I see many people say they opened 5x or 10x leverage, thinking that it's already very small.
I'm really speechless. In fact, I want to tell you that you're all wrong.
Leverage is not calculated like that at all. The leverage ratio calculated by the platform has nothing to do with you; it’s roughly the proportion of the share that affects the platform's safety. You should calculate risk based on stop-loss + or full principal.
With the volatility of crypto being so large, open positions evenly in multiple batches, with about 10-20% of the principal each time. The total position limit should be about 2 times (short) to 4 times (long) of the principal. At the same time, the overall stop-loss risk should be high at 20% of the principal (or the psychological actual acceptable range must be less than 20%). It is recommended that the average risk time be 10%, meaning that there are periods of time when you are flat... Some might ask, then why do contracts at all...? Hehe... Saying this might offend the entire crypto world: do you really want to earn coins or make money? Is there a more flexible speculative tool than contracts? Is USDT really a waste? At the onset of a bear market, what is safer, coins or USDT? When you spend money, do you spend coins or USDT?
Dear friends in the crypto world, doing contracts (pure speculation) is completely different from investing in cryptocurrencies (similar to venture capital).
The essence of contracts is trading risk. Or rather, using risk management and expectations to make money.
When doing contracts, you must clarify this sentence.
You might not believe in technology, not believe in the market makers, not believe in K-line moving averages, not believe in BTC+, thinking they are all scammers. You can also believe in these things; these conceptual issues won't stop you from making money.
But there is one thing you must understand, and that is [risk], what risk is, how to control risk, how to calculate risk, how to operate risk, how to withdraw from risk... how to survive...
------- You cannot earn money beyond your cognitive range... Originally, if you invest in a cryptocurrency and it doubles in value, you earn 100%; then if you do contracts at 3x, the result is 300% profit. Do you know where that extra money comes from?
- For contract trading, what you earn is actually the money from risk management, which is the money that others lose and are liquidated. To obtain this money, first, you must not get liquidated.
In fact, looking at the market from the perspective of [risk] is completely different from how ordinary people see the market. It's like looking at a mountain from the bottom versus seeing it from the top, which is completely different. For example, people who buy coins can hold positions waiting for a rise, endure losses, and emphasize patience... But for contracts, if you hold a position waiting and endure losses, you most likely won’t survive the first three chapters.
Therefore, operations truly based on [risk] management are completely different from those based on [dreams]. In the trading market, dreaming will cost you money, while those who manage [risk] are the ones trying to take that money.
So, do you want to be a [dreamer] or a [risk manager]? It depends on yourself. However, [dreamers] shouldn't play contracts; doing contracts will shatter the beautiful dreams you’ve built over the years in just a few days. That awakening is just too fast.
Anyone who has made a lot of money will have a feeling during the process: 'That period was almost like picking up money.' But—when your opportunity comes, which means: when it's your turn to pick up money, you must be alive and have the capital to pick it up.
Yes, making money from contracts isn't hard... after all, so many people are liquidating and handing over their money. They are racing on the edge of a cliff; you just need to wait at the bottom of the cliff and pick up some parts to get by.
The difficulty lies in the fact that it is inherently against human nature. Basically, you have to think contrary to ordinary people's thoughts like 'getting rich overnight.' Whenever you are eager to increase your position or open a position, you need to think about what it means to 'go against human nature.'
. If buying cryptocurrencies is fishing, then doing contracts is stepping into the boxing ring... So, I say it's normal to have a lot of time in a flat position. Waiting, testing, retreating, trying again, waiting again... this is the norm for successful speculators.
In fact, strategies over a period of time are almost simple and clear, and it can be said that everyone knows them.
For example, on February 14, 2022, many teams' operating strategies were: shorting most cryptocurrencies while timing to go long on BTC as a hedge.
There’s not much to say about the reason; think of yourself as a big shot in the crypto world and make deductions. With such an absolutely profitable strategy, 80% of people can't make money operating contracts.
Such a simple strategy actually contains countless details. For example, the simplest operational principles, why not short based directly on BTC, why shorting is much more conservative than longing, and why the holding time is much shorter. When shorting, how should stop-loss be handled? How to short various technical currencies... The stop-loss plan for contracts requires a theoretical basis, worthy of study. The value of stop-loss theory is at least worth half of what you've invested in contracts. If you really can't find it, you have to derive one yourself. A whole set of theories means a whole set of operations; strict execution will always yield opportunities.
That's how trading is; on the surface, it's extremely simple—a buy and a sell (one minute on stage), but countless people have done enough work behind the scenes (ten years of effort offstage)... Overall, this is a profession. It's not that novices can't do it, but you must study and train seriously before you can truly step onto the field.
I often compare flying a plane to speculating. The reason is that both are quite similar; if you force yourself to fly without knowing how, the result is disaster. Similarly, if you force yourself to speculate without knowing how, you will inevitably face liquidation.
Risk management and stop-loss management are akin to the most basic skills of flying an airplane. With this, you can at least ensure that you won't die.
The current market in the crypto world is essentially a battle between retail investors and market makers. If you don't have solid professional skills, knowledge, and a network, you can only be cut! If you want to layout together and harvest the market makers, like-minded individuals in the crypto world are welcome to comment: 666 to discuss together.
