How to control contract risk?
Share a few basic concepts!
Most people understand that 9 times out of 10 you bet, you will lose. If you open a high leverage and pull it up every time, even if you fix the amount every time, one pin can make you liquidate!!
When can I open a higher leverage, such as above 20?
Leverage actually depends on the size of your assets
Suppose you want to earn 100u, is it easier to earn 1% of 10,000u or 10% of 1,000u?
Some experienced investors may think this is nonsense and they all know what Tadakatsu Honda means.
But what many people don’t know is that trading systems can be divided into two types, one is [technical system] and the other is [mental system]
The technical system is that most traders have learned a lot of technical indicators, naked K trading, turtle breakthroughs, K-line patterns, etc.....
Although your skills are strong, your mind is a factor that affects your decision-making!
Assume that the current pie is 80,000, and your strategy has sent out a long order entry signal at the moment, but your brain tells you that this is very dangerous, so you will have questions about this signal.
When the price continues to rise and reaches 90,000, your strategy shows a signal to close a long position. At this time, your mental system may tell you that it is likely to continue to rise, so you try a long position and the result starts to go back!
This is just a simple assumption and a problem encountered by many people ~
But if you cannot combine these two systems for a long time, the overall performance may decline or even end up losing money.
for example
Scenario 1: Starting from 80,000, your strategy has already issued a multi-order entry signal, but you hesitated to enter the market. When the subsequent price reaches 90,000, you have lost 10,000 points of profit.
Situation 2: The signal to close the position has already appeared at 90,000, but you want to enter the market and go long at this time, and the correction starts to turn into a loss.
If this keeps happening and can't be improved, you won't be able to sustainably make money in the long run.
Risks can be filtered or reduced in several ways
Don’t enter the market if the risk-reward ratio is not good
If your form is not good, don’t enter the market
Don’t enter the market when there is a conflict between mind and technology
If you miss the strategic entry signal, you will not enter the market and wait for the next signal.
Many successful investment gurus can create considerable profits by just using two or three indicators.
The main thing is that they can strictly observe discipline, abide by their own trading logic, and formulate their own entry SOP without any doubts!
Be a fast, ruthless and accurate hunter and wait for the rabbit.
I wish everyone can achieve financial freedom in this bull market!
