If you must trade contracts, keep the following points in mind!!
If you must trade contracts, keep the following points in mind! It's crucial!
1. Trading contracts is about risking a little for a lot; incurring losses is normal. However, after a stop-loss, two types of people emerge: some will go crazy opening orders after a stop-loss, while others will enter a cooling-off period.
My suggestion is that if you encounter frequent stop-loss situations, you should calm down, temporarily stop trading, and adjust your strategy.
2. Don't rush for success; trading is not a means to get rich overnight. When you incur losses in trading, maintain a calm mindset, do not rush to open orders, and definitely do not go all-in with heavy positions.
3. It's important to recognize the big trend. When you see a one-sided market through the charts, go with the trend; do not trade against it. Trading against the trend is the source of losses. Whether you are a newbie or an experienced trader, there is a habit of trading against the trend. However, once the market trend is established, going against it often leads to severe lessons from the market. Therefore, we must learn to go with the trend and patiently wait for opportunities to trade.
4. You must manage your risk-reward ratio well; otherwise, it will be hard to make money. Ensure that your profits are greater than your losses, with at least a 2:1 ratio before considering opening a position.
5. Frequent trading is a major taboo in contracts. If you are not a contract expert, you must restrain the impulse to open orders blindly, especially for newbie players who are filled with enthusiasm for the market and always want to seize every opportunity. However, most so-called opportunities will lead to losses.
6. Only make money within your understanding; this is very important.
7. Do not hold positions; holding positions in contracts is a major taboo, especially for newcomers. You must set stop-losses; holding positions is the beginning of a downward spiral. Once again, I remind you not to hold positions.
8. Don't get carried away when making profits; getting carried away will lead to losses.