Before you enter the world of Futures, you must understand the game well. Because one wrong step can wipe out your wallet in seconds!
🔹 Leverage:
If you have $100 and use a x10 leverage, it's like trading with $1000.
A 1% profit gives you $10, but a 1% loss takes away $10.
This means gains and losses happen at the same speed; do not be reckless.
🔹 Liquidation:
If your balance does not cover the losses, the platform will forcibly close the trade.
Example: a $100 trade with x20 leverage, a 5% move against you is enough to liquidate the account.
🔹 Funding Rate:
Every 8 hours, traders pay each other according to the market direction.
If the whole market is long, long holders pay short holders, and vice versa.
🔹 Mark Price:
Liquidation does not occur at the price you see on the chart; it occurs at a price calculated by the platform from different exchanges.
This means your trade could be liquidated while the price hasn't even reached the point you expect.
🔹 Cross vs Isolated:
- First, Cross: uses all your balance as collateral; if the trade reverses, you lose the entire wallet.
- Second, Isolated: the trade is limited to the amount you entered only.
Start with Isolated if you are a beginner.
🔹 Capital Management:
Do not put all your money into a single trade.
The golden rule: do not risk more than 2-3% of your wallet on a single trade.
🔹 Emotions = Losses:
Greed increases leverage, fear closes the trade early, and revenge will lose you more.
Stick to the plan; do not follow your emotions.
💥 Futures contracts are a dangerous weapon: either you double your capital or lose everything!
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