First of all, regarding contracts, many people think they are a terrible threat, but this part of the population lacks understanding. Existence is reasonable; there are probably two types of people who hold this view:
1. Those who have suffered significant losses in contracts may have lost quite a bit of money, or even blown up several positions, leading them to believe that contracts are a terrible threat, and trading contracts will eventually lead to zero.
2. Another type of person is the one who follows the crowd, who has never traded contracts themselves. They see countless discussions online saying 'those who trade contracts are all gamblers, they will eventually go to zero...' Thus, they subconsciously think contracts are really scary and should not be touched.
And I think contracts are neutral; they are like a knife. If used well, they can lead to quick wealth; if not used well, they can easily backfire. For those trading contracts, the requirements are much higher than for spot trading. So, should one set stop-losses when trading contracts?
I think there are two situations. The first is short-term players, and they definitely need to set stop-losses. The second is medium to long-term players, who may not need to set stop-losses. Of course, the premise for both situations is to manage positions well. Simply put, don't let extreme situations blow up your positions.
For short-term players, the goal is to seek short-term profits. If they are unwilling to set stop-losses, it can easily lead to losses exceeding what they can bear, causing them to exit permanently.
For medium to long-term players, I feel that stop-losses are not as necessary, of course, this depends on managing your positions well and ensuring they are safe enough. If the market drops or rises, you can still perform averaging operations. Of course, another very important factor is that the direction must be accurate enough; otherwise, this approach could lead to irreversible losses.
In short, whether to set a stop-loss or not has no absolute right or wrong; it depends on your trading style and market conditions.
Stop-loss: Suitable for short-term, high-leverage trading, or when market uncertainty is high, with the aim of controlling risk and protecting capital.
No stop-loss: Suitable for medium to long-term investments, when the trend hasn’t changed, or when the position is very light, with the goal of capturing bigger opportunities.
No matter how you choose, the most important thing is to execute according to your plan, and not let emotions sway your decisions. Trading is a marathon, not a gamble; steady progress is the key to going further.
