Reasons Why Most People Lose Money in Contract Leverage
The reasons most people lose money in contracts are:
1. They only look at 15 minutes, 30 minutes, and 1-hour small level trends, ignoring the larger daily, weekly, and monthly trends. They often chase highs and lows in small levels with high-frequency short-term trading, lacking a strict trading plan, incurring large amounts of transaction fees, making small profits, then large losses, and ultimately going against the larger trend, delaying stop-losses until they are liquidated.
2. Lack of trading experience, unfamiliarity with technical indicators, inability to analyze the market, no personal trading system, recklessly entering trades. Beginners with less than three years of trading experience jump into the contract market, usually leading to a dead end.
3. Mistaking luck for skill; after a few consecutive profits, they believe they are trading experts, borrowing money to trade cryptocurrencies, quitting their jobs to trade, and ultimately facing destruction under immense pressure and loss of control over their emotions.
4. Large capital contracts, betting big to gain small, running away with small profits, but holding on stubbornly through losses. When faced with a one-sided market, they will inevitably face liquidation.
Thus, it is essential to trade contracts with small capital, looking for opportunities with high profit-loss ratios to enter the market, either risking small amounts or earning large amounts. High profit-loss ratios and small losses with large gains are the core reasons for making money in contracts; small gains with large losses are the core reasons for losing money.
