The following are the seven fundamental elements distilled from the core risks and operational guidelines of contract leverage trading. Take what you need, just like when you take a driving test; without theoretical questions, how can you know the questions and answers without reason?
1. Platform Selection: Safety First
- ✓ Must Do: Choose a licensed and compliant exchange with fund isolation and stable systems (e.g., Binance).
- ✘ Must Not Do: Seek high leverage or low fees while ignoring the platform's qualifications and security vulnerabilities.
2. Knowledge Reserve: Reject Blindness
- ✓ Must Do: Systematically learn about contract mechanisms, candlestick analysis, and liquidation rules.
- ✘ Must Not Do: Place orders based on intuition or following the crowd, ignoring professional terms and market dynamics.
3. Strategy Formulation: Strictly Adhere to Discipline
- ✓ Must Do: Strictly execute quick entry and exit, combining news-driven actions for short-term entries.
- ✘ Must Not Do: Hold positions against the trend, fully betting on a single asset, and refuse to adjust strategies.
4. Position Management: Core of Risk Control
- ✓ Must Do: Strictly control leverage (suggested ≤ 100x), reserve 50% margin as a buffer.
- ✘ Must Not Do: Fully leverage low positions (e.g., 25x) for returns while ignoring the maintenance margin red line.
5. Risk Tools: Active Defense
- ✓ Must Do: Use market orders and planned orders, monitor risk limit rules.
- ✘ Must Not Do: Open positions without protection, ignoring volatility and black swan event plans.
6. Capital Efficiency: Rational Allocation
- ✓ Must Do: Use only idle funds (≤ 60% of total assets), dynamically adjust leverage to adapt to market conditions.
- ✘ Must Not Do: Borrowing to make up positions or investing living expenses, falling into a debt trap.
7. Mindset Control: Counteracting Human Nature
- ✓ Must Do: Exit profits in a timely manner, calmly review losses, trade ≤ 3 times daily.
- ✘ Must Not Do: Revenge trading after losses, being greedy during profitable times.
Summary Warning:
> Leverage is a wealth amplifier and also a mirror reflecting human nature. Those who strictly adhere to discipline survive, while the greedy and lucky perish.
> Remember: A liquidation can happen with just one mistake; being alive allows for the possibility of compound interest.
