1. The most stable strategy in the cryptocurrency contract market: choose good coins and be a good person.
As a leveraged trader, volatility can be amplified by leverage, but the primary consideration during trading should be certainty, not volatility.
In a rising market, go long on strong coins; conversely, in a falling market, short the weakest coins. For example, at the beginning of a new quarter, the strongest performers are EOS and ETH; for pullbacks, these two coins are the preferred choices. When the market is down, the first choice for shorting is Bitcoin. Even if the final result shows that mainstream coins fall more than Bitcoin, shorting or chasing Bitcoin can significantly reduce the risk of violent rebounds. Most cryptocurrency market participants are short-term traders; it is challenging to hold out for ideal exit points and not proficient in position control, nor can they rely on fluctuations to average down. Under such circumstances, for most traders, a good entry price outweighs everything. Once in profit, take some off the table; secure some profits, and set the stop-loss at the cost price for the remaining part.
(1) Identify the main trend and trade in the direction of the main trend; otherwise, do not enter the market.
(2) If you are trading with the trend, entry points: 1. A new breakout point of the trend; 2. A breakout point in a consolidation phase trending in a certain direction; 3. A pullback point in an uptrend or a rebound point in a downtrend.
(3) Following the trend will bring you substantial profits; never get off the train too early.
(4) If the position aligns with the overall trend, and the paper profit E proves you are correct, you can use a pyramiding technique for adding positions (refer to Part 2).
(5) Maintain your position until the trend reverses and close the position.
(6) If the market trend is against your position, cut losses and run.
In addition to adhering to the above strategies, remember three qualities: discipline, discipline, and discipline! The way of trading is to accumulate small amounts into large ones; compound interest is king. If you stray from your cost, you must resolutely avoid turning back into a loss. If you are in profit, you must take a portion to prevent it from being in vain. In summary: be bold when in profit, but protect the remaining capital.
2. Tips for making money with perpetual contracts.
1. Avoid full allocation.
How should capital be allocated? Capital allocation should be understood from two levels.
Firstly, from a risk perspective, understand how much loss your account can or is prepared to withstand. This is the basis for our capital allocation thinking. After determining this total, consider how many times you can afford to lose to the market before you willingly accept the loss.
I personally believe that the riskiest method should be divided into three attempts. That is, you should at least give yourself three chances. For example, if the total account amount is 200,000, the client allows a maximum loss of 20%, which is 40,000; I suggest the most risky loss plan to be: the first loss 10,000, the second loss 10,000, the third loss 20,000. I believe this loss plan still has a certain degree of reasonableness. Because if you succeed once in three attempts, you can profit or continue to survive in the market. Not being kicked out of the market is itself a success and provides an opportunity to win.
2. Grasp the overall market trend.
Trends are much harder to trade than fluctuations because trends involve chasing highs and cutting losses, requiring strong conviction in holding positions, while buying high and selling low aligns well with human nature.
Trading is about not making money the more it aligns with human nature; it is precisely because it is difficult that it is profitable.
In an upward trend, any violent pullback should be met with a buy. Do you remember what I said about probabilities? So if you're not in the trade or have exited, wait patiently for a 10-20% drop, and then buy boldly.
3. Establish profit-taking and stop-loss targets.
Setting profit-taking and stop-loss levels can be said to be the key to whether one can make a profit; in several trades, we must ensure that total profits exceed total losses. Achieving this is not difficult, just do the following:
① Each stop loss ≤ 5% of total capital;
② Each profit > 5% of total capital;
③ Total trading win rate > 50% meets the above requirements (profit-loss ratio greater than 1 and win rate greater than 50%) to achieve profitability. Of course, it can also be a high profit-loss ratio with a low win rate, or a low profit-loss ratio with a high win rate. Anyway, as long as total profits are positive, it is fine; total profits = initial capital x (average profit x win rate - average loss x loss rate).
4. Remember to avoid excessive trading.
Since BTC perpetual contracts trade 24/7, many beginners trade every day, trying to trade on all 22 trading days of a month. As the saying goes: if you walk by the river often, how can you not get your shoes wet? Trading too frequently will lead to mistakes, and after a mistake, the mindset can deteriorate. A bad mindset may lead to impulsive 'revenge' trading: possibly against the trend or over-leveraging. This can lead to one mistake after another, potentially causing huge losses that may take years to recover.#币安Alpha上新 #加密市场回调 #BTC #ETH #合约交易