When a novice plays contract trading, they need to pay special attention to the following aspects to reduce risks and increase the chances of success:
1. Be careful when using leverage
Contract trading allows the use of leverage, which amplifies the returns while also amplifying the risks. It is easy for a novice to get liquidated due to the use of high leverage. It is recommended that a novice start with a low leverage, such as 2x or 3x, so that even if the market fluctuates greatly, the loss will not be too large.
Recommendation: Beginners are advised to keep leverage low and consider increasing leverage after becoming familiar with market fluctuations.
2. Set stop loss and take profit to control risks
In contract trading, market prices fluctuate very quickly, especially in the cryptocurrency market. In order to avoid huge losses in short-term fluctuations, stop loss and take profit settings are crucial.
Stop loss: When the loss reaches a certain amount, the position is automatically closed to avoid further losses.
Take profit: Automatically close the position when the profit reaches the target to ensure that the profit is safely pocketed and prevent the market reversal from turning the profit into a loss.
Recommendation: Set stop loss and take profit before each transaction and strictly implement the trading plan.
3. Don’t trade with a large position
Heavy positions mean that most of the funds are used for one transaction, which is extremely risky. If the market trend is contrary to expectations, it is easy to cause huge losses. Newbies should diversify their funds to avoid investing too much money at one time.
Recommendation: The funds for a single transaction should be controlled within 20% of the total funds to ensure sufficient funds to deal with possible risks.
4. Emotional control and avoid impulsive trading
Contract trading is highly volatile, which can easily lead to emotional reactions and irrational trading decisions. Panic liquidation and greedy increase of positions are common mistakes made by novices.
Recommendation: Make a trading plan, stay rational, and do not frequently change trading strategies due to short-term gains and losses.
5. Fully understand the market and contract rules
Before entering into contract trading, novices must understand how the market works and the different types of contracts provided by the trading platform (such as delivery contracts, perpetual contracts, etc.), understand mechanisms such as leverage, forced liquidation, and margin, and avoid losses due to lack of understanding of the rules.
Recommendation: Conduct sufficient market research before trading, or accumulate experience through simulated trading.
6. Pay attention to fees and funding costs
Contract transactions usually have high handling fees and funding fees (especially perpetual contracts). New traders need to understand these fees in advance to avoid excessive trading frequency, which will increase costs and weaken profitability.
Recommendation: Reasonably control the transaction frequency and pay attention to the funding rate, especially when holding positions for a long time, the impact of funding rates is very large.
7. Continue to learn technical analysis
Technical analysis is an effective tool for judging market trends. Newbies can learn some basic technical analysis tools and indicators, such as moving average (MA), relative strength index (RSI), Bollinger Bands, etc.
Recommendation: Use technical analysis tools to judge trends and fluctuations to help you make more rational trading decisions.
Summarize
Newbies who play contracts need to focus on risk management, stay rational, learn trading rules and technical analysis, especially be cautious in using leverage and avoid emotional operations. By gradually accumulating experience and strictly implementing trading plans, newbies can also gain good returns in contract trading. #9月美国CPI实现6连降 #比特币采用