Key Points of Perpetual Contracts Simplified
Perpetual contracts, as a type of contract without a delivery date, can be held long-term as long as there are no liquidations or closures, making them a common tool for many traders. However, many retail investors struggle with how many times leverage is appropriate, and some even choose 30x, 50x, or even 100x leverage, hoping to gain substantial volatility with minimal capital.
In fact, leverage is essentially borrowing money to trade; the different multiples only affect the speed of risk release. The key is not the level of leverage but whether there is a corresponding risk management plan. For example, it is important to clarify the amount of loss one can bear, set stop-loss points, enable a per-position mechanism, and manage position ratios.
In contract trading, holding onto a position is the biggest taboo. During market fluctuations, high-leverage accounts can easily face liquidation due to minor pullbacks, missing out on subsequent trends. It is advisable to adopt conservative operations such as appropriately increasing margin, strictly executing take-profit and stop-loss orders, and setting daily profit targets. For instance, using a principal of 5000U to earn a steady 2% daily (100U), resulting in monthly earnings of 2000-3000U, is far more reliable than the ups and downs of all-in bets.
In summary, leverage should match capital and trading plans, and it is best to use a per-position model to isolate risks. Profits depend on successful strategies and a good mindset. When trading, avoid greed and emotional impulses; do not fantasize about getting rich overnight, and especially avoid consecutive liquidations. Remember, contracts can amplify profits but also magnify losses; rational use can help avoid unnecessary detours.
