1. Short-term cryptocurrency trading
_In contract trading, this is the most common way to play, and for newcomers, it is the first way to enter the cryptocurrency world. This method carries significant risks, often relying on luck to make a profit, and the earnings are often not enough to cover a single loss.
2. Learn to take profits and cut losses
In contract trading, taking profits and cutting losses is very important. The market is highly volatile, and prices can change rapidly. Setting stop-loss orders can help you close positions quickly when the market turns against you, preventing significant losses. A good take-profit strategy can better secure profits and prevent losing them due to market reversals, allowing you to control your profit points better.
3. Discipline in trading.
In contract trading, your own greed, fear, and emotions often play a role, which is the primary factor for losses. Before every entry, set your take-profit and stop-loss levels, maintain your trading rhythm, and reduce the impact of emotions on your decisions. Make a trading plan for yourself, set a number of trades per day, and do not think about entering another trade to recover losses when you experience a loss, as this often leads to even greater losses along the way.
4. Analyze the market
The cryptocurrency market can experience unilateral and volatile trends. During weekends, volatile trends are most common. In such market conditions, it is not suitable to trade long-term; if you have profits, it's better to take them and secure them. Unilateral trends, however, only last for a certain period; these are the best trading conditions—buy low and sell high, which can yield significant profits.
5. Analyze trends
If you can judge the trend accurately, you've already won half the battle. You can analyze daily and weekly candlestick charts to determine whether the market is trending upwards or downwards. If you chase after rising prices and sell at falling prices, you will incur losses and eventually leave the market in despair.
6. Position management and leverage techniques
In contract trading, position management is crucial. For example, if you have $1000 in your account, a margin rate of 5%-10% is ideal, which means $50-$100 per trade, making it less likely to get liquidated. The level of leverage should be determined based on market conditions. Quick in and out, using high leverage can yield fast returns and high capital utilization rates, with a recommended profit-taking ratio of 20%-50%. Market conditions change rapidly, so learn to control your greed and know when to stop. Greedy traders often end up with poor results. In summary, use high leverage for short-term trades and low leverage for long-term trades.