Today I bring you a way to trade contracts, trying to help you avoid pitfalls and reduce losses.

1. Short-term cryptocurrency trading

This is the most common way to trade contracts and is usually the first approach for newcomers to the cryptocurrency world. This method is very risky and often relies on luck to make a profit; the earnings are often not enough to cover a single loss.

2. Learn to take profits and cut losses

In contract trading, taking profits and cutting losses is very important. The market is highly volatile, and prices can change rapidly. Setting stop-loss orders can help you close positions in unfavorable market conditions, preventing significant losses. A good take-profit strategy can help you secure profits and prevent losing them due to market reversals, allowing you to control your profit points well.

3. Disciplined trading

In contract trading, one often gets influenced by their own greed, fear, and emotions, which is the primary factor leading to losses. Before each entry, set your own take-profit and stop-loss levels, maintain your trading rhythm, and reduce the emotional interference in your decision-making. Set a trading plan for yourself, limit the number of trades per day, and avoid thinking about entering another trade to recover losses, as this often leads to even greater losses during the recovery process.

4. Analyze the market

The cryptocurrency market can exhibit either trending or sideways movements. During weekends, sideways markets are most common. In such conditions, long-term trades are not suitable; it's better to take profits when you have them and secure your earnings. Trending markets only occur for a limited time and are the best to trade. Buy on dips and sell on highs to secure relatively high profits.

5. Analyze trends

If you can accurately judge the trend, you have already won half the battle. You can look at daily and weekly candlesticks to determine whether the market is in an uptrend or downtrend. Chasing prices can lead to losses and ultimately a poor exit.

6. Position management and leverage techniques

Position management is very important in contract trading. For example, if your account balance is 1000, a margin rate of 5%-10% for your trades is ideal, which means 50-100. This way, you won't easily face liquidation. The size of leverage should be determined according to market conditions. Quick entries and exits with high leverage yield fast returns and high capital efficiency. A profit rate of 20%-50% is ideal for taking profits. The market changes quickly, so learn to restrain your greed and know when to stop. Those who are greedy often face unfortunate outcomes. In summary, use high leverage for short-term trades and low leverage for long-term trades.