Tips for making money with perpetual contracts (Part 1)
1. Avoid full positions
How should funds be allocated? Fund allocation should be understood from two levels:
First, understand fund allocation from the perspective of risk. First, clarify how much loss our account can or is prepared to bear. This is the basis for our thinking about fund allocation. After this total amount is determined, consider how many times we should lose to the market if we lose consecutively in the market according to this total amount, so that we can willingly admit our bad luck and admit failure.
I personally think that the most risky method should also be divided into three times. In other words, you should give yourself at least three chances. For example, if the total amount of account funds is 200,000, and the client allows you to lose up to 20%, that is, 40,000, then it is recommended that your most risky loss plan is: 10,000 for the first time, 10,000 for the second time, and 20,000 for the third time. I think this loss plan is still reasonable. Because if you do it right once in three times, you can make a profit or continue to survive in the market. Not being kicked out of the market is a success in itself and there is a chance to win.
2. Grasp the general trend of the market
Trends are much more difficult to do than shocks, because the trend is to chase ups and downs, and you need to have the determination to hold positions, and buying high and selling low is in line with human nature.
The more in line with human nature the transaction is, the less money you can make. It is precisely because it is difficult to do that you can make money.
In an upward trend, any violent pullback must be chosen to go long. Remember the probability I said? So, if you are not on the bus, or get off the bus, wait patiently, and if there is a drop of 10~20%, go long boldly.
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