Several insights to prevent being harvested in contract trading, believe they can help you who are currently trading contracts!
1. Understand the essence of risk
The volatility in the crypto contract market is beyond imagination, and in extreme market conditions, your principal can instantly drop to zero. Before investing, make sure to clarify your own risk tolerance and never use funds that you cannot afford to lose.
2. Avoid blind entry
Contract trading is not about luck! You must master core knowledge such as candlestick analysis, leverage principles, and position management, and refuse to follow the crowd in chasing highs and lows.
3. Use leverage cautiously
High leverage is a "double-edged sword"; beginners are advised to start with low leverage of 1-5 times, and only cautiously increase it after gaining experience to avoid an imbalance between profit and risk.
4. Strictly adhere to stop-loss limits
Set a stop-loss point in advance and execute it strictly; do not hold onto positions due to wishful thinking. Stop-loss is a lifeline and is more important than predicting market trends.
5. Allocate funds scientifically
Avoid "all in" on a single contract or cryptocurrency; diversify your holdings to reduce risk. At the same time, reduce frequent trading to prevent transaction fees from eroding profits.
6. Maintain rational decision-making
Extreme price fluctuations can lead to emotional loss of control; whether it’s the joy of floating profit or the anxiety of being deeply trapped, both can lead to decision-making errors. Stay calm during trading and use strategy instead of impulse.
7. Build a strong safety line
Stay away from unregulated platforms, "expert" trading traps, and pyramid schemes. Identify compliant exchanges, properly safeguard your private keys, and be cautious of asset theft.
8. Position your investment role
Contract trading is a high-risk gamble, and do not view it as a wealth secret. It is recommended to focus on stable investments, using contracts only as an auxiliary strategy while controlling the proportion of funds.
Remember: In the contract market, surviving is more important than making quick money. Rational restraint is necessary for long-term stability.
