Beginners playing contracts, a must-read for novices
Recently, many fans mentioned that they are just starting and don’t know how to operate. The initial capital is also just under 1000 USD, and they ask me for good strategies. Today I will share my suggestions. For example, if you have 1000 USD, divide it into 10 parts, and invest 100 USD each time, with a recommended leverage of 20X. Newcomers may find it hard to control their mentality at too high a multiple. The remaining 900 USD should be put in a financial account. If you lose 100 USD, do not think about adding more positions. If you lose everything, the first thing you need to do is reflect and summarize, then rest for 1-2 days. Don’t be afraid of missing market movements; Bitcoin’s volatility can happen at any time. There are large fluctuations every month; it’s up to you whether you have the luck to play. Once adjusted, divide the remaining 900 USD by 10 to make each part 90 USD, and invest again, but this time be more careful, strive to earn the money back. Suppose this time you earn 300 USD; keep 100 USD and transfer out the remaining 200 USD. This way, you will feel more secure, and your mentality will improve significantly. Do not invest everything; if a black swan event occurs, you will lose everything at once. Then you start from scratch. Objectively speaking, in contract trading, it’s best to open at 10X. If you are wrong in direction, and it drops by 10%, you will get liquidated. Even with BTC, a 20% fluctuation in a year is very normal; if you are fully invested every time, then it doesn’t matter how much you earned before; in the end, it all goes to zero. Walking by the river often, no one guarantees that they will be right every time. A great trader with a 60% success rate is already impressive. Therefore, position management is very important. Even if you have a 90% win rate, one mistake can lead to disaster.
Learn trading knowledge, implement light position operations to reduce losses. Most people lose money in trading because they do not understand the market well enough and do not know how to control positions and manage risks. Therefore, avoid increasing positions when feeling unwell; instead, reduce or close positions. If your losses exceed 2% of total capital in one day, you should be alert. If losses reach 6%, close all losing contracts, and after setting a breakeven exit price on winning contracts, rest for at least 2-3 days. Chasing prices is dangerous; unless market conditions are clear, do not chase blindly. Be cautious when increasing positions after profits, especially after significant profits, as new positions often lead to failure. If you need to increase your position, either act immediately or wait until a significant correction ends, and follow the pyramid method for adding positions. When margin profits exceed 200%, set a 40% retracement exit for half, and a breakeven exit for the other half. This is to protect profits and ensure you do not turn substantial profits into losses. Do not trade when feeling bad, depressed, or troubled in life. If you have overall losses in the past 24 hours, you should also rest for 2-3 days. Never trade against the trend, reduce trading frequency, and look for suitable entry opportunities. For correct trading, try to maintain a base position since correct decisions may continuously yield profits.
Newcomer advice:
Small funds, start with 30-50 USD
High leverage, 20 times leverage
Stop loss: Set a stop loss when entering, with a stop loss of 20-30 USD loss
Take profit: Hedging profit-taking (profit retracement 30%, profit-taking strategy)
Withdraw profits; deposits start from 500-1000 USD each time, do not overdo it.
Practice well before considering adding positions.
I am Xiao O, a professional analyst and teacher, a mentor and friend on your investment journey! As an analyst, the most fundamental thing is to help everyone make money. I will help you solve confusion and issues, and speak with strength. When you lose direction and don’t know what to do, follow Xiao O; I will guide you.
