Have you also suffered in the contract market, unable to sleep due to consecutive liquidations? There was a time when I, like you, experienced the darkest moment of my account's funds going to zero and my mindset completely collapsing – losing 500,000 within 3 months, even standing on the edge of a cliff in life. But later, with a unique method, I turned around with the last remaining 5000 yuan, ultimately earning 1 million. Next, I will reveal the truth behind why 90% of people lose money in contract trading and share the '3 Disciplines + 1 Formula' that helped me succeed.
One, The Core Misunderstanding Behind 90% of Traders' Losses (1) The Gambler's Psychology of 'All In for Wealth' Many people view contract trading as a shortcut to overnight wealth, entering the market with the gambler's mentality of 'just one big bet for financial freedom'. However, this mindset often leads them to be instantly consumed by the market when faced with a 'Heaven and Earth Needle' situation, losing all their funds. Like me back then, seeing a certain currency surge in the short term, I recklessly went all in, only to suffer the consequences when the market was manipulated and my account funds disappeared in a matter of minutes. (2) The Fatal Habit of Holding Without Stopping Losses Even when mainstream coins like Bitcoin drop by 30%, many traders still fantasize about a rebound and choose to hold without stopping losses. However, the cruelty of the market far exceeds expectations, and this approach will only exacerbate losses, ultimately leading to an irreversible situation. I once firmly believed that the price would rebound quickly during a Bitcoin downturn, not only did I not stop loss but also kept adding positions, resulting in worsening losses until my account was liquidated. (3) The Trap of 24-Hour High-Frequency Trading Frequently engaging in high-frequency trading can exhaust traders physically and mentally, and the high transaction fees can even eat away at the principal. I once pursued short-term profits, trading extensively every day, only to find that after deducting transaction fees, I not only did not profit but actually lost a significant amount.
Two, The Key Transition from Loss to Profit: Contracts are a Mathematical Game After experiencing painful lessons, I finally understood: contract trading is not gambling, but a game that requires mathematical thinking and strategy. As long as one adheres to the '3 Disciplines + 1 Formula', anyone has the chance to become one of the 10% winners. Three, The Stable Profit Strategy for Perpetual Contracts (1) Step One: Choosing Coins is 100 Times More Important than Opening Positions
Upward Market: Only Long the Leading Coins
When the market shows an overall upward trend, choose leading coins like Bitcoin (BTC) and Ethereum (ETH) for long operations, as leading coins tend to have stronger leading capabilities and stability during an upward trend. For example, during a certain upward trend of Bitcoin, I firmly went long BTC and ultimately gained considerable profits.
Downward Market: Only Short the Weakest Coins
During a market downturn, choose those currencies that are relatively weak and lack actual value support for shorting. These currencies often experience larger declines during a downtrend, providing more profit opportunities. It is important to note that one should never touch contracts of new coins, as 99% of new coin contracts are tools used by whales to profit from retail investors.
(2) Step Two: The Correct Posture for Scientific Positioning
Pyramid Positioning Method
When opening a position, the initial investment should not exceed 5% of the total capital. When the position shows a floating profit of 50%, increase the position by 3%. This method of increasing the position can effectively control risk and avoid excessive losses due to one-time large additions. For example, if I start trading with 5000 yuan, I only invested 250 yuan in the initial position. When this trade reaches a profit of 50%, I will increase the position by 150 yuan.
Devil Point Sniping
Only buy the dip after mainstream currencies like Bitcoin drop by 20%, or short at the next high after a surge. These points often represent turning points in market sentiment, and grasping these points can increase the success rate of trades. I once decisively bought the dip after Bitcoin dropped by 20%, and then the price rebounded, yielding good returns.
(3) Step Three: The Ultimate Art of Stop Loss and Take Profit
Stop Loss Setting
Set the stop loss at 2% of the cost price. For example, if the purchase price is 10,000 yuan, the stop loss should be set at 9,800 yuan. This way, in case of adverse market fluctuations, you can stop loss in time and prevent further losses.
Take Profit Setting
Set the take profit at 3 times the stop loss. That is, if the stop loss is 2% of the cost price, then the take profit is 6% of the cost price. This setting allows profits to run freely while ensuring that profits are locked in timely after achieving a certain gain, avoiding profit retracement.
Four, Core Formula: Let Profits Run, Do Not Let Profits Turn into Losses
By strictly adhering to 'coin selection discipline + position opening discipline + stop loss and take profit discipline', combined with the above operational methods, I have summarized a core formula: Reasonable Coin Selection + Scientific Positioning + Strict Stop Loss and Take Profit = Stable Profits. This formula seems simple, but very few people can execute it strictly.
Five, Heartfelt Words for Traders
Contract trading is indeed like licking blood on the tip of a knife, full of risks, but for those who master the correct methods, the market is never short of opportunities. I proved with my own experience that even in the most desperate moments, as long as one can adjust their mindset, learn, and master the correct trading strategies, there is a chance for a turnaround.
Finally, I remind everyone that when engaging in contract trading, it is essential to remain rational and not be swayed by greed and fear. At the same time, continue to learn and summarize experiences to improve your trading system. Remember, in the contract market, surviving and achieving stable profits is the ultimate goal.
(Risk Warning: The above content is merely a personal trading experience sharing and does not constitute any investment advice. Contract trading is highly risky, please participate with caution.)