Cryptocurrency contract trading: Why do you always lose money in 9 out of 10 bets?
In contract trading, where do the lost funds eventually go?
The answer is simple: it goes to your counterparty.
When you open a long position when the market is down, and the market trend is contrary to your prediction, your funds will be won by the counterparty who opens a short position, which will eventually lead to your liquidation.
Then, the question is again: In theory, apart from the influence of the big market, the odds should be 50-50, so why is the actual situation that 9 out of 10 bets lose money?
The reasons behind this are complex and varied.
First of all, contract trading is not only affected by the market, but also by multiple factors such as technology and information.
For ordinary investors, it is difficult to fully grasp this information and technology, which puts them at a disadvantage in trading.
More importantly, the contract trading market is full of professional institutional users. These institutional users have rich experience and resources. They may even cooperate with exchanges to manipulate the market through means such as directional pins and long and short double explosions, further exacerbating the risk of loss for ordinary investors.
Even knowing these risks, many investors still can't help but participate in contract trading.
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There are only two psychological motivations behind this:
One is that you have made money in contract trading before, so you are too confident in your judgment and ability;
The second is that you always want to stop after getting your money back, but you fall into a vicious cycle of losing more and more without knowing it.
In short, the fact that nine out of ten bets on contract trading in the currency circle lose money is not a coincidence, but the result of the combined effect of multiple factors.
For investors, it is crucial to understand these reasons and make prudent decisions. After all, in the world of investment, keeping the principal is always the first priority.
Why do you play contracts? Let's talk in the comment area
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