After a pin strike, the whole army was wiped out? Real contract players understand this

Bitget App

Trade smarter

Bugsbunny—e/acc2024/12/10 07:10

By:Bugsbunny—e/acc

This time, we can predict that a large number of contract players' assets will go to zero, but in fact, we could have avoided this situation.

At the beginning, repeat the sentence "Most people do not have the ability to open contracts, only the courage to do so." This kind of courage is a manifestation of ignoring market risks.

Conclusion at the beginning:

I. bull market how long the needle, the needle will often completely clear the opponent's plate (counterfeit products more than 2 times clean)

II. The stop-loss of full-position high-leverage contracts may not be triggered. Simply put, when the market crashes, there are not enough counterparties to help you stop loss, resulting in slippage and even failure to trigger stop loss.

III. The market makers in the crypto world will relax the opening before inserting the needle to reduce liquidity. When the selling orders cannot obtain liquidity, the phenomenon of inserting the needle will occur.

How should we open contracts in a healthy way?

1. It is necessary to recognize the difference between full position and one position contract, and clearly recognize the latent risk, and do a good job in risk management and positioning management.

2. Clearly understand the risks of extreme market conditions

You need to realize that in extreme market conditions, stop loss may not be triggered. Simply put, there is no opponent in the market to help you stop loss, which means you may face slippage or even complete stop loss failure.

3. Unity of knowledge and action

I often remind myself that before opening a contract, I must be clear about where the risk of a trade is and where the stop loss should be placed.

When you feel that a certain transaction is not right, losses should be accepted instead of using margin to resist. Don't try to beautify your behavior as a "Martin strategy".

How to hold contracts with low risk?

1. Clearly define stop-loss points and use position-by-position leverage

When trading, find your stop-loss position and use position-by-position leverage for trading. The advantage of position-by-position leverage is that the amount of margin you bet is the same, and you will not lose more than the account balance due to extreme market conditions.

Warning: Exchanges generally default to full position leverage, which can prevent liquidation under normal circumstances, but in extreme market conditions, it may devour your principal.

The setting of stop loss is very important. Everyone can set stop loss according to their own habits and methods. The important thing is to achieve scientific stop loss.

Why is full position risky?

1. Stop loss cannot be triggered in extreme market conditions

When the market fluctuates violently, there may be no opponent to provide you with a stop loss, causing you to bear excessive losses. In the full position mode, your margin is all the margin of the contract account, so in the case of a wrong order, there will be a loss of more than -100%.

2. It will naturally develop the habit of carrying orders

Full position trading can easily lead to the habit of "adding positions and holding positions". Don't think this is a "Martin strategy". Opening contracts without prior planning is the wrong behavior.

3. Admit that you will make mistakes

No one can guarantee that they will never make mistakes. Incorporating "mistakes" into the trading system is what makes a truly mature trader.

4. There are many risk factors in the currency circle

From geopolitics, war, government holdings, regulatory changes, to FOMO, hacking incidents, etc., any external factor can affect the market's violent fluctuations.

The benefits of position-by-position contracts

1. Ensure that risks are manageable

In a position-by-position contract, the margin you bet each time is the maximum risk you bear. Even if you open the wrong order, you will not further expand your losses by adding positions without monitoring the market.

2. Extreme market conditions

Even if the stop loss is not triggered, your loss is limited to the margin and will not exceed the account balance.

3. Clearly define leverage and stop loss

When setting stop-loss levels, you can accurately calculate leverage to avoid unnecessary risks caused by default high leverage. High leverage means high costs and requires cautious operation.

Summary: The core experience of position-by-position contracts is that the purpose of setting stop-loss is to prevent liquidation, not to stop loss at any time. This is the most important experience in my trading system.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.

APR up to 10%. Always on, always get airdrop.

Lock now!