The feeling of a margin call is unpleasant! Watching hard-earned money vanish in a few minutes, many contract traders have had this painful experience. Statistics show that over 80% of contract traders eventually lose and exit. However, as long as you keep the following points in mind, you can avoid most pitfalls that beginners often encounter.
In the cryptocurrency market, contract trading is attracting more and more investors. High returns are often accompanied by high risks, and one can easily face the danger of a margin call. Experienced traders know that to survive in the contract market, the following rules must be remembered.
1. Key decisions after hitting a stop loss
When encountering a stop loss, there are usually two types of investors in the market: one who frantically opens positions in retaliation and another who chooses to enter a calm period. It is advisable to adopt the latter strategy - if you frequently hit stop losses, it is best to pause trading and adjust your strategy before re-entering.
2. Maintain a calm mindset
Contract trading is by no means a shortcut to overnight wealth. It is crucial to stay calm when facing losses. Avoid rushing to open positions or heavily investing, as this often leads to greater losses.
3. Act in accordance with the trend
Accurately grasping the major trends is crucial. When the market shows a clear one-sided trend, one must act in accordance with it. Whether a novice or an experienced trader, one must overcome the impulse to trade against the trend, as this is often the biggest source of losses.
4. Value the profit-loss ratio
A reasonable profit-loss ratio is the foundation of profitability. It is recommended to consider opening a position only when the profit-loss ratio reaches at least 2:1; otherwise, it is difficult to achieve long-term stable profits.
5. Avoid overtrading
Frequent trading is a major taboo in the contract market. Especially for beginners, excessively pursuing trading opportunities often leads to losses. It is important to restrain the impulse to open positions blindly.
6. Trade within your cognitive range
This point is extremely important - only engage in trades that you truly understand. Do not be misled by market appearances; act according to your cognitive level.
7. Strictly prohibit stubbornly holding positions
The most dangerous aspect of contract trading is stubbornly holding positions. Especially for beginners, it is essential to strictly implement stop losses and not to have a sense of luck. Remember: holding positions often marks the beginning of greater losses.
8. Beware of underestimating after making profits
Staying clear-headed when making profits is particularly important. Being carried away often leads to misjudgment, ultimately resulting in unnecessary losses.
It is important to emphasize that contract trading is essentially a tool for making big gains with small investments. Only by strictly adhering to these principles can one reduce risk and improve the success rate. For newcomers to the market, these principles must be kept in mind.
The test of a bull market is not just about the rise and fall of prices, but also a test of our mindset. In the face of account fluctuations, we must remain rational. Next, I will announce the next potential tenfold coin! It's better to seize opportunities than to guess! Like + comment, and share for free.
