Everyone knows that the market will react to hot news. But the most important thing is to have a reliable source of information. Be sure to read official announcements and news, and don't believe in so-called "rumors". These news are usually unfounded and unreliable, so don't expect to make money with this kind of information.
There are different ways to trade, and you have to find the method that suits you in the end. For example, if you like to go all-in, then don't do short-term trading, avoid frequent operations, and focus on your own strategy.
Basic reminder about contracts
Once again, you should be cautious when playing with contracts. If you are not suitable for contracts, face the reality as soon as possible. Some people advise you not to touch contracts, while others say that contracts are the fastest way to accumulate capital. People who play spot often say that those who play with contracts are "gamblers", while those who play with contracts think that those who do spot are "harvesting leeks". Simply put, a contract is a tool similar to futures, but there is no delivery date, and you can go long or short. If you think the price will rise, go long, and you will make money if the price rises, otherwise go short.
There are two main reasons why many people like to play contracts:
1. Magnify the return: Spot needs to be held for a long time to wait for the bull market. Suppose you wait until the price of the currency rises several times, but 10,000 yuan is only tens of thousands of yuan after multiplying several times. Most people enter the currency circle not for the multiple returns, especially small capital players. What's more, the bull market may not come as expected, and even the currency you buy may not rise.
2. Long and short: The contract can be long or short, which gives people a fairer feeling. Because the spot can only be long, the dealer holds a large number of chips, which always makes people worry about being cut.
Several key points of the contract
1. Leverage: The most direct reason why many people get liquidated when playing contracts is leverage. The greater the leverage, the greater the returns and risks. Now the leverage can be set to 1-125 times. 100 times leverage means that the funds can be doubled if the price fluctuates by 1 point. Many people cannot control themselves and increase leverage after losing money at a low multiple, which eventually leads to liquidation. This is almost an inevitable result.
2. Funding rate: Perpetual contracts and spot contracts are anchored to each other. In order to keep the prices of the two close, the exchange will adjust the funding rate. If the rate is positive, the long position will pay the short position, and vice versa. The settlement is made every 8 hours.
3. Handling Fees: Handling fees are charged in both directions, for both buying and selling. For example, the handling fee for a certain platform is 0.05% for takers and 0.02% for makers. The transaction amount is calculated by multiplying the principal by the leverage multiple.
4. Liquidation: If the price reaches the forced liquidation line, the platform will force the liquidation and charge a high fee. Therefore, it is recommended to set a stop loss position to leave some space to avoid instant liquidation.
Entry time
Many people open orders 24 hours a day, which is basically giving away money. The purpose of the contract should be to develop a stable profit strategy under controllable risks, rather than to gamble and get rich overnight.
It is not recommended to open orders during periods of large market fluctuations, as it is easy to be "spiked" if the fluctuations are too large.
I usually choose to enter the market after the second wave of bottoming out or rising after a large fluctuation, because at this time the fluctuation tends to stabilize and the risk is reduced.
Never open an order if the target and price you set are not reached, and maintain strict self-discipline. Contracts magnify leverage and also magnify risks, so you must enter the market in the lowest risk range.
Those who have poor self-control, are competitive, have a strong gambling tendency, are easily impulsive, or have great financial pressure should never touch contracts, otherwise the market will give you the most painful lesson.
