🔥Must-read for novice retail investors in contracts! 5 life-and-death lines to help you avoid 99% of liquidation traps⚠️
### 1. Always use only 1% of your capital to open positions! Leverage ≤ 5 times
💥Core Logic: Contracts are not gambling! 100x leverage = 1% fluctuation results in liquidation; 95% of retail investors die from 'fully invested + high leverage'
✅Practical Guide:
• 10,000 capital → each position ≤ 100U, use 5-10 times leverage (if BTC rises 10% you earn 50-100%, if it drops 10% you only lose 5-10%)
• Strictly adhere to the rule 'position size = capital ÷ 100', do not believe in 'one shot turnaround' myths
❌Avoid traps: Don't touch 'leverage bonus' activities! Exchanges make money from liquidations, only low leverage can help you survive
### 2. Always set stop-loss/stop-profit when opening positions, execute mechanically without hesitation
🚨Bloody lesson: 80% of liquidations are due to 'holding the position'! If it drops 5% and you think 'it will rebound so close the position', it eventually drops 30% and gets liquidated
✅Practical Formula:
• Stop-loss = opening price × (1 - acceptable loss ratio) Example: Buying BTC for 100,000U, maximum loss 200U → stop-loss is 100,000 - 200 = 99,800U
• Take profit in two parts: when it rises 10%, close 50% of the capital (even if you end up with a bad stop-loss, it protects your capital), set a trailing stop for the remaining 50% (raise the stop-loss line according to the K-line pattern)
💡Tools: Use the exchange's 'conditional order' to set in advance, avoid emotional trading
### 3. Only trade BTC/ETH mainstream coins, or those in the top 10 by market cap, stay away from altcoin contracts!
💣Deadly trap: A 50% rise in altcoins is manipulated by the whales, a 90% drop has no buyers, contracts are just giving money to the whales!
✅Correct posture:
• 90% of funds in BTC/ETH, 10% for trial and error in BNB/XRP and other top 10 coins
• When watching the market, only look at 'fund flow': if a certain altcoin's long-short ratio > 2:1 → it will definitely drop!
❌Never touch: New coins / coins with a market cap below 1 billion, K-line completely controlled by whales
### 4. Trade during the day + only focus on 4-hour trend levels, refuse to stay up late watching the market!
🌚Common issue for retail investors: staring at 15-minute K-line at 2 AM, resulting in dark circles and getting liquidated
✅Scientific schedule:
• Novices should only trade 'daily/4-hour trend' positions (buy on dips in uptrends, sell on rallies in downtrends); making two correct trend trades in a year is already very profitable. Don't underestimate the profits from two trend trades; they will definitely be higher than doing short-term trades every day. Do less futile short-term trading.
• Trading hours: 9:00 AM - 9:00 PM (active period for mainstream funds), set stop-loss and sleep at night
📉Key points for watching the market: MACD golden cross/dead cross + MA60 moving average, divergence signals are more accurate than short-term fluctuations
### 5. Stop trading for 24 hours after liquidation! Practice with a demo account for 3 months before trading live
⚠️Devil's Law: 99% of people who experience three consecutive liquidations will lose all their capital! A broken mindset will lead to mistakes
✅Self-rescue guide:
• First liquidation → stop for 1 day, write a 'liquidation diary' (Why did you open the position? Where did you go wrong?)
• Novices should first play 'demo contracts' for 3 months: practice making a profit for two consecutive weeks before entering the market
💡Core: Contracts are a 'counter-intuitive' game; discipline > skill, being able to control your actions is more important than knowing how to read K-lines
### 🚨Ultimate survival rule
❌Don't believe in the 'myth of getting rich through contracts'! 95% of retail investors get liquidated within 3 months, the remaining 5% earn small profits through 'strict position management + ironclad stop-loss'
✅Correct positioning: Treat contracts as 'spot hedging tools' (for example, if you hold 1BTC, open a 10x short position to protect profits when it drops 5%)
💬Remember: Spot trading earns 'time money', contract trading earns 'fluctuation money'; novices should practice spot trading for 1 year before touching contracts!
$BTC
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