I just summarized several reasons why contracts may result in losses!
1. Entry point: When making a contract, the choice of entry point is very important. Timeliness requires us to choose to enter the market at the right time. Lack of a good entry point will lead to reduced returns or even losses. Therefore, learning to grasp the right time to enter the market is very important to whether you are profitable. For example: Sometimes I tell my friends that I will squat at a certain position until the early morning or something like that. This is indeed true. If there is no good entry position, then you know that it is a unilateral market. , then you will have no profit, or your profit will be lower than others, and even worse, you will lose money as a result.
2. Frequent trading: Newbies tend to open positions frequently in pursuit of fast-paced trading. This overactive trading style leads to impulsive decision-making and high risk exposure. Because of the experience of fast-paced trading, they will run away when they make a profit or a loss. When you feel that a certain token is good, you will open positions frequently. This is also the reason why many friends lose money.
3. Position management: Position management directly affects risk control and profit potential. Don’t be too greedy and invest all your funds in one transaction, but allocate funds reasonably according to your personal risk tolerance. Conservative position management can effectively reduce trading risks and make transactions more stable. This reminds me of a friend I led a few days ago. The first time he did it with me, I didn’t remind him of the position, and he went all in directly and quadrupled his money in one day. (You can check out my previous blog post for this) Although the result is good, the risk is also very high.
The attraction of contracts lies in the high profit potential, but because of this, it also brings a great risk of loss. By following the appropriate entry point, avoiding frequent trading, and reasonable position management strategies, you can improve the success rate of transactions and risk control level, so that your risk of loss will be reduced when doing contracts!