 2017 to now, there has been no significant progress in the industry, and there are very few projects that have been implemented, let alone projects that have generated cash flow or have the ability to generate self-sustaining funds. However, there are constant hot spots in the industry, such as 1C0, Bitcoin fork coins, mainnet launch, trading and mining, gambling DApps, Staking, platform coins, etc., and funds follow the hot spots and speculate in turn.
In the first half of this year, BTC and mainstream platform coins performed well. Trading platforms are one of the few industries that can generate cash flow besides mining. Funds focus on such projects, indicating that the once hot scene has returned to calm and investment has gradually become rational.
Short investment cycle and large fluctuations
"One day in the crypto asset investment world is like one year in the real world." 24-hour trading is as long as a week of stock trading. In the crypto asset investment world, the short cycle and large fluctuations naturally create a heavy speculative atmosphere.
Common contract trading mistakes worth avoiding
Futures contracts are very professional financial derivatives. As a novice, it is easy to make the following mistakes:
1. All-in or heavy positions
It is very dangerous to be like a newborn calf that is not afraid of a tiger and to participate in contract trading with a heavy position, relying on one chance for the success or failure of the transaction and leaving no room for oneself.
2. High leverage
Leverage not only amplifies returns, it also amplifies risks in the same proportion; coupled with the violent fluctuations of crypto assets themselves, the amplification effect is even more significant. High-leverage transactions often lose principal quickly in short-term disorderly fluctuations.
3. Open an order against the trend, or increase the position when losing money
When the market is rising, it is speculated that the market will fall, so opening a short position during the rising stage is a counter-trend opening. Similarly, continuing to increase positions when the market is losing money has already shown that the transaction is wrong, and increasing positions at a loss is a mistake on top of a mistake.
4. The value of each transaction varies
Profits from trading can easily give people the illusion of invincibility, and they can't help but increase the positions of a single transaction, without knowing that this transaction has nothing to do with the previous transaction. Even if the profit and loss ratio of the two transactions is the same, the loss will increase due to the increase in the position, and in the end it will still be a loss.
5. Frequent trading or lack of stop loss plan
Each transaction requires a handling fee. If you open orders too frequently, you may end up wearing out your principal and working for the trading platform. The purpose of a stop-loss plan is to stop mistakes or losses. If you open an order without a stop-loss plan, it is easy to cause a carry order, which will promote a margin call.
The correct approach to contract trading
Contract trading requires a lot of knowledge, and there is a set of strict methodological guidance behind it. On the premise of mastering the concepts of analysis, position, and risk control, it is crucial to find a point with an advantage in profit and loss ratio to open an order and set the stop profit and stop loss positions.
In addition, trading mentality also needs to be tempered, to establish probability and objective understanding, and to summarize and reflect on transactions in a timely manner to correct one's own trading habits.
