I see many influencers saying they opened 5x or 10x leverage, claiming it is already very low.
I really have no words. In fact, I want to tell you all that you are wrong.
Leverage is not calculated this way at all. The leverage ratio calculated by the platform has nothing to do with you; it is about the proportion that affects the platform's safety. You should calculate risk based on stop-loss or sufficient capital.
With crypto being so volatile, you should open positions in equal parts, about 10-20% of your capital each time, with a total position limit of about 2 (short) to 4 (long) times your capital. The overall stop-loss risk at the same time should be within 20% of the capital (or your psychological tolerance must also be less than 20%). It is recommended to average the risk over time at 10%, meaning there will be periods of no positions... Some may ask, then why do contracts at all... Hehe... I might offend the entire crypto community by saying this: Do you really want to earn coins or money? Is there a more flexible speculative tool than contracts? Is USDT really a useless asset? In the face of a bear market, is it safer to hold coins or USDT? When you spend money, do you spend coins or USDT?
Dear friends in the crypto world, doing contracts (pure speculation) is completely different from investing in cryptocurrencies (similar to venture capital).
The essence of contracts is trading risk. Or rather, using risk management and expectations to make money.
When doing contracts, you must clarify this statement.
You may not believe in technology, the market makers, candlestick patterns, moving averages, or BTC, thinking they are all scams. Conversely, you can believe in them. These belief issues will not hinder your ability to make money.
But there is one thing you must understand, and that is 'risk.' What is risk, how to manage risk, how to calculate risk, how to operate risk, how to withdraw from risk... how to survive...
------- You cannot earn money beyond your cognitive range... Originally, if you invest in a coin, and its value doubles, you earn 100%; then if you do a contract at 3x, you earn 300%. So where does that extra money come from, whose money is it, do you know?
For contract trading, what you earn is essentially the money from risk management, the money that others lose and give to you when they get liquidated. To obtain this money, first, you cannot get liquidated...
In fact, looking at the market from the 'risk' perspective is completely different from how ordinary people see the market. It's like looking at a mountain from the bottom versus looking at it from the top; they are fundamentally different. For example, people buying coins can hold positions and wait for an increase, enduring losses with patience... But in contracts, if you hold positions and wait, enduring losses, you probably won't survive the first three rounds.
Therefore, operations based on 'risk' management are completely different from operations based on 'dreams.' In the trading market, dreaming costs money, while those who manage 'risk' are trying to take that money.
So, do you want to be a 'dreamer' or a 'risk manager'? It depends on yourself. However, 'dreamers' should not play contracts; doing contracts will shatter the beautiful dreams you have worked years for within just a few days, and waking up will be too quick.
Anyone who has made a lot of money will have a feeling during the process: 'That period was almost like picking up money.' It's about the same, but—when your opportunity comes, that is to say: when it's your turn to pick up money, you need to be alive and have the capital to pick up money.
Yes, making money from contracts is not difficult... After all, there are so many people getting liquidated and sending money. They are racing on the edge of a cliff; you just need to wait at the bottom of the cliff and pick up a few parts to get by.
The difficulty lies in the fact that it is inherently against human nature. Basically, you have to think in the opposite direction of ordinary people's ideas like 'getting rich overnight.' Whenever you are eager to increase your position or open a position, you need to think about what it means to 'go against human nature.'
... If buying coins is fishing, then doing contracts is stepping into the boxing ring... So I say it's normal to have a lot of time in no positions. Waiting, testing, retreating, trying again, and waiting again... This is the normal state of a successful speculator.
In fact, strategies over a period of time are almost straightforward and can be said to be well-known.
For example, on February 14, 2022, many teams' operating strategies are: short most coins and selectively go long on BTC to hedge.
I won't elaborate much. Think of yourself as a big shot in the crypto world, and then deduce from there. With such an absolutely profitable strategy, 80% of people still can't make money from contracts.
And this seemingly simple strategy actually contains countless details. For example, the simplest operating principles, why not short directly based on BTC, why shorting is much more conservative than going long, and why the holding time is much shorter when shorting. How to handle stop-loss when shorting, how to short various technical coins... The stop-loss plan for contracts needs to have a theory worth learning. The value of stop-loss theory is at least worth half of what you put into contracts. If you really can't find one, you have to derive one yourself (that's what I did; I found someone, but they weren't willing to teach, so I derived a set myself). A complete set of theories means a complete set of operations. If executed strictly, there will always be opportunities.
Trading is like this: seemingly extremely simple buying and selling (one minute on stage), but countless people have done the hard work behind the scenes (ten years of effort off-stage)... Overall, this is a profession. It's not to say that novices cannot do it, but you must study and train seriously before you can truly step onto the field.
I often compare flying a plane to speculation. The reason is that these two are quite similar. If you force yourself to fly a plane without knowing how, the result is a plane crash and loss of life. If you force yourself to speculate without knowing how, you will inevitably get liquidated.
Risk management and stop-loss management are equivalent to the basic skills of flying a plane. With this, you can at least ensure that you won't die.
