1. Avoid going all in

How should funds be allocated? Fund allocation should be understood from two perspectives: first, from a risk perspective, we must clarify how much loss our account can or is prepared to endure. This is the foundational thought for our fund allocation. Once this total is determined, we consider how many times we would need to lose to the market if we continuously make mistakes, in order to willingly accept our bad luck and admit defeat. Personally, I believe the most risky method should be divided into three parts. In other words, you should give yourself at least three chances. For example, if the total account funds are 200,000, and the maximum allowable loss is 20%, that is 40,000, then I suggest the most aggressive loss plan is: 10,000 for the first time, 10,000 for the second time, and 20,000 for the third time. I believe this loss plan has a certain level of rationality. Because if you get one right 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 there is a chance to win.

2. Grasp the overall market trend

Trends are much harder to trade than fluctuations because trends involve chasing highs and cutting losses, requiring discipline in holding positions, while buying high and selling low aligns more with human nature.

Trading is about how much it aligns with human nature; the less it aligns, the more money can be made. It is precisely because it is difficult that it is profitable.

In an upward trend, every violent pullback should be an opportunity to go long. Remember what I said about probability? So, if you are not on the train or have gotten off, wait patiently. If a 10-20% drop occurs, go long boldly.

3. Set take profit and stop loss

The target for take profit and stop loss can be said to be the key to whether one can make a profit. In several trades, we need to ensure that total profit is greater than total loss. Achieving this isn't difficult; just do the following points: ①

Each stop loss ≤ 5% of total funds; ② Each profit > 5% of total funds; ③ Total trading win rate > 50%

Meet the above criteria

Requirements (profit-loss ratio greater than 1 and win rate greater than 50%) can achieve profitability. Of course, there 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, it is fine. Total profit = initial capital x (average profit x win rate - average loss x loss rate).

4. Remember not to trade too frequently

Since BTC perpetual contracts are traded continuously 24 hours a day, many beginners operate daily. With 22 trading days in a month, they might trade almost every day. As the saying goes: if you walk by the river often, how can you avoid getting your shoes wet? The more you operate, the more likely you are to make mistakes. After a mistake, your mindset can deteriorate, and a bad mindset may lead to emotional decisions, such as 'revenge' trading: possibly going against the trend or heavily investing. This can result in a series of mistakes, easily causing significant losses on paper, which can take years to recover from.#BTC上攻11万？ #币安Alpha第7批项目公布 $BTC $ETH