To do well in contract investment, there are a few basic concepts you need to know.
1. What is the essence of a contract?
The biggest difference between contracts and spot trading is leverage. For example, on January 3, 2024, sudden news broke that the Bitcoin ETF would not be approved, causing BTC to drop sharply by 10% in an instant, and many altcoins fell by 20% or more. If you bought Bitcoin with 10X leverage at that moment, you would get liquidated, while BTC later rose to 45,000 on January 8, which would have nothing to do with you. If you held the spot, it was clear that the drop was much less than your A-shares for that day. Therefore, with contracts, you essentially make money from short-term volatility. If you hold contracts long-term, you may have to pay very high funding rates. The fundamental reason you participate in contracts is that you want to trade short-term and make a big profit quickly.
2. Basic concepts you need to understand before trading contracts.
Understanding concepts such as isolated margin, cross margin, funding rate, long-short ratio, leverage position limits, which leverage multiple to use for trading, contract open interest, how to calculate fees, etc. If you don't understand, you can check Baidu; the content is relatively basic, so I won't elaborate here.
3. Return to my own trading system.
I mainly focus on intraday trends, primarily trading based on the 15-minute line. Those who are used to stock T0 will generally do this; it's actually not too difficult. Find your suitable leverage on this trend and make high-probability trades multiple times and frequently. Over time, the power of compound interest will come. Sometimes I may have hundreds of trades in a day. Therefore, you must find a platform with rebates for fees; you can look for my referral code, which has a high rebate rate. Remember the wave of ORDI and SOL in December that helped my account grow from 400k to over 700k. ORDI had significant volatility, earning me a total of 7,000, with the total number of trades reaching several hundred per day, and the highest single-day profit was $18,000. My approach is 'small positions, large number of trades, focusing on high volume and high market enthusiasm,' since insufficient volatility and low profits per trade can lead to excessive trading, resulting in too much fee loss. Then, on the evening of January 3rd, there came a wave of big movements, with the news that Bitcoin spot would not pass, leading to a direct 20% drop in all altcoins, with ORDI dropping over 20%. I experienced a single-day loss exceeding 10,000 for the first time, nearly -$12,000. At that time, I also summarized the problems I faced: I did not strictly set my stop-loss. In the following days, I had my first single trade profit over 10,000 (Ethereum), and later I also capitalized on the second wave of Pepe's surge.
4. You must immediately set a stop-loss after placing a contract order.
Prices can spike up and down due to a single piece of news, and there are countless cases of double liquidation. Moreover, trading happens 24 hours a day, and you could be liquidated while you sleep, so you must have the habit of setting stop-losses. Additionally, I usually engage in trend trading. If a trend trade goes wrong, never hold onto the position, because sometimes when consensus emotion is established, cases of a 100% rise or fall in one direction are very common. No matter how much money you have, you cannot withstand that. Just look at the TRB in December, which rose from 120 to over 700 in ten trading days without any pullback. If you shorted it, even with 0.5 leverage, you would have been liquidated long ago. So don't wait until one day you get liquidated to realize the importance of stop-losses.
5. Never gamble.
Never have any sense of luck, because you are trading contracts. If you are right nine times out of ten and make a lot of money, as long as you are wrong once and stubbornly hold onto the position, you will be 100% liquidated. Getting liquidated has a huge impact on your confidence and mindset, so I suggest that whenever a contract loss reaches 30% or more, you should close your position and take a break to consider whether you made a mistake. In the cryptocurrency market, a 20% fluctuation in two days is very normal, and you will encounter it every day. Therefore, if you want to win against the market long-term, you must avoid these factors that could lead to your failure.
6. If you are new to the cryptocurrency space and your total assets exceed 20% in digital currency, please immediately withdraw this ratio to below 10%. Otherwise, this volatility will keep you awake at night and will affect your operations #美国加征关税 #大而美法案 $BTC