This is an answer that will save you a lot of time browsing forums and researching. If you have not traded Bitcoin contracts yet, I strongly recommend that you read this article first. After reading it, you will find that you have avoided the "big pit" of entering the currency circle. If you have already started to trade Bitcoin contracts and have incurred losses, and are struggling to find a solution, then I still strongly recommend that you read this article word for word. After reading it, you will find that you no longer need to be cut by leeks, no longer need to blindly gamble on the rise or fall, and no longer need to get up at six o'clock every morning to receive the message XXX "You have been forced to close by the system" and feel uncomfortable for several days...
It is better to teach people how to fish than to give them fish. Lao Zhong not only tells you the essence of futures contracts, but also shares with you the experience I have gained from years of hard work and paying the market tuition. Learn my Bitcoin contract and other futures trading system and use it as a tool! You don’t have to suffer losses that you don’t understand, and avoid a pit. In the investment journey of life, the value is not overstated. Not for anything else, just move your fingers and click like. (If you are short of time, the article is relatively long, please save it first and read it slowly and repeatedly!)
Read the catalog first, no nonsense! No nonsense! Straight to the point! Convenient and intuitive!
1. Basic knowledge of contract leverage
1. Leverage brings 100% risk
2. Leverage does not affect the size of risk
3. You can win if you make the right judgment.
4. Once you start trading, you will fall into a process of self-deception
2. The role of contract leverage
1. Risk Hedging
2. Arbitrage tools
3. How can you play with a high probability of making money, or even achieve - either make money or not make money, but not lose money?
1. Used for risk hedging and locking in profits
2. Used as a high-risk arbitrage technique
(1) Position management
(2) Point
(3) Risk control
【Theory】
1. Basic knowledge of contract leverage Contracts, leverage, and options are collectively referred to as futures, which are a type of financial derivative. In order to prevent rice prices from fluctuating too much and resulting in the inability to trade normally, early rice traders set up a type of contract certificate. They used a small amount of funds to buy a certificate that could guarantee a certain price in the future. Later, some people saw the price difference between these certificates and that they came with leverage, so they specialized in buying and selling these certificates. Thus, the futures market was gradually born.
Regarding futures trading, believe me, if you understand the following basics, you will be able to surpass 90% of the investors in the market!
1. Leverage carries 100% risk
Compared with unleveraged spot, although spot also has the risk of returning to zero, if you invest in long-term rising value targets and hold them for a long time, the risk is basically zero.
Once you add leverage, the risk becomes 100%, because you have a liquidation point (the risk of all assets being wiped out), and you have a 100% risk of being penetrated.
This is something that most people fail to clearly understand, so they are likely to make the second cognitive error.
2. The risks of 2x leverage and 100x leverage are the same
Many people make the mistake of thinking that as long as my leverage is low enough and my margin is high enough, my risk is low and I will never get liquidated! This is extremely ignorant!
The global financial assets plummeted on March 12 due to the epidemic this year, which directly refreshed the three views of friends who use leverage! Even if you have 2 times, you may be liquidated.
So, please pay attention!!! The leverage ratio does not determine the risk. No matter how many times the leverage is, there is 100% risk. The leverage ratio determines the distance from your liquidation price.
3. You can win if you make the right judgment.
For example, you bought the right stock and it would go up, and after a period of time it did go up.
But I'm sorry ~ you may have already been liquidated in advance. For example, you bought too much at around 6,200 US dollars, but it fell back to your liquidation price of 5,000 yuan before rising, which means you have already been liquidated, and nothing you say will be of any use.
Sorry, the subsequent rise has nothing to do with you!
3. Once you start trading, you will be trapped in a period of self-deception
After you place an order, the illusion begins to form. You keep expecting it to go in the direction you judged, and then you will keep staring at it because it is so close to your liquidation price...
In fact, not only can your subjective consciousness not control the direction of the market, you will also be easily controlled by price fluctuations, leading to wrong decisions.
Therefore, if you want to participate in Bitcoin contract trading, you must rely on data and strict investment discipline, and through deliberate practice, to help you get out of this psychological bias!
After reading the above content, you have actually surpassed 90% of retail traders in this market!
Next, continue to read the following content patiently, and you will be able to surpass 99% of retail traders in this market! Give yourself a thumbs up. In just a few minutes, you have received an excellent investment coach (claiming to be excellent) in this market, and corrected the cognitive bias you may have fallen into! Using one of them well can help you lose less money.
2. The role of contract leverage
When many people hear about contracts and leverage, they will say that this thing is "gambling", and that it is as fierce as a tiger and should not be touched... But few people know that it is actually a very good risk hedging tool, and secondly, it is an arbitrage tool that only a few people can use well.
It’s just that most people, from the beginning, regard futures trading as a tool for gambling. So when we are not good at it, do not have the intellectual advantage, and cannot get information and suffer losses in "information asymmetry", we will instinctively create some reasons to make ourselves feel better, or create an imaginary enemy. This concept is what we often hear: "dealer" or "dog dealer".
Especially in the blockchain contract market, this is where the competition for existing funds is most intense.
For example, Bitcoin started to rise from 9,300, broke through 12,000 USD, and then instantly dropped 10%-15%, and then instantly rose 10%-15%. If someone happened to be liquidated when buying long positions, and was liquidated when buying short positions, it would definitely leave a big shadow in their heart.
At this time, the heart is in great pain, mixed with regret and self-blame. If you are controlled by this emotion and cannot extricate yourself, you may suffer from depression or even die...
At this time, most people can only look for external reasons: "Dog dealers" manipulate the market and insert needles in exchanges...
We do not deny the existence of these phenomena. After all, blockchain is still in its own special historical stage.
But these should be taken into account in the risk considerations the moment we choose to participate in contract trading. Rather than "hindsight, learning from the pain." Besides, if you happen to make money one day, you won't thank the "dealer", right?
The most important thing is that when you attribute everything to external factors, the improvement of your investment ability stops, and this is the most terrifying thing.
After all, whether it is investment, work or life, after making mistakes, looking for problems in yourself first is the beginning of progress. After understanding this, you need to make a choice. Futures contracts have two functions, one is risk hedging, and the other is a high-risk arbitrage tool. How to use them is suitable for you, just like a knife, which can be used to "cut vegetables" or to "kill enemies" on the battlefield. It depends on your own ability to make a choice. The one that suits you is the best.
Next is the practical part, which will explain in detail how to use "Cut Vegetables" and "Kill Enemies"! You decide which one to choose!
[Practical operation]
3. How can you play with a high probability of making money, or even achieve - either make money or not make money, but not lose money?
First of all, platform selection is very important. To avoid doing evil, you can only choose large platforms as much as possible, and platforms with high costs of doing evil. I personally mainly use the globally ranked digital currency exchange, the top platform Huobi, for futures trading, and the options platform London Stock Exchange as an auxiliary platform for trading. (No conflicts of interest) Next, I will bring the prerequisites and methods of operation into specific situations for discussion.
(1) Risk hedging is also called hedging. It is usually used to hedge against spot investments.
For example, on March 12, 2020, the U.S. stock market was halted and the cryptocurrency market plummeted. At this time, most investors were probably thinking: Should I sell? Wait until the price drops a little more, then buy it back. What if it rebounds after I sell it? If I don’t sell and the price continues to fall, what if the income is affected by the epidemic and I need money urgently? Or if I still have some money, should I add to my position? It has already fallen so much.
In a similar situation, you can use a small amount of funds to buy some call options, because buying call options does not require margin, and you don't have to worry about being liquidated. If the market continues to rise, you won't be completely empty-handed. If the market continues to fall, then you will only lose a little bit of option fees, but the cash you sold before, and then buy the currency after the fall, will not only not become less, but may even become more.
This is the case of hedging with options. Many people think that options are too troublesome or even don’t understand them. It doesn’t matter. The operation is similar using the contracts that everyone is familiar with: Suppose you have 2 bitcoins, and you are really afraid that the price will continue to fall tomorrow, and you don’t know when the bottom will be.
Now if you don’t know how to hedge operational risks, if you sold 2 bitcoins at that time and regretted not getting on board, you can’t buy back any of them now. Of course, this is looking back, the thinking is so clear, but when such a situation comes, it is difficult for you to tell the direction at a certain moment, then you can use this “tool” to hedge risks, just like when the enemy comes to assassinate you, you can pick up this shield to protect yourself.
For example, if you sold a bitcoin for around $5,000, and you did not sell it and opened a 2x long order in the contract market, it means that you still hold 2 bitcoins. Without considering the handling fee, the liquidation price is about $2,500.
At this time, you will find that if the price goes up, you will earn bitcoins; if it goes down, even if it is extreme and your position is liquidated, then you can buy back 2 bitcoins from the market for one bitcoin you sold before, which is around $5,000. This is just an example. There may be many factors that interfere with your specific situation. You need to think and make decisions in person in the specific situation, otherwise it will be nonsense. #币安合约锦标赛
