Contract Trading: "Can You Profit from Both Up and Down Markets?" Remember Three Things: Positioning, Focus on One Side, Don't Be Greedy
1. Position Management: How to Use Your Money?
The core message is simple: Don't let yourself lose everything!
"Dividing Money" is More Important than "Making Money"
Suppose you have 100,000 yuan; don't invest it all at once. For example, only use 10,000-20,000 yuan to test the waters, keeping the rest for "safety."
Why? The market can suddenly reverse, and by keeping your money divided, you can maintain a stable mindset.
"How Much Can You Lose in a Single Trade?"
Think ahead: If this trade results in a loss, how much can you accept losing? For instance, a maximum loss of 2% of your total capital (2000 yuan for 100,000 yuan).
Benefits of This Approach: Even if you lose five times in a row, you only lose 10,000 yuan and can continue trading.
Open Positions in Batches, Don't Bet on Direction
For example, if you think the price will rise, don't go all in at once; start with a 30% position. If you're correct, add more; if you're wrong, cut your losses promptly.
Contract Feature: You can profit from both rising and falling markets, but don't bet on both sides! Go long if you expect a rise, go short if you expect a fall, but don't open positions in both directions (it can backfire).
Leverage is a "Double-Edged Sword"
Leverage can amplify profits, but losses can accumulate quickly. Beginners are advised not to use leverage, while experienced traders should use a maximum of 10%-20% of their total capital.
Negative Example: Using 10x leverage to go long, a 10% drop leads to liquidation, leaving no chance for recovery.
2. Trading Model: How to Make Money?
Core Logic: Find a simple strategy and repeat it!
Go Long or Go Short, Choose One Side
Going Long (Profit from Rising Prices): If you think the price will rise, buy low and sell high.
Going Short (Profit from Falling Prices): If you think the price will fall, borrow and sell high, then buy back at a lower price.
Key Point: Don't be greedy! Don't try to profit from both rising and falling prices; focus on one direction.
Set Fixed Rules, Don't Change Them Randomly
Establish your trading rules, such as:
Going Long: Stop loss at a 3% drop, reduce position by half at a 5% rise;
Going Short: Stop loss at a 3% rise, reduce position by half at a 5% drop;
Limit trading to a maximum of 2 times a day to avoid frequent operations.
Negative Example: Going long and then feeling regret when the price drops, switching to a short position, resulting in losses on both sides.
Only Take "High Certainty" Opportunities
The market fluctuates daily, but most of it is noise! For example:
After a sharp rise, don't chase the price; wait for a pullback to enter;
After a sharp drop, don't rush to short; wait for a weak rebound before acting.
Truth: Resist the urge to act, wait for opportunities you understand, and earn what you can.
Keep It Simple and Repeat, Don't Complicate Things
Ordinary people can make money using the simplest models, such as:
Buying when the price is consolidating at a support level (set a stop loss);
Selling when the price is stagnating at a resistance level (set a stop loss).
Don't Rely on "Miraculous Operations": The simpler the strategy, the easier it is to stick to.
3. Common Mistakes Made by Ordinary People
Increasing Position After Losses to Average Down
If you go long and the price drops, feeling unsatisfied, you keep adding to your position, resulting in greater losses; if you go short and the price rises, you stubbornly hold on without stopping losses, leading to liquidation.
Solution: Acknowledge your losses, stop loss, and calmly review your trades.
Frequent Trading, Getting Hit from Both Sides
Going long in the morning and short in the afternoon, trading fees and slippage eat into profits, and it disrupts your mindset.
Truth: 1-2 trades a day are sufficient; quality is more important than quantity!
Taking Small Profits Quickly, Holding on to Losses
If you make a 3% profit and exit, you miss out on a 30% rise; if you lose 10% and still hope to break even, you end up liquidated.
Solution: Let profits run when you're winning, and cut losses quickly when you're losing.
4. Summary: Remember the Key Points in One Sentence
Position Management: Use a "small portion" of your total capital to test the waters, with a maximum loss of 2% per trade, and use leverage cautiously!
Trading Model: You can profit from both rising and falling markets, but only focus on one side! Establish a simple strategy (like going long at support + stop loss) and repeat it!
Mindset: Acknowledge losses, stay grounded when you profit, and resist the urge to act impulsively to survive longer!
Finally: Contracts are like seesaws; there are opportunities in both rising and falling markets, but you need to sit on the right side and not get thrown off!
This article is exclusively planned and published by Bit Bear (WeChat: Bit Bear). For more real-time investment strategies, solutions, spot trading, short, medium, and long-term contract trading techniques, operational skills, and knowledge about candlesticks, you can join Bit Bear for learning and communication. Fans can join the free experience group for all-day real-time strategy sharing!
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