Newbie Xiao Li turned 500U contract principal into 3 times, but when the market suddenly reversed and hit the stop loss, unwilling to accept, he opened 5 more positions in a row, losing all his profits and even losing an additional 2000U. Contracts are leveraging 'dancing on the edge of a knife'. To survive, you need to remember 8 rules:
1. After hitting the stop loss, do not 'get stubborn', prioritize calmness.
Contracts are 'betting small to win big', and losses are normal. If you hit the stop loss twice in one day, you should leave the market immediately, as emotions have interfered with judgment. It is advisable to review the market or position issues for 1-2 days.
2. Do not treat trading as a get-rich-quick gamble.
Trading is not a shortcut to wealth; do not rush to recoup losses, frequently open positions, or heavily invest (e.g., betting 80% of principal). Under leverage, the market going against you by 10% or liquidation can easily occur. A calm mindset and avoiding greed is key to longevity.
3. Go with the trend, do not go against it.
Understanding the trend is fundamental. In a one-sided market, you must go with the trend and not try to catch the bottom or escape the top. Going against the trend is easy to lose (e.g., shorting during a one-sided rise at the beginning of 2024). Patience is needed to wait for the right entry point.
4. Calculate the risk-reward ratio before opening a position.
Profits need to 'cover multiple losses in one trade', at least find '2:1' trades (e.g., stop loss at 50U, profit target at 100U). An imbalanced risk-reward ratio makes it difficult to profit in the long run.
5. Do not be a gambler opening positions frequently.
Frequent trading is an 'invisible killer'. Newbies should not mistakenly see volatility as an opportunity. Blindly opening positions incurs transaction fees and leads to judgment fatigue. Non-experts must restrain themselves and strive for 'less operation, precise timing'.
6. Only earn money within your understanding.
There are many high-return opportunities in the market (e.g., new coins rising 10 times), but you need to judge whether it's within your understanding (e.g., if you understand spot trading, do not touch high leverage). Profits beyond your understanding are 'luck money'; understanding the market to make money is reliable.
7. Do not 'hold positions', stop-loss is a safety net.
'Holding positions' is the beginning of the abyss. Newbies should not wait for the 'market to correct'; adding funds before liquidation can easily lead to total loss and debt. There are no 'absolute corrections' in contracts; it's more rational to stop-loss to protect principal.
8. Do not be 'elated' by profits; pride can lead to losses.
Profits can easily lead to blind confidence (e.g., increasing position size after winning 3 trades without stop-loss). Old Chen incurred a total loss of 20,000 U after opening large positions without stop-loss following 5 profitable trades. Maintain clarity in profits, attributing it to 'correct strategy', and strictly adhere to rules.
Contract trading is like walking on a tightrope; leverage is the balancing pole, and rules are the wire. If you have stepped into the pitfalls of 'holding positions' or 'frequently opening positions', or have experiences in turning losses into profits, feel free to share in the comments: help others avoid pitfalls and seek answers. @Air 安叔
