Before answering this question, let me briefly explain what a perpetual contract is. A perpetual contract, as the name suggests, is a contract that is permanently renewed. In the current digital currency derivatives trading market, perpetual contracts are considered a relatively new type of contract. The meaning of a perpetual contract is that, under the premise of not being liquidated, if you do not actively close your position, you can hold this contract indefinitely. So, how much leverage is reasonable when trading? Someone asked me this question yesterday, and I thought I would share it today.
Yesterday, I communicated with a friend in the crypto space, and he usually trades with 50x leverage or 30x leverage. Taking Bitcoin as an example, 30x leverage requires 16 USDT, 50x leverage requires 10 USDT, and 100x leverage requires 5 USDT. Under the same market conditions, my personal suggestion is to only use 100x leverage. Why? Because once you start trading with leverage, whether it's 1x or 100x, you are carrying the risk of leverage. The profits generated with 1x leverage and 100x leverage are worlds apart under the same market conditions. Some people might say that 1x leverage has less risk, and that is correct in terms of risk. For Bitcoin, if you're using 1x leverage, currently one contract requires over 470 USDT. Without a significant price increase, you will definitely incur losses because of the transaction fees. Even if there isn’t a significant increase, even if you profit, the profit won't be much. What I'm trying to express is that since you've chosen to engage in leveraged contracts, you should maximize the use of that leverage by only using 100x leverage.
In many cases, what happens is that people use thin funds to engage in contracts that do not match their current capital. With little margin, they cannot support the current market, which may lead to being pulled back and forth in the market, and in a market with slightly larger fluctuations, they can get liquidated. Later, when a profitable market comes, it has nothing to do with you, and the contracts you hold become invalid. Therefore, when dealing with perpetual contracts, under permissible conditions, we should prepare our margin adequately, as it is better to be prepared than to be caught off guard. No matter what investment you make, there are risks involved. What we need to do is minimize the risks first and then look at the profits. Holding onto losing positions is a major taboo in contract trading; cutting losses in a timely manner is essential.
Timely cutting losses, combined with the position-by-position approach and the methods I wrote about in my previous article, can minimize risks without joking with your own capital. Set a daily target for yourself, and once you achieve it, take the profit; trading contracts can become very simple. Friends who have been in contracts for a long time know that if you have 5000 USDT as capital, making a profit of 50-100 USDT daily is quite simple. Adding some methods makes it even easier. Earning 50-100 USDT a day means you could make 1500-3000 USDT in a month! Of course, in actual operations, you might encounter major market fluctuations or various unexpected events. Averaging it out, in a 30-day month, as long as you meet your daily target for 20 days, you will still make a profit. I hope this information is helpful to my fellow crypto enthusiasts.#NFT板块领涨 $BTC
