Today let's briefly talk about perpetual contracts. As the name suggests, they have no fixed expiration date and are considered quite innovative in the current digital asset derivatives trading. As long as there is no forced liquidation triggered and one does not voluntarily close the position, they can hold it indefinitely.
So how many times of leverage is appropriate in practice? Previously, I discussed with friends in the industry, some are used to 50 times leverage, while others often use 30 times. For a certain popular digital asset, 30 times leverage requires 16U margin, 50 times requires 10U, and 100 times only needs 5U.
Under the same market conditions, I personally prefer 100 times leverage. Why? Because once you choose a leveraged contract, regardless of whether it's 1 time or 100 times, risk exists. However, the difference in returns between 1 time and 100 times under the same market conditions is too significant. Some say that 1 time has less risk, which is indeed true, but for a certain popular asset, the cost of one contract under 1 time leverage can be as high as over 470 U. If the price doesn't fluctuate much, just the transaction fees can be burdensome, and even if one makes a profit, it's not much. Therefore, if you are going to trade leveraged contracts, you must fully utilize the advantages of leverage.
However, it should be noted that many people use a small amount of capital to engage in contracts that exceed their capacity, and the margin is not enough to withstand market fluctuations. When faced with price oscillations or significant rises and falls, it is easy to be forcibly liquidated, and even if the market improves afterward, it will have nothing to do with them. Therefore, when trading perpetual contracts, it is necessary to prepare a little more margin if conditions allow; having an extra layer of protection is always good.
Every investment carries risks; what we need to do is try our best to reduce risks before pursuing returns. Holding onto a position stubbornly is a major taboo in trading, and timely stop-loss is particularly crucial. By using a separate position mode, it can better control risks; don't play games with your own funds.
Every day, you can set a small goal for yourself. Once achieved, take profit in a timely manner, and trading will feel more relaxed. Friends who have been in this kind of trading for a long time should understand that if you have a capital of 5000U, earning 50-100U daily is not too difficult. With some methods and skills, the success rate can be even higher. Even considering market fluctuations and unexpected situations, if you calculate moderately, in a month of 30 days, as long as you achieve the goal for 20 days, you can ultimately make a profit. I hope these shares can help everyone.
