1. First, it is important to clarify that leverage is not the only standard for measuring your risk in trading.
The leverage settings of the platform are only to ensure that the platform does not collapse and have little relation to the risk you can bear.
What really matters is that you should calculate risk based on stop-loss, or in other words, your risk exposure should be managed based on sufficient principal. Especially in highly volatile markets like cryptocurrency, opening positions in increments is very necessary.
For each position opened, you can control it to about 10% to 20% of your principal, so even if the market fluctuates violently, you can stay calm and not get liquidated by a single fluctuation.
The total position risk should also be controlled to between 2 to 4 times your principal, to avoid having all your funds taken away by a single trade. You should also constantly set stop-loss orders; the stop-loss should not exceed 20% of your principal, and it is best to be at a psychologically bearable level.
If you can achieve this, your risk exposure will be greatly reduced.
Of course, sometimes you can also stay in cash to reduce unnecessary risks.
2. The core of contract trading is not to earn more money through high leverage, but to gain profit through risk management. The money you earn actually comes from the losses or liquidations of others.
And 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 'quick profits.'
You may not believe in technical analysis or the market trends, but one thing must be clear:
how you manage risk, how you calculate risk, and how to find suitable entry and exit points.
3. Many people engaged in contracts may have this feeling: 'It felt like picking up money during that period.'
But you must understand that the money you earn is not 'dug out' from the market, but given to you after others are liquidated. Thus, the ones who can truly earn this money are not those who frequently increase their positions, but those who understand how to patiently wait and effectively manage risk. Contract trading can sometimes be quite counterintuitive; the more urgently you try to increase your position, the more likely the market will lead you to liquidation.
Therefore, successful traders are often those who can stay in cash and wait for opportunities. They do not panic due to severe market fluctuations, but calmly control risk and strike when the time is right.
3. In general, contract trading is not as simple as you see; it is a professional skill. If you want to survive in this market 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 maintain calm and strictly execute risk management. If you really decide to engage in contract trading, you must understand one thing: managing risk is the real key to making money!
If you can achieve this, then even in a bull market, you need not fear; instead, you can thrive better 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!