Is trading contracts a must? These 8 bottom lines must be solidified in your mind:
1. Accepting stop-loss is the norm; if you lose two trades in a row, you must stop trading that day.
Contracts are essentially a game of 'small bets for big returns'; a single loss does not equal the end of the world. But the mindset after a stop-loss is crucial: some rush to make back losses by trading frantically, resulting in deeper losses; others immediately stop to review, which allows them to brake in time. Remember, those who bet against the market will ultimately be taught a lesson by the market.
2. Refuse the myth of 'doubling in three days'; slow is fast.
Just lost one trade and want to heavily invest to recover? There's a 90% chance of liquidation. Trading most despises 'eagerness for quick success'; it’s like running a red light while driving, occasional luck does not mean long-term safety. Be steady; even if you only gain 3% a day, it accumulates far better than reckless trading.
3. If you don't understand the trend, don't act; those who follow the trend prosper.
The market is rising unilaterally but you want to short it, 'guessing the top'; it keeps falling but you insist on bottom fishing, 'picking up bargains' — this is not confidence, it's head-on confrontation with the market. Trends are like floods rushing down; going against the trend is like standing on the crest of a wave holding wood — being flipped is only a matter of time. Enter the market only when signals are clear; there's no shame in that.
4. Calculate the risk-reward ratio before opening a position; this is a lifesaving math problem.
You can earn a maximum of 100U on a trade, but you could lose 200U? No matter how tempting, don't touch it. You must at least achieve a 'gain of 2 can accept a loss of 1' ratio for it to be worth it. Don't always fantasize about 'what if I make a profit'; the 'what if' in contracts often leans towards losses.
5. New traders die from being 'too diligent'; experienced traders win by 'being lazy.'
The market moves and you want to place an order; opening seven or eight trades in a day seems like seizing opportunities, but in reality, you are just paying fees to the exchange. Remember: 90% of market fluctuations are 'noise'; the opportunities to make big money may only come once or twice a week. Resist the urge to trade; it’s better than anything else.
6. Only earn money within your knowledge; don't join markets you are not familiar with.
Some profit through MACD, others eat by trend lines; there’s no need to envy others catching limit-ups — that’s their cognitive range. If your understanding hasn't reached that level, blindly following trends will only lead to losses. Perfect your familiar patterns; that is the true path.
7. Holding onto positions is the trigger for liquidation; don't 'fall in love' with your trades.
Always thinking 'wait a bit longer to break even,' but end up going from a 5% loss to a 50% loss, finally being forcefully liquidated. The stop-loss line is not a decoration; it’s your exit strategy. When it hits, cut it; don’t hesitate.
8. When making profits, don't get carried away; getting carried away leads to pitfalls.
After making a few trades, you feel like 'you are a master,' start to increase your position size, change strategies randomly, even stay up late to gamble on the market — at this time, the market often gives you a slap. When you make money, you need to maintain discipline; the moment you start to 'float,' is the beginning of losses.
Ultimately, trading contracts is not about technology, but mindset and discipline. Review these 8 points before opening a position every day; they can help you avoid 80% of pitfalls.
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