I see many bloggers saying they opened 5x or 10x, claiming that the leverage is already very low.
I really have no words. Actually, I want to tell you all that you are all wrong.
Leverage is not calculated this way. The leverage ratio calculated by the platform has little to do with you; it is more about the share ratio that affects the platform's safety. You should calculate risk based on stop-loss or sufficient principal.
With the extreme volatility of crypto, open positions evenly in batches, using about 10-20% of the principal each time. The total position limit should be around 2 (short) to 4 (long) times the principal. At any one time, the overall stop-loss risk should be high but within 20% of the principal (or within a psychological threshold that must be less than 20%). I suggest averaging the risk at 10%, meaning there will be periods of being flat... Some may ask, then why do contracts at all... Well, saying this may offend the entire crypto circle, but do you really want to earn crypto or make money? Is there a more flexible speculative tool than contracts? Is USDT really useless? In the face of a bear market, what is safer, crypto or USDT? When you spend money, are you spending crypto or USDT?
Dear friends in the crypto circle, contract trading (pure speculation) and investing in cryptocurrencies (similar to venture capital) are two completely different professions.
The essence of contracts is trading risk. Or, it can be said that it is about making money through risk management and expectations.
When doing contracts, you must clarify this statement.
You can choose not to believe in technology, not to believe in market makers, not to believe in K-lines or moving averages, not to believe in BTC, thinking they are all scams. You can also choose to believe in them; these belief issues will not hinder your ability to make money.
But there’s one thing you must understand, and that is [risk]: what is risk, 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 limits... Originally, if you invest in a coin and its value doubles, you earn 100%; then when trading contracts, if you do 3x, the result is a 300% profit. But where does that extra money come from, who earns it, do you know?
For contract trading, what you actually earn is risk management money, which is the money given to you by others' losses and liquidations, and to obtain this money, you must first avoid liquidation....
In fact, viewing the market from the perspective of [risk] is completely different from how ordinary people view it. It's like looking at a mountain from the base versus having a panoramic view from the top; they are fundamentally different. For example, people who buy coins can hold positions and wait for a rise, enduring losses with patience... But in contract trading, if you hold a position waiting and endure losses, you will most likely not survive the first three rounds.
Thus, operations based on [risk] management are completely different from operations based on [dreams]. In the trading market, dreaming costs money, while those managing [risk] strive to seize that money.
So, do you want to be a [dreamer] or a [risk manager]? This depends on yourself. However, [dreamers] should not engage in contracts; doing contracts will shatter your long-term dreams in just a few days, and that awakening is just too quick.
Anyone who has made a lot of money will have a feeling during the earning process: 'that period was almost like picking up money.' Perhaps that's true, but—when your opportunity arises, that is to say: when it's your turn to pick up money, you must be alive and have the capital to pick up money.
Yes, making money from contracts is not difficult... After all, there are so many people blowing up their accounts and handing over money. They are racing at the edge of a cliff; you just need to wait at the bottom of the cliff to pick up some scraps to get by.
The difficulty lies in its inherent contrarian nature; essentially, you have to think opposite to the typical 'get rich overnight' mindset. Whenever you are eager to increase your position or open a new one, you should consider: What does it mean to think against human nature?
If buying coins is like fishing, then doing contracts is like stepping into a boxing ring... This is why I say there is a lot of time spent in a flat position; this is very normal. Waiting, testing, retreating, trying again, and waiting again... This is the norm for a successful speculator.
In fact, strategies developed over a period are almost always simple and clear, and it can be said that everyone knows them.
For example, on February 14, 2022, many teams' operating strategies are: shorting most cryptocurrencies while timing to long BTC as a hedge.
There’s no need to elaborate on the reasons; just think of yourself as a big shot in the crypto circle and derive strategies accordingly. With such a guaranteed profit strategy, 80% of people won't be able to earn money from contract trading.
And such a simple strategy actually includes countless details. For example, the simplest operational principles, why not short directly based on BTC, why shorting is much more conservative than going long, and holds positions for much shorter times, how to handle stop-loss when shorting, how to short various technical coins... The stop-loss plan for contracts requires a theoretical basis that is worth learning. The value of stop-loss theory is at least worth half of what you invest in contracts. If you really can't find it, you need to derive one yourself (that's how I did it; when I found someone, they were unwilling to teach, so I derived a set myself). A complete set of theories means a complete set of operations; strictly executing them will always bring opportunities.
This is how trading works; on the surface, it's as simple as buying and selling (one minute on stage), but countless people have done their homework behind the scenes (ten years of work offstage).... Overall, this is a profession. It doesn't mean that a beginner can't do it, but you must study and train seriously before you can truly step into the arena.
I often compare flying a plane to speculating. The reason is that these two activities are quite similar; if you force yourself to fly a plane without knowing how, the result is likely to be catastrophic. Similarly, if you force yourself to speculate without knowing how, you will inevitably face liquidation.
Risk management and stop-loss management are like the most basic skills of flying a plane; with these, you can at least ensure you won't die.
Follow Dong Ge closely, use precise strategy analysis, and select with huge capital of millions through AI big data, to secure your position? The market never lacks opportunities; the question is whether you can seize them. Only by following experienced and the right people can we earn more!
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