The most stable way to trade contracts in the crypto world needs to consider multiple factors; here are some key points:
Risk control aspect
Strictly control position size: No single position should exceed 10% of account funds. No matter how optimistic you are about a particular cryptocurrency, do not invest all your funds. For example, if you have 100,000 in capital, the maximum position for a single trade is 10,000, keeping the remaining funds for emergencies. Also, conduct divided position operations to spread risk. Don't just focus on Bitcoin or Ethereum; choose 2-3 different types of cryptocurrencies to share the risk.
Reasonably set leverage: For mainstream coins like Bitcoin and Ethereum, which have lower volatility, a leverage of 5-10 times is suitable for stable operation. If the system has a high win rate, you can try light leverage under 20 times with a reasonable risk-reward ratio. For altcoins, which are inherently volatile, do not add high leverage. If a cryptocurrency can achieve a daily fluctuation of 15%-20%, 3-5 times leverage is sufficient for profit.
Set stop-loss and take-profit: Set the stop-loss line at 5%-10%. If a single trade loses 5%-10% of account funds, close the position decisively without delay. Set the take-profit target at 15%-20%; take profits when expected returns are achieved, and do not expect to capture the entire trend. Additionally, you can combine support and resistance levels or indicators like RSI to set reasonable stop-loss and take-profit points, avoiding emotional trading.
Trading strategy aspect
Follow the trend: Use moving averages to determine trends. Look at the 20-day and 50-day moving averages on the daily chart. If the price is above the moving average, it indicates a bullish trend, and you should prioritize going long. If it's below, it indicates a bearish trend, and you should prioritize going short. Wait for confirmation signals; do not rush in, wait for K-line to break through key points or show clear trend signals before acting. Use smaller timeframes to assist larger ones, confirming short-term trends with 1-hour or 4-hour K-lines, but always prioritize the daily trend to avoid being misled by short-term fluctuations.
Low leverage + 4-position layout: Low leverage, such as 2-4 times, allows for a buffer against volatility, preventing full loss from a single misjudgment. Use a 4-segment position layout, with each segment being 25%, meaning the total capital is divided into 4 parts, building positions gradually according to different price ranges. Start with an initial position of 25%, add another 25% as the trend develops, add another 25% as the market continues to rise, and add the final 25% once the strongest momentum is confirmed.
Mindset and discipline aspect
Stay calm: Contract trading is not only a battle of skills but also a psychological game. Stay calm, refuse FOMO (fear of missing out), strictly execute your strategy, and you will survive longer in the crypto market.
Stick to discipline: Do not be swayed by emotions, do not violate your trading plan, and adhere to the rules. For example, strictly operate according to the set stop-loss and take-profit points, do not change them arbitrarily, do not gloat over profits from a single violation, and do not feel regret for missing out due to discipline.
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