Recently, many fans have asked me how to operate after just entering the cryptocurrency space, especially how to maintain stable trading with limited funds. Today, I will share some of my personal suggestions to help everyone start from the basics and gradually improve their contract trading capabilities.
Assuming you currently have 1000U in funds, how do you plan and manage this capital?
1. Allocate funds and control positions reasonably.
First and foremost, reasonable allocation of funds is crucial. I suggest you divide 1000U into 10 portions, investing 100U each time with 20x leverage. Why choose 20x leverage? Because for beginners, too high leverage can lead to a loss of control, while 20x leverage is a relatively reasonable choice that can control risks.
The remaining 900U can be placed in a financial account or cold wallet, ensuring that when faced with uncertain market conditions, you still have some capital to support further operations.
2. Control your mindset and do not average down.
If you have 100U in funds, do not think about averaging down after a loss. In contract trading, losses are inevitable; do not let a momentary error lead to a collapse in mindset. The key is to reflect and summarize experiences, then rest for 1-2 days to adjust your mindset.
Remember, Bitcoin is highly volatile, with multiple significant fluctuations each month. It’s not about missing opportunities; it’s about overtrading. Therefore, maintaining a calm and rational mindset is more important than anything else.
3. Gradually increase positions to avoid blindly chasing prices.
Once you have made a certain profit, such as 300U, you can keep 100U as your capital and withdraw or operate conservatively with the remaining 200U. Never reinvest all profits as excessive averaging down often leads to losses. The market is always full of uncertainties, especially black swan events that can cause you to lose all your previous gains in an instant.
Before each trade, make sure you understand the overall market trend. Never blindly chase prices. If the market has already risen significantly, the risk of entering increases accordingly. It’s best to wait for a pullback or clear market signals.
4. Risk management is crucial.
Controlling risk is an essential skill for every successful trader, especially in contract trading, where leverage magnifies both risk and reward. My suggestion is:
• Stop-loss setting: Always set a stop-loss when entering a position. If losses reach 20-30U, exit decisively.
• Take profit strategy: When profits reach a certain level, set a take profit. If there is a pullback of over 30%, consider taking profit to lock in gains.
• Withdrawal strategy: After making a profit, withdraw regularly, especially after significant gains. Do not reinvest all profits.
5. Learn to slow down and maintain rationality.
The psychological fluctuations in trading are significant, especially when facing losses, as many people tend to make impulsive decisions. I must emphasize: do not trade when you are in a bad mood. If you feel anxious or depressed, it is best to stop, rest for 1-2 days, and adjust your emotions before continuing.
Moreover, it is especially important to note that in contract trading, it is not about frequently entering the market to make money, but rather maintaining patience and selectively entering the market at the right time.
6. Position control and averaging down strategy.
• Initial position suggestions: start with a small fund, 30-50U, combined with 20x leverage to control risks.
• When making profits, you can try to moderately increase your position, but do so cautiously, especially after significant profits, as new positions can easily be lost to market pullbacks.
• When margin profits exceed 200%, set a 40% pullback take profit and protect another portion of the profits to the break-even price.
7. Summary and reflection: Keep learning and continuously improve.
Successful traders do not always make perfect market judgments, but improve their trading ability through continuous learning, summarizing, and reflecting on the market. Success in trading is not just about technical accumulation but also about cultivating the right mindset.
After each trade, reflect on your actions: were they too aggressive? Did you strictly adhere to your stop-loss strategy? Did emotional fluctuations affect your decisions? Through these reflections, gradually improve your understanding and judgment of the market.
Summary
1. Reasonably allocate funds and control positions;
2. Clear stop-loss and take-profit strategies must be established and set reasonably;
3. Maintain rationality and avoid emotional trading;
4. Withdraw profits promptly after making gains to avoid losses from averaging down;
5. Learn to summarize experiences and continue learning.
By following these principles, you can steadily advance in cryptocurrency contract trading, avoid significant losses, and gradually accumulate wealth. Remember, opportunities in cryptocurrency are always present, but those who can achieve long-term stable profits are traders who can control their emotions and manage risks reasonably.
I hope everyone can steadily advance in this market and achieve their own success!
