I see many people saying that they opened 5x or 10x leverage, and that the leverage is already quite small.
In fact, I have to tell you all, you are wrong.
Leverage is not calculated like that at all. The leverage rate calculated by the platform has nothing to do with you; it's more about the proportion that affects platform security. You should calculate risk based on stop-loss or full principal.
With such large volatility in crypto, it's fine to open positions in equal increments, around 10~20% of the principal each time, with a total position limit of about 2 (short) to 4 (long) times the principal. The overall stop-loss risk at the same time should be high but within 20% of the principal (or the actual psychological tolerance range must also be less than 20%). I recommend a time-averaged risk of 10%, meaning there will be periods of no positions... Some may ask, then why do contracts at all... hehe... To say something that may offend the entire crypto community, do you really want to earn coins or make money? Is there a more flexible speculative tool than contracts? Is USDT really useless? In the face of a bear market, what is safer, coins or USDT? When you spend money, do you spend coins or USDT? Fellow crypto friends, trading contracts (pure speculation) and investing in coins (similar to venture capital) are two completely different professions. The essence of contracts is trading risk. Or in other words, using risk management and expectations to make money. When trading contracts, you must clarify this statement.
You can choose not to believe in technology, not to believe in market makers, not to believe in K-line moving averages, not to believe in BTC+, and think they are all scammers. You can also choose to believe in these things; these conceptual issues will not hinder you from making money. But there is one thing you must understand, and that is [risk]. What is risk? How to manage risk? How to calculate risk? How to operate risk? How to withdraw from risk... How to survive... - You cannot earn money beyond your cognitive range... Originally, if you invest in a coin and its value doubles, you earn 100%; then if you trade contracts with 3x leverage, and earn 300%, where does that extra money come from, and who earns it, do you know? - For contract trading, what you earn is actually money from risk management, from the losses and liquidations that others hand over to you. To get this money, first, you cannot be liquidated... In fact, looking at the market from the perspective of [risk] is completely different from how ordinary people view the market. It’s like looking at a mountain from the bottom versus having an overview from the top; they are not the same thing at all. Just to give an example, people who buy coins can hold positions and wait for a rise, endure losses, and emphasize patience... But for contracts, if you hold positions and wait, and endure losses, you most likely won't survive the first three episodes. Therefore, truly risk-based operations are completely different from dream-based methods. In the trading market, dreaming costs money, while those who manage [risk] strive to take that money. So, do you want to be a [dreamer] or a [risk manager]? It depends on you. However, [dreamers] should not trade contracts; trading contracts will shatter your dreams built over years in just a few days, and waking up is too quick.
Anyone who has made a lot of money will feel at some point: 'That period was almost like picking up money.' It's somewhat true, but—when your opportunity comes, meaning when it's your turn to pick up money, you must be alive and have capital to pick up money. Yes, making money from contracts isn't difficult... After all, so many people blow up their accounts and hand over money. They are speeding on the edge of a cliff; you just need to wait at the bottom of the cliff and pick up some parts to get by. The difficulty lies in the fact that it is inherently against human nature. Basically, you have to think in the opposite direction of ordinary people's thoughts, like 'getting rich overnight.' Whenever you are eager to add to your position or open a position, you should think about what it means to 'go against human nature.' ... If buying coins is fishing, then trading contracts is stepping into the boxing ring.... So I say that having a lot of time in a no-position state is very normal. Waiting, testing, retreating, trying again, waiting again... this is the norm for successful speculators. In fact, strategies for a period of time are almost straightforward and can be said to be well-known. For example, on February 14, 2022, many teams' operational strategies are to short most cryptocurrencies and time to long BTC as a hedge. There’s not much to say about the reasons; just think of yourself as a big player in the crypto space and deduce from there. With such an absolutely profitable strategy, 80% of people still won’t make money from trading contracts.
And this simple strategy actually contains countless details. For example, the simplest operational principles, why not short based on BTC directly, why shorting is much more conservative than longing, and why the holding time for shorts is much shorter. How to handle stop-loss when shorting, how to short various technical coins... The stop-loss plan for contracts needs to be theoretical and worth studying; the value of stop-loss theory is at least half of your investment in contracts. If you really can't find one, you need to derive one yourself. A complete set of theories means a complete set of operations; if you strictly execute it, there will always be opportunities. Trading is like this: on the surface, it is extremely simple, just a buy and a sell (one minute on stage), while countless people have put in the effort behind the scenes (ten years of effort offstage)... Overall, this is a profession. It’s not that beginners can’t do it, but you must study and train seriously before you can truly step onto the stage.
