Contracts are just tools. You can use them to gamble, going all in at 125X, betting that this time your luck is good, turning a bicycle into a motorcycle, a motorcycle into a Lambo, and then a Lambo back into a bicycle. Or you can first take the time to learn how to trade and manage risks, for example, using 5% or 2% of your account each time, conducting at least 100 trades of backtesting over a period of at least six months on TradingView to verify whether your strategy is profitable. Otherwise, money earned from gambling is likely to be returned to the market sooner or later.
I used to do cross-border e-commerce, Facebook ads, Google ads, and affiliate marketing. It wasn't until I encountered trading that I realized how good a skill trading is and how it can be a business model that allows you to make money independently. Unlike some money-making models, where the cost of trial and error is high, and the replicability after making money depends entirely on luck and platform policies. Learning trading can completely transition from backtesting to forward testing, then using a small account for real-time trading, and finally transitioning to operate a large account for real-time trading.
I know a group of traders abroad, some of whom are still in high school but are already very capable traders. In the future, becoming a full-time trader will be a natural progression for them. Of course, most people in the group trade forex, while I mainly trade cryptocurrency; the strategies are similar, and some strategies work across different fields, whether you're trading stocks, futures, forex, or cryptocurrency.
As I mentioned before, if you want to treat trading as a skill to learn, it might open a new door. Whether trading cryptocurrency contracts or forex futures, to become a consistently profitable trader, you need to do the following three things well.
Start by mastering a strategy. Of course, the prerequisite is to choose a field first, such as only trading cryptocurrency contracts. You can try different strategies while you start learning to find one that suits you. For example, some people can only spend one or two hours a day watching the market, so a strategy that requires long hours of watching may not be suitable; compared to day trading, they may need a swing trading strategy.
Assuming you've spent some time learning (there are countless free resources on YouTube) and found a strategy you like or that suits you, you want to backtest this strategy for at least 100 trades. I recommend using data that spans more than a year with over 200 trades. If you're profitable, then you can consider verifying your strategy in the market, rather than going all in when you don't understand anything at the beginning (the newer you are, the bolder you get, often going all in). If it's a swing trading strategy, for example, looking at the 4-hour chart, you may not need to test that many trades to obtain relatively reliable backtesting data.
2. Risk management. This is completely indispensable. I don't know if some people understand risk management when they are using 125X leverage on a full account. No trader can achieve a 100% win rate. What we need to do is to earn more than we lose over a month or a year; then you are profitable. Note that I said earn more, not win more; some high RR (risk-reward ratio) strategies allow you to make money steadily without needing to win more than you lose. For example, with a 1:3 RR strategy, achieving a 33% win rate means you are profitable, losing two trades and winning one, but the win is three times your risk. So, discussing win rate without considering RR is misleading. When I first started trading, I encountered strategies that could easily achieve a 90% win rate, but each loss would cost 15% of the account, requiring a 95% win rate to make that strategy consistently profitable. Also, avoid falling into the trap of small wins and big losses by not setting stop-losses unless your testing data supports it. In my familiar circle, every trade sets a stop-loss, so you know exactly how much you'll lose if that trade fails. Know your win rate, average RR of winning trades, and how many trading opportunities you have in the market each week or month. Then, set a percentage of your total account for each trade risk (which can be determined based on your win rate, e.g., conservatively 2%, or more aggressively 5%). Additionally, to prevent revenge trading and emotional trading, set some trading rules for yourself, such as stopping trading for the day after two consecutive losses or stopping trading after a 10% daily loss, etc. These are all part of risk management.
3. Mindset. You can only talk about mindset after doing the above well. If you don't have a backtested trading strategy that can generate consistent profits and don't do any risk management, discussing mindset is meaningless. Only after doing the first two well can the trading mindset play its role, which is of utmost importance. Some people perform excellently in backtesting but fail in real-time trading; this is likely due to mindset issues, such as constantly breaking your own rules or fearing to lose profit and closing trades early, which might prevent your winning trades from reaching the high RR you achieved in backtesting, effectively sabotaging your own rules. Also, some people want to achieve everything at once; it's normal to not find a job after four years of university, but how can you expect to learn a skill that can secure your livelihood and even achieve financial freedom to be completed in just one or two months? That's unreasonable, right? So, part-time trading while having a job is fine until you can trade full-time; your data will tell you one day. In fact, skills can often be learned quickly, while mindset requires much longer refinement, especially for those who don't start with a good mindset.
Trading is a practice, just like life. Don't pay attention to how much others made today or how their accounts doubled; your only opponent is yourself. I am also learning on this trading journey, and I hope everyone can achieve their goals.
