How to trade contracts?
First, contracts are like gambling! There are no technical aspects to speak of; if you can't manipulate the market with capital, you are just fodder! All contract traders*, for short-term trading either you have a large capital with low leverage operations*, or you have a small capital and play with high leverage. According to data and market fluctuations from several platforms, the vast majority of people are operating with small capital and high leverage. Because most people want to profit greatly with little investment.
Thus, here are some practical insights for short-term contract* traders using high leverage.
1. You can only do swing trading with contracts; if you get trapped in long-term positions, you won't be able to handle the psychological pressure and will eventually have to stop-loss at the brink of liquidation because you don’t have enough margin*.
2. Do not be greedy in short-term trading; even if you are right about the trend, insufficient margin will cause you to collapse or stop-loss due to price fluctuations. Aim for a return of only 5% in a swing trade.
3. If you can consistently guarantee a 5% return on each trade, you can do nothing at all.
4. If you make 5% every day, that’s 150% a month. Time + compound interest = great wealth. 5. Learn to stay in cash*, waiting for opportunities, rather than getting trapped and waiting to break even or reverse.
6. Think more, are you more often stepping into thin air or getting trapped?
