1. First, it is important to understand that leverage is not the only measure of risk in trading.
The leverage settings of the platform are only to ensure that the platform does not collapse and are not closely related to the risk you can bear.
What truly matters is that you should calculate risk based on stop-losses, or your risk exposure should be managed based on sufficient principal. Especially in highly volatile markets like cryptocurrencies, opening positions in stages is very necessary.
Each time you open a position, you can control it to about 10% to 20% of your principal, so even if the market fluctuates sharply, you can remain calm and not be liquidated by a single fluctuation.
The total position risk should also be controlled between 2 to 4 times your principal to avoid losing all your funds in one trade. You should also always set a stop-loss, which should not exceed 20% of your principal and should ideally be psychologically bearable.
If you can do this, your risk exposure will be greatly reduced.
Of course, sometimes you can also stay in cash to reduce some unnecessary risks.
2. The core of contract trading is not to earn more money through high leverage but to gain profits through risk management. The money you earn is actually given to you by others after they incur losses or are liquidated.
To earn this money, the most important thing is to avoid liquidation. If you can avoid liquidation, you can survive market fluctuations and wait for opportunities to arise. Therefore, when engaging in contract trading, the most important thing is to manage risk, not to pursue 'huge profits.'
You may not believe in technical analysis or market trends, but one thing must be clear:
How you manage risk, how you calculate risk, and how you find suitable entry and exit points.
3. Many people engaging in contracts may feel this way: 'That time felt like picking up money.'
But it's important to know that the money you earn is not 'dug out' from the market, but rather given to you by others after they are liquidated. Therefore, those who truly make money are not the ones who frequently increase their positions but those who understand the value of patiently waiting and effectively managing risk. Contract trading can sometimes be counterintuitive; the more eagerly you increase your position, the more likely you are to be liquidated by the market.
Successful traders are often those who can stay in cash and wait for opportunities. They do not panic due to sharp market fluctuations but calmly manage risk and wait for the right moment to act.
3. Overall, contract trading is not as simple as you see; it is a professional skill. If you want to survive in this market for the long term, the most important thing is to learn how to manage risk.
Successful contract traders are not those who seek quick profits but those who can remain calm and strictly execute risk management. If you truly decide to engage in contract trading, you must understand one thing: managing risk is the real key to making money!
If you can do this, then even in a bull market, you have nothing to fear; instead, you can thrive amidst market fluctuations and earn more. So remember, whether in a bull market or a bear market, the most important thing is: survive to pick up the money!