Many people ask me: How do you actually trade contracts?
Today, I will share a trading strategy that I usually use, it's very practical, and I recommend saving it!
How to open a position? It's very simple, follow these steps:
First, open a 20% position to test the waters.
What if the direction is wrong?
If it drops by 10%, immediately cut losses; overall, you will only lose 2% of the total position, and there should be no hesitation in stopping losses.
What if the direction is right?
If it rises by 10%, add another 20%;
If it rises again by 10%, continue to add 20%;
If it rises a last time by 10%, fill the remaining 40%!
Then hold on all the way, as long as it doesn't retrace by 10%, just hold on tight.
Once it retraces by 10%, without mercy, liquidate the entire position!
This strategy is very similar to Livermore's approach—quickly admit defeat when wrong, and continuously increase your stake when right, trying to maximize the profitable trades!
Of course, this is just an execution framework, and it cannot be set in stone; adjustments during trading still depend on the rhythm and market conditions.
I have used this method several times, and the overall effect is good, but don’t become overconfident; the market is always changing.
Contracts are not about methods, and if you don’t control risk, you will only keep paying tuition.
With plans and rules, you can survive longer and earn more.
This month, the overall returns are good; when faced with unfavorable market conditions, just cut losses and proceed steadily. Some fans have already cashed out to improve their lives, while leaving some to continue seizing opportunities. Being able to earn and protect what you have is essential to going far. When the market is good, doubling your returns is not a dream.
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