You have $100 in your account and are wondering how to allocate capital reasonably when trading futures? Don't worry, below is a reasonable allocation method to help you survive in this market and gain experience without losing too much capital.
🔍 Suppose you use leverage of X50 (depending on the trading volume, leverage can be adjusted, but X50 is a common level). So, how should capital be allocated reasonably?
🤑Basic capital allocation method:
Allocate 2% to each order (whether using X50 or X20, such division helps you control risk and avoid account burnout). If you use X20, then 5% is also a safe level. This means you only use a small portion of your account for each order, helping to minimize risks when the market fluctuates strongly.
Potential profit: If each order increases by just 1%, you could achieve a 50% ROI, equivalent to $1. With such a month, you could achieve 30% profit (of course, depending on market conditions). After depreciation, the feasible profit would be about 20% per month.
🤑Why is 20% per month impressive?
If you have a larger capital, a 20% profit each month will be extremely impressive. This helps you see that sustainable and patient investing always yields better results than chasing "quick wins."
🤑How to survive in the market:
Such capital allocation helps you get used to capital management and can help you survive longer in the market, thus accumulating practical experience without taking too many risks. This will help you minimize tuition fees and learn from mistakes.
More importantly, technical analysis will be a key factor to help you choose a good entry point. Remember not to FOMO (fear of missing out) but be patient and wait for true opportunities. Not rushing is the principle when trading futures, especially when starting out.
👉Additional notes:
Setting a stop-loss is extremely important. You should learn how to manage risk and set reasonable stop-loss levels to protect your account from unforeseen strong fluctuations.
Always keep an eye on projects and news to get updated information about the market and avoid sudden price dumps.