Should you set stop-loss orders for contracts?

First of all, many people think that contracts are a great danger, but this part of the people lacks understanding. Existence is reasonable, and there are roughly two types of people who hold this view:

1. Those who have suffered huge losses in contracts, these people may have lost quite a bit of money, or even blown up several positions, which leads them to believe that contracts are a great danger, and playing contracts will eventually lead to zero.

2. The other type is those who follow the crowd, who have never traded contracts themselves, but see online widespread claims that "those who trade contracts are all gamblers, and will eventually go to zero..." Thus, they subconsciously believe that contracts are really scary and should not be touched.

I believe that contracts are neutral, just like a knife; if used well, it can lead to quick wealth, but if used poorly, it can easily backfire. For those who trade contracts, the requirements are much higher than those for spot trading. So, should you set stop-loss orders when trading contracts?

I think there are two situations: the first is for short-term traders, who definitely need to set stop-loss orders. The second is for medium to long-term traders, who may not need to set stop-loss orders. Of course, the premise for both situations is to manage positions well. In plain terms, don't let extreme situations blow up your position.

For short-term traders, the goal is to seek short-term profits. If they don't set stop-loss orders, it can easily lead to losses exceeding what they can bear, causing them to exit the market forever.

For medium to long-term traders, I feel that stop-loss orders are not as necessary, but this depends on whether your position management is good and if the position is safe enough. Whether it goes down or up, you can perform additional buying operations. Of course, there is also a very important factor, which is that the direction must be accurate enough; otherwise, this approach may lead to irreparable damage.

In short, whether to set stop-loss orders or not, there is no absolute right or wrong; it mainly depends on your trading style and market conditions.

Stop-loss: Suitable for short-term, high-leverage trading, or when market uncertainty is high, with the aim of controlling risk and protecting capital.

No stop-loss: Suitable for medium to long-term investments, when trends have not changed or when the position is very light, with the aim of capturing larger opportunities.

No matter how you choose, the most important thing is to execute according to plan and not let emotions sway your decisions. Trading is a marathon, not a gamble; steady and steady will take you further.