Newbies and novices playing perpetual contracts to make money should remember the following points, which are enough to help you survive in the market.

1. Avoid full-margin aggressive trading

How should funds be allocated? Fund allocation should be understood from two levels:

Firstly, from the risk perspective, clearly define how much loss our account can or is prepared to bear. This is the foundational thought for our fund allocation. Once this total amount is determined, consider how, if we continuously make mistakes in the market, we can afford to lose the least amount to the market over several trades, so that we can willingly accept our misfortune and acknowledge failure.

In my opinion: the most risky method should also be divided into three parts. In other words, you should at least give yourself three chances. For example, if the total account capital is 200,000, and the client allows you to lose up to 20%, which is 40,000, then I suggest your most aggressive loss plan should be: first loss 10,000, second loss 10,000, third loss 20,000. I believe this loss plan has a certain rationale. Because if you have one correct decision out of three, you can profit or continue to survive in the market. Not being kicked out of the market itself is a success and opens up opportunities to win.

2. Grasp the overall trend of the market

Trends are much harder to navigate than fluctuations because trends involve chasing highs and cutting losses, requiring the strength to hold positions, while high selling and low buying align well with human nature.

3. Set profit and loss targets

Setting profit and loss targets can be said to be the key to whether one can profit. In several transactions, we need to ensure that total profits exceed total losses. Achieving this is not difficult; just follow these points:

1. Each loss ≤ 5% of total funds;

2. Each profit > 5% of total funds;

3. Total trading win rate > 50%

If the above requirements are met (profit-loss ratio greater than 1 and win rate greater than 50%), profitability can be achieved. Of course, it can also be a high profit-loss ratio with a low win rate, or a low profit-loss ratio with a high win rate. Anyway, as long as the total profit is positive, that’s sufficient; total profit = initial capital x (average profit x win rate - average loss x loss rate).

4. Remember to avoid excessively frequent trading

Due to BTC perpetual contracts being traded continuously 24 hours a day, many novices trade every day, with 22 trading days a month, practically trading every day. As the saying goes: those who walk by the river often get their shoes wet.