It's the weekend, and there's not much market activity. Take a break and recharge. Today, let's talk about how to manage contract trading to both maintain a risk baseline and make trading more systematic!
1. Stop trading after hitting a stop loss; avoid impulsive orders.
Contracts inherently involve small bets for large returns, and losses are common. If you frequently hit stop losses, be sure to pause trading, calmly review your strategy, and avoid blindly placing orders out of frustration to prevent losses from worsening.
2. Abandon the 'get-rich-quick' mentality; reject short-sighted gains.
Trading is never a shortcut. Stay calm during losses. Avoid rushing to place orders to recover losses, and don’t go all-in with heavy positions; steadiness is the key to long-term success.
3. Go with the trend; don’t fight against it.
Identify the major trend and resolutely avoid trading against it in a one-sided market. Once a trend forms, resisting it will only lead to significant losses. It’s wiser to patiently wait for the right opportunity than stubbornly holding against the trend.
4. Calculate the risk-reward ratio, at least 2:1 before entering.
Always calculate the risk-reward ratio before placing an order to ensure potential profits can cover losses (at least 2:1); otherwise, it's difficult to achieve positive returns in the long run.
5. Restrain frequent trading; beginners shouldn’t be greedy for ‘every opportunity.’
Non-expert traders must strictly control the impulse to place orders, especially beginners who should avoid trying to catch every fluctuation—most so-called 'opportunities' are actually traps for losses.
6. Only earn money within your understanding; avoid fluctuations beyond your capability.
Never force trades based on market movements that exceed your analytical ability. Maintain your cognitive boundaries to avoid losses from blindly following trends.
7. Absolutely do not hold onto losing positions; stop loss is the last line of defense.
Stop loss is the bottom line in trading, and beginners must strictly enforce it. Holding onto losing trades is the beginning of a downward spiral into losses; always remain vigilant.
8. Stay grounded during profits; pride often precedes losses.
After making profits, it’s even more crucial to remain rational; becoming overly confident can lead to operational mistakes. Protecting profits is more critical than simply making them.
The above points consistently focus on 'risk control' and 'mentality management.' Uphold these bottom lines to trade more steadily and further in contract trading!
