Before answering this question, let me briefly explain what perpetual contracts are. A perpetual contract, just like its name suggests, is a contract that is renewed indefinitely. In the current digital currency derivatives trading market, perpetual contracts are considered a relatively new type of contract. The meaning of a perpetual contract is that, under the premise of not being liquidated, if you do not actively close your position, you can hold this contract indefinitely. So how much leverage is reasonable to use during operations? Someone asked me this question yesterday, so I’ll discuss it today.
Yesterday, I communicated with a friend in the cryptocurrency space who usually uses 50x or 30x leverage. For Bitcoin, 30x leverage requires 16 USDT, 50x leverage requires 10 USDT, and 100x requires 5 USDT. Under the same market conditions, my personal suggestion is to only use 100x leverage. Why? Because once you open leverage in contracts, whether it’s 1x or 100x, there’s leverage risk involved. Under the same market conditions, the yield generated with 1x leverage and that with 100x leverage is vastly different. Some might say that the risk of 1x leverage is lower, which is true; for Bitcoin, if you use 1x leverage, currently one contract requires over 470 USDT. Without significant price increases, you will definitely incur losses due to transaction fees, and even if there is a profit, it won’t be much. What I want to express is that since you choose to engage in leveraged contracts, you should maximize the use of that leverage and only use 100x leverage.
In many cases, what happens is that with thin funds, one engages in contracts that do not match the current capital, resulting in insufficient margin to support the current market. This can lead to liquidation during volatile market conditions. Once the market improves and profits arise, it has nothing to do with you, and at that point, the contracts you hold become invalid. Therefore, when engaging in perpetual contracts, we should appropriately prepare more margin if conditions allow, as it’s better to be prepared. No matter what investment is made, there are risks involved. What we need to do is minimize those risks and then look at the profits. Holding onto losing positions is a major taboo in contract trading; cutting losses in a timely manner is very necessary.
Timely cutting of losses, combined with a position-by-position approach, minimizes risks. Don’t joke with your own principal. Set a daily goal for yourself, and when you achieve that goal, take profits promptly; contracts will become very simple. Friends who have been in contract trading for a long time know that if you have 5000 USDT as your capital, making a daily profit of 50-100 USDT is quite simple. Adding some techniques makes it even easier. If you earn 50-100 USDT a day, that amounts to 1500-3000 USDT in a month! Of course, in actual operations, there may be significant market fluctuations or various unexpected events. To compromise, let’s assume there are 30 days in a month; as long as you hit your daily goal for 20 days, you are still profitable. After saying so much, I hope this can help my fellow traders.
#波段交易策略 #我的交易风格 #BTC #ETH
