Before you participate in the Futures market, let's explore some risk management strategies:
1. Determine the acceptable level of risk
• Capital management: Only invest a small portion of your capital (e.g., 1-2% per trade) to avoid significant losses.
• Do not over-leverage: Limit the use of high leverage as it can quickly increase losses.
2. Use protective tools
• Stop-loss: Set a stop-loss order to limit losses.
• Take-profit: Set a take-profit order to lock in profits when the market is favorable.
3. Manage emotions
• Trading discipline: Do not get swept away by the market or trade based on emotions.
• Avoid overtrading: Do not trade excessively, especially in highly volatile markets.
4. Understand the market
• Technical analysis: Use indicators like RSI, MACD, Bollinger Bands to identify price trends.
• Fundamental analysis: Monitor news related to the crypto market, such as legal regulations or major events in blockchains.
5. Diversify strategies
• Portfolio allocation: Do not focus solely on one type of asset or specific contract.
• Combine short-term and long-term strategies: To mitigate risks from unusual fluctuations.
6. Understand futures contracts
• Know about the types of contracts: For example, perpetual futures and standard futures with expiration dates.
• Understand funding rate: The funding rate affects the costs of holding positions in perpetual contracts.