One,

I just saw a statistic: in the contract market, there have been 20 billion in liquidations in the last month.

Do you say there is no capital in the cryptocurrency market? Who believes that? Hundreds of billions in liquidations are just in contract funds. The financial markets related to cryptocurrencies are not lacking in capital; what they lack is synergy, especially the upward synergy that cryptocurrency investors yearn for.

Why are there liquidations? Small funds are fighting, and large funds are also fighting. Some say that large funds pursue stability, only small funds want to quickly accumulate wealth, which is why they take on high leverage and high positions.

It’s clearly a joke; seeking wealth does not distinguish between the size of capital. Let's make an assumption: if 1 million cryptocurrency investors enter the contract market, 20 billion means each investor has 20,000 in liquidation capital. This is the calculation assuming all cryptocurrency investors participate in contracts and all contracts are liquidated. Recently, over 90% of liquidations have been on the long side; who is shorting?

From this, it can be inferred that not all liquidations are from inexperienced investors.

Hundreds of billions in liquidations at least indicate one problem: operators with 5x, 20x, or 100x leverage are always ready to be liquidated, regardless of the size of their capital.

Two,

The cryptocurrency market has dropped wave after wave; why are people still hesitant to buy?

I carefully read many comments, and some veterans have a very clear understanding, but many others say things like:

①, out of bullets.

②, what if it drops further?

③, afraid of losing yet wanting to win, they have to chase the highs and sell the lows.

④, while waiting, opportunities slipped away quietly.

⑤, lack of courage and determination.

Not daring to grab cheaper chips likely stems from these five mentalities.

In fact, these mentalities are perfectly normal and have always been my mentality. I suspect this is also the reason why people in the cryptocurrency circle refer to themselves as '韮菜' (referring to inexperienced investors).

The first four reasons mentioned above are all cognitive factors related to contract investment. The fifth reason is the feeling of difficulty arising from a lack of understanding. With enough understanding, courage and determination will naturally follow.

Yesterday, I talked about two reasons for not daring to buy after the cryptocurrency market's significant drop: human fear instinct and understanding of contract speculation. In other words, besides psychological reasons, the most important thing is that they have not established their own contract operating system.

Therefore, the key to achieving the investment realm of 'being greedy when others are fearful' is to establish your own practical contract system.

Three,

The famous investment philosopher Van Tharp once said: 'What you are trading is not the market, but ideas about the market.'

This concept is your investment operating system. However, how difficult is it to establish a set of practical contract systems?

Before establishing an investment system, you need to have your own investment philosophy and a clearer understanding of yourself, such as interests, goals, knowledge, experience, skills, and ability boundaries.

Also, you need your own investment strategy: when to buy, when to sell, what to buy, how to buy, how to arrange funds, how to allocate investments, etc.

Finally, you also need a correction strategy. What if you make a mistake? This is not about jumping off a building or cutting your wrists.

Seeing this large pile of problems, I guarantee you feel overwhelmed. OMG, investing is so hard to learn, with so many rules and theories. Even if you learn them, you might not necessarily make money!

Excellent investment masters say that to build your own investment operating system, you must go through at least two bull and bear cycles: the first bull-bear cycle establishes the operating system, and the second bull-bear cycle verifies and corrects your operating system.

A bull-bear cycle in the stock market lasts 6-10 years, while in the cryptocurrency market, the currently recognized bull-bear cycle is 4 years. Can you imagine that it might take at least 8 years to establish your own operating system? At this rate, you might starve to death long before that.

Indeed, this still allows for the conscious establishment of one's own investment operating system. Some retail investors go their whole lives without setting up an investment operating system.

Four,

In fact, I have established many investment operating systems.

Cryptocurrency valuation systems, buying systems, selling systems, systems for choosing cryptocurrencies, holding time systems, etc. The only difference is that previously it was about operating in the stock and forex markets, now it's about operating in the cryptocurrency market.

Due to human nature, establishing a complete investment system is genuinely not easy, and it does not guarantee that it will work.

Coincidentally, over the past six months, I have successfully experienced four contract liquidations in the cryptocurrency market. This is simply a miracle in my life.

Every time after liquidation, they look for various reasons and excuses, even mimicking the complaints of many inexperienced investors: who caused the repeated needle-sticking waterfall?

One day, I had a moment of enlightenment and decided to let the operating system go to hell; it’s too complicated. I just need one trick to ensure that from now on, I can see the mountains clearly and make money effortlessly, while never facing liquidation.

This is the only secret to my contract trading; it can be summed up in one sentence: stringent position management.

Five,

Contract liquidation comes down to two points: high leverage and full position.

Benchmarking and position are the two aspects of position management: if you want high leverage, your position must be extremely low; conversely, if your leverage is low, your position can be higher.

However, there is no need to blame the market for going to extremes, nor to complain about the fierce fluctuations. The outside world has nothing to do with us; we only need to take good care of our own capital and make absolutely safe arrangements.

The market will always experience extreme fluctuations at some point in time. The safest strategy is to keep yourself in a safe box. You can occasionally open the safe to breathe some fresh air, but do not expose yourself to the firepower of the bears or bulls.

Therefore, extremely stringent position management is at the core of contract trading.

For example, if EOS is currently at 3U and you keep your contract liquidation price at 1.5U, you will naturally avoid liquidation.

Isn't there a saying, 'As long as the green mountains are there, you don't have to worry about firewood'? If you don't liquidate your position, it's just that you're strong.

In the cryptocurrency circle, there is a veteran who has long maintained a half-position philosophy, even in spot trading. So, this veteran is a true master; his operations represent the highest realm of investment.

Even Warren Buffett, who holds a dominant position in the global investment world, retains 128 billion USD in cash. Why shouldn't we, who trade futures, practice strict position management?

Therefore, after dying four times on the battlefield of contracts, I finally understood that the only secret to playing contracts is position management.

I need fans, you need references. Guessing is not as good as paying attention.

Continuously pay attention to BTC ETH BNB

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