Ten Common Misconceptions About Contract Trading
1. True big players accurately target with 5% position sizes for each trade; only beginners go all in every day to bet on direction.
2. Large funds lock in profits + dynamically adjust leverage; even if forced liquidation brings the price to zero, they can still survive (but may be stuck for a long time).
3. Losing 50% means you need a 100% gain to break even; it's better to place orders in batches and wait for the market to hand out money.
4. Using 5x for trends + 20x for short-term trades + 50x for pinpoint targeting must be combined to be both profitable and safe; direction is fundamentally unimportant.
5. The probability of rising or falling is each 50%; the key is how fast you can run if you're wrong, faster than a rabbit.
6. If you don't sell when it rises from 10U to 100U = you wasted your time; if you don't run when it falls from 100U to 10U = you go to zero.
7. Look at the weekly chart to determine direction, find points on the daily chart, and operate on the 4-hour chart for survival.
8. Cut losses when needed; hesitation leads to defeat, and holding on stubbornly leads to liquidation.
9. After a sharp rise, look for resistance to short; after a sharp fall, look for support to go long; chasing trends and shorting in a downtrend leads to quick losses.
10. The liquidity is best during the US session, pinning is easiest during the Asian session, and night owls die at 3 AM.