A complete and practical trading strategy for futures contracts in the crypto world! If you haven't traded Bitcoin futures yet,
then I strongly recommend you read this article first,
after reading you will find that,
you have avoided falling into the 'big pit' of the crypto world,
after reading you will discover,
you will no longer need to wake up every day at seven or eight in the morning to receive messages like XXX 'You have been force liquidated by the system' and feel bad for several days...
First, look at the table of contents, no nonsense, no talking too much, let's get straight to the point!!
1. Basic knowledge of contract leverage
1. Adding leverage comes with 100% risk
2. The leverage multiplier does not affect the size of the risk
3. Just because you judge correctly, doesn't mean you will win
4. Once you start trading, you will fall into a process of self-deception
1. Basic knowledge of contract leverage
Contracts, leverage, and options are collectively referred to as futures, which are a type of financial derivative. In the early days, rice traders engaged in rice trading created this type of contract to prevent excessive price fluctuations of rice that could hinder normal trading. They established a contract certificate using a small amount of capital to purchase a certificate that guarantees a certain price for future transactions. Later, some people noticed the price differences between these certificates, which inherently carried leverage, and began to trade these certificates, leading to the gradual emergence of the futures market.
1. Adding leverage comes with 100% risk
Compared to unleveraged spot trading, although spot trading also has the risk of going to zero, if you invest in a long-term appreciating asset and hold it for a long time, the risk could be considered zero.
However, once you add leverage, the risk becomes 100%, because you now have a liquidation point (the risk of all assets going to zero), with a 100% risk of being hit.
