How many times should we reasonably open a perpetual contract $COS !

Before answering this question, let me briefly explain what a perpetual contract is. A contract, as its name suggests, is a contract with a permanent renewal period. In the current digital currency derivatives trading market, perpetual contracts are considered a relatively new type of contract. The meaning of perpetual contract is that, under the premise of not being liquidated, if you do not actively close the position, you can hold this contract indefinitely. So how many times is reasonable when operating? Someone asked me this question, so today I will talk about it.

Yesterday, I communicated with a friend who usually uses 50x leverage or 30x leverage. Taking Bitcoin as an example, 30x leverage requires 16 USDT, 50x leverage requires 10 USDT, and 100x requires 5 USDT. Under the same market conditions, my personal suggestion is to only use 100x leverage. Why? Because once you open leverage for a contract, whether it’s 1x or 100x, it carries leverage risk. Under the same market conditions, the returns from 1x leverage and 100x leverage are vastly different. Some people might say that 1x leverage has less risk, which is true, but taking Bitcoin as an example, if you use 1x leverage, currently one contract costs over 470 USDT, and without a significant price increase, you are definitely at a loss due to the transaction fees. Furthermore, even if there is some profit without a large price increase, it won't be much. What I want to express is that since you chose to engage in leveraged contracts, you should maximize the use of that leverage.

In many cases, people use thin funds to engage in contracts that do not match their current capital, where insufficient margin cannot support the current market, which may lead to being liquidated in a slightly more volatile market. When a profitable market comes later, it has nothing to do with you. At this time, the contracts we hold become invalid. Therefore, when engaging in perpetual contracts, we should appropriately prepare more margin as long as conditions permit. No matter what investment we undertake, there is risk involved. What we should do is to minimize the risk and then look at the benefits. Holding onto losing positions is a big taboo in contracts; it is very necessary to cut losses in a timely manner.

Having said so much, I hope it helps you #我的COS交易