A Simple Guide to Perpetual Contract Trading
1. Understand the Rules of the Game
• Funding Fee: Both long and short positions pay each other to cover price differences, mainly to prevent the contract price from straying too far from the spot price. If it's a positive fee (longs pay shorts), don't rush in; if it's a negative fee (shorts pay longs), be careful as it may drop even harder.
• Leverage: It's like a magnifying glass; with 10x leverage, profits can multiply by 10, but losses will do the same. Beginners should use a maximum of 5x, and experienced traders shouldn't exceed 10x, or they risk losing everything.
• Mark Price: Designed to prevent surprise attacks, it calculates profits and losses based on the average price from several platforms, avoiding sudden crashes that could wipe out your position.
• Automatic Position Reduction: During extreme market conditions, positions that incur too many losses may be forcibly liquidated, which helps to share some risk.
2. Four Steps to Trading, Follow This Without Panic
1. Look at the Big Picture: Open the daily chart; if the 30-day moving average is above the 60-day moving average and the MACD red bars are getting longer, it's a bullish trend; the opposite indicates a bearish trend.
2. Find Entry Points: On the 4-hour chart, if the price retraces to the middle line of the Bollinger Bands and the RSI bounces up from below 40, it's a reliable entry point; if the 1-hour chart breaks above a downtrend line with doubled trading volume, it can also be a good entry.
3. Set Stop Loss: Before buying, decide how much you can afford to lose at most (e.g., 5% of your capital); if it reaches this point, exit quickly and don't hold on, as holding until the end may result in a total loss.
4. Take Profit and Exit: Sell when you've achieved your target (e.g., 10%), or wait for a reversal signal (e.g., MACD turns green) before exiting; take your profits without being greedy.
3. Essential Tools for Beginners
• Use TradingView for chart analysis; adjust moving averages and MACD templates for clear insights.
• Check fees on CoinGlass; simply look at the heat map: reduce long positions when it's red (positive fee) and reduce short positions when it's green (negative fee).
• Practice on Bybit's demo account for at least 3 weeks; only switch to real money when your win rate exceeds 65%.
Final Reminder:
Don't hold too heavy a position (no more than 30% of your capital in a single asset), and strictly follow the steps. Surviving in the market is more important than anything else; there will always be opportunities in a bull market, so don't rush for immediate gains.
