3. Set your "take profit and stop loss" in advance and strictly execute it.
- Stop loss: Before opening a position, determine "the maximum loss I can accept", for example, set an automatic liquidation when the price drops by 3%-5% (adjust according to the volatility of the asset; BTC/ETH can be slightly wider, while small tokens need stricter limits). Never hold a position (fantasizing about a rebound during a downturn often leads to greater losses).
- Take profit: When the expected profit is reached (for instance, 5%-10%), partially or fully liquidate to secure profits and avoid "profit giving back" or even turning profits into losses.
Discipline is the lifeline of contract trading; acting on emotions = giving away money.
4. Only trade "familiar assets" and "clear trends"
- Prioritize mainstream coins with high liquidity and relatively controllable volatility, such as BTC and ETH. Small tokens (low market cap, low trading volume) are prone to manipulation, have larger slippage, and carry a higher risk of liquidation.
- When the trend is unclear (sideways movement), try to avoid trading, and only attempt during clear upward/downward trends, ensuring that your direction is consistent with the trend (don’t guess tops and bottoms against the trend; you are likely to be proven wrong by the market).
3. Advanced reminders: Cognition and mindset management
- Accept that "losses are normal": The essence of contracts is a probability game; no one can be 100% correct. Be mentally prepared for "this trade might lose" before each transaction, and do not let a single loss affect subsequent decisions.
- Avoid frequent trading: Frequent opening and closing of positions can lead to accumulated fees and disrupt rhythm due to "overtrading". It is advisable to limit daily trades to no more than 3 times.
- Review and summarize: After each trade, record the reasons, profits and losses, and whether the actions aligned with the plan, continually optimizing the strategy (but don’t expect a "perfect strategy"; the market is always changing).
4. The final harsh word
Behind the "profit myth" of cryptocurrency contracts lies the accumulation of funds from countless liquidated traders. Statistics show that over 80% of contract traders end up losing money, including cases of debt due to leverage. If you want to participate, first ask yourself: "Can I accept losing all my capital?" If the answer is no, withdraw immediately.
The core of investing is to "survive", not to take a gamble.
