The taboo of contract trading: Carrying orders
"My deposit is so big, I don't believe they will blow me up."
"My liquidation price is far away, and I'm worried that you won't be able to succeed."
"I don't believe it. It can rise so high/fall so deep? How is it possible?"
"Look, I was able to carry it back. I told you, hold on until you're dead and miracles will happen!"
……
Everyone has heard of the phrase "nine deaths and one life", but not many people probably know the phrase "nine lives and one death". It is quite appropriate to use this phrase to describe the situation of carrying orders. Indeed, most of the floating loss transactions of contracts can be turned into profits by carrying orders if the margin is sufficient; a small number of cases often occur in strong unilateral trend markets, going further and further on the wrong path until the position is blown up and returned to zero.
Ordinary traders usually have a fluke mentality and fantasies; and investors have found through repeated actual combat that most contract transactions are indeed done in the opposite direction, and the situation can be changed by holding on. Holding on naturally becomes the first choice for traders to deal with floating loss transactions.
But if pretending to be dead could repeatedly move Gouzhuang, there wouldn’t be so many people losing completely. Let me ask, if there is only a 10% or even 1% probability, is it still rare in the currency circle? Since 2020, the entire cryptocurrency market value has been wiped out by 50% in one day twice (312,519), not to mention countless high-volatility markets. In the currency circle, you must always be vigilant, small probability events often happen!
There are no more than two forms of carrying orders. The first is to continue to open positions on the losing positions to increase the position and spread out the cost of opening the position, so that the new average price of opening the position is closer to the latest price, making it easier to unwind; the second is not to add new positions, but to increase the margin, so that The liquidation price is further away from the latest price, and the room for error is greater. In fact, most investors will also implement the above two methods of carrying orders at the same time, not only increasing margins, but also increasing positions, vowing to fight Gouzhuang to the end!
Carrying orders will also incur huge opportunity costs. Although investors can withstand floating losses in most cases, all of their own funds are often occupied in the process. The currency circle is like this. Often when you have no idle funds, a good trading opportunity will suddenly appear for you. At this time, you can only feel helpless. I have no food left in my hand, and I am disappointed when I see the young model! Can you always have bullets in your hands?
There is a popular saying in the trading market: Carrying orders is fun for a while, but stopping losses is fun for a lifetime. It's great to turn a loss into a profit, but when an extreme market situation occurs, all your funds are wiped out, all the previous glory is dimmed, and the end can only be described as tragic.
The opposite of carrying orders is stop loss. Stop loss means accepting and executing the punishment for your own trading mistakes. It is normal for contract transactions to go in the wrong direction. You must be decisive in admitting your mistakes and never add mistakes to mistakes. You value your own money, so why do you need others to point fingers and look at you strangely? Furthermore, if you adhere to the concept of losing a small amount of money and making a lot of money, that is, if you go in the wrong direction, stop the loss decisively and do not magnify the loss; if you go in the right direction, take it and let the profits run and expand infinitely. At least, you will survive in this thorny market. longer.
Of course, wealth still depends on luck, and everyone knows the truth. If you are just complaining, you hope to unite your knowledge and action, and abandon the idea of taking orders. mutual encouragement!
I am your Uncle Nakamoto Pear, slightly sweet. I hope this article can inspire your trading.
This article includes "Pear Thoughts". "Pear Thoughts" is a collection of written records of Uncle Nakamoto's thoughts on the currency exchange. The contents are all fabricated pictures. Any similarity is purely coincidental; the contents of "Pear Thoughts" are all It does not constitute investment advice; it is updated from time to time for mutual progress.
