In fact, contracts are not designed for average players.

1. Capital management must be up to standard. With leverage of 0-100x, short-term losses are inevitable. The risk per trade should generally not exceed 2%-3%, while aggressive players can go for 5%-8%. Exceeding 8%-10% risk means a drawdown during adverse periods can reach 70%, and the breaking point for most people's mentality is around 50%. Strictly enforce capital management.

Many people like to trade with 5x or 10x leverage, operating at levels above 4h. Stop losses at levels above 4h generally range from 5%-15%, with single trade risk reaching 25%. This approach is tantamount to seeking death. To ensure risk levels while also opening high leverage, the level must be lowered to 1 hour, 15 minutes, or 5 minutes.

At smaller levels, fewer players can manage them. Generally, the limit for average players is 1h-4h, while 5-15 minutes are manageable for professional players. Even professional players generally cannot manage 1-minute levels.

2. The trading system must be up to standard. Developing a trading system requires long-term accumulation of trading experience. A successful system is marked by not trading outside its model, with clearly defined conditions. During this process, continuous iteration is needed, experiencing the baptism of bull and bear markets and the mainstream of counterfeits. Since it's leveraged trading and T+0 with frequent trades, you need to prepare 90%✖️9 for tuition fees. Many people come in with hundreds of thousands to play, but you need to understand one thing: no matter how much initial capital you have, it only covers one tuition fee, with eight more to follow. Therefore, it’s essential to trade with small capital, a few hundred or a few thousand is fine. Don’t increase your capital just because you’re making profits; withdraw profits and continue trading with small amounts. In the beginning, the system and operations won't be particularly refined, and many mistakes and excess actions are unavoidable. Many posts talk about how much they lost; in my view, such losses are meaningless and are merely a tuition fee. They haven’t even touched the door yet, and their learning curve hasn’t improved, which is no different from gambling.

3. Execution must be up to standard. Similar to last year's 519 incident, making a wrong bet can lead to irreversible losses. No matter how much you earned before, if you haven't navigated such black swan events, it all amounts to zero. Strict stop-losses go without saying; more frequent liquidations happen from counter-trend bottom fishing, like the recent Luna incident, which also resulted from counter-trend bottom fishing. Don't gamble on low-probability events, and don't fantasize about achieving everything in one go.

4. Time and experience accumulation. A round of bull and bear markets requires familiarity with the characteristics of different varieties at various stages and adjusting strategies according to market conditions.

For small retail investors, the time spent in this market is very limited, so entering such a specialized market is naturally difficult. Here are a few suggestions.

1. Small capital for trial and error. 2. Keep leverage below 2/3, and plan your capital based on the larger cycle. Consider rolling positions. 3. Trade on 1h, 4h, or daily levels for larger cycles. 4. If conditions are insufficient, non-professionals should not trade contracts on short-term and should not engage in professional trading unless absolutely necessary. 5. Without completing the previous four points, do not invest more than 20,000 yuan; only use pocket money that you won't mind losing.

In fact, in terms of difficulty, contracts are much harsher than arbitrage and spot trading in terms of results. Don’t be misled by the few people at the top of the pyramid; they are merely deceiving retail investors into entering the market. Who doesn’t know that for every general who achieves success, countless bones are left behind?

Hope for fewer tragedies and more rationality. Use light positions, follow the trend, and set stop losses. The above suggestions aim to save your wallet and prevent you from falling into the quagmire of gambling. With 2000 yuan in your pocket, why insist on trading contracts? Even if you make ten times your investment in a year, that's only 20,000 yuan. Setting up a stall for a month might be better than that. Many people end up getting stuck in a rut, insisting on making it work. The opportunity cost is much higher than other paths. Act according to your capabilities based on the conditions.

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