10 Key Principles for Winning in Cryptocurrency Contracts, 10 Traps in Cryptocurrency Contracts.
10 Principles of Contract Trading
Strict Stop Loss: Set a stop-loss level in advance (e.g., 2%-5% of funds) to prevent total loss of capital.
Start Small: Initial position should not exceed 5% of total capital, increase position after the trend is clear.
Follow the Trend: Trade in accordance with a longer time frame (e.g., daily EMA direction), do not trade against the trend.
Limit Leverage: Use 10x leverage or lower; high leverage can easily lead to liquidation during price fluctuations.
Control Emotions: Avoid letting fear of missing out (FOMO) or revenge trading after losses dictate decisions.
Pay Attention to Major Events: Reduce trading during significant events like Federal Reserve decisions or ETF approvals to avoid market chaos.
Multi-Factor Analysis: Combine technical indicators (e.g., MACD and RSI), on-chain data (e.g., exchange inflows), and market sentiment.
Gradual Take Profit: Take partial profits (e.g., close 50% at target price, set a trailing stop for the rest).
Avoid the “Holy Grail” Trap: No strategy is eternally effective; adjust based on market consolidation or trends.
Separate Accounts: Keep futures trading funds separate from spot wallet and daily expenses.
10 Traps in Cryptocurrency Futures Trading
All-In Betting: Going all in can zero out your account due to a single mistake.
Averaging Down: Adding to a losing position out of desperation only increases risk exposure.
Excessive Leverage: At 50x or 100x leverage, even minor fluctuations can lead to instant liquidation.
Blindly Following “Masters”: Do not blindly imitate thought leaders without personal analysis and risk control.
Overtrading: Transaction fees eat into profits, and emotional trading increases errors.
Ignoring Slippage: Stop-loss orders may fail during extreme volatility, leading to larger losses.
Hoping for Miracles: Refusing to set stop losses and hoping for market reversals often leads to disaster.
Believing Rumors: Trading based on unverified information can lead to traps set by large players.
Over-Reliance on Indicators: Black swan events or irrational behavior can cause technical tools to fail.
Emotional Recovery of Losses: Review trades objectively rather than blindly chasing losses.
Important Reminder:
Contract trading is a zero-sum game (transaction fees and capital costs eat into profits). Long-term profitable traders are less than 5%, and most lose all their capital.
There is no need to be smarter than the market; when the trend comes, respond and follow it. When there is no trend, observe and remain calm.
Do not trade in unclear environments, do not trade if you do not understand the market, and do not trade if the timing is not right.
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