Contract trading carries high risks. To avoid liquidation, attention must be paid from multiple aspects. Here are some methods:

Reasonably control position size

- Light position trading: Avoid excessive leverage. Risks are high with leverage above 10 times. It is recommended to use 2-5 times leverage initially, keeping the position size below 20%-30% of total funds. For example, with 100,000 yuan in funds, use 20,000-30,000 yuan for opening positions.

- Build positions in batches: Avoid fully entering positions at once. Start with 20% of the position, and increase if the market is favorable, but keep the total position size below 50%. For instance, if you buy with a 20% position, increase by 30% after confirming the upward trend.

Strictly set stop-loss and take-profit

- Set stop-loss: Set stop-loss levels according to risk tolerance. For highly volatile contracts, set a stop-loss of 3%-5%. For example, if the purchase price is 1000 yuan, the stop-loss could be set at 970-950 yuan.

- Take profit in time: Take profit when the expected profit target is reached. Cashing out is safe. For instance, close positions when profits reach 10%-15%.

Choose suitable trading varieties and time

- Choose trading varieties: Select mainstream contracts with good liquidity and moderate volatility, such as Bitcoin and Ethereum contracts, which are more stable than smaller coins, have good depth, and lower slippage risks.

- Choose trading time: Avoid periods of high volatility, such as during major policy releases or extreme market conditions. Trade during relatively stable periods.

Strengthen risk awareness and market analysis

- Enhance risk awareness: Do not follow the crowd blindly, understand that contracts carry high risks, and both gains and losses may be magnified. Do not invest living funds.

- Conduct in-depth market analysis: Use fundamental and technical analysis, pay attention to the macro economy and project fundamentals, and use indicators such as moving averages and MACD to assist in judging trends, rather than relying on gut feelings to trade.

Manage funds well and adjust mindset

- Fund management: Set aside dedicated trading funds that are not to be borrowed for other uses. Reserve part of the funds to cope with adverse situations to ensure sustainable trading.

- Adjust mindset: Stay calm and rational, do not rush to recover losses, do not be greedy when making profits, trade according to plan, and do not be swayed by emotions.