Can beginners play contracts without losing money?
It is basically impossible to avoid losing money; one can only aim for small losses and big gains. Below are my personal summaries of methods to avoid significant trading losses, hoping to help novice friends.
First, going against the trend.
Going against the trend is the most common problem for novice traders, stemming from poor grasp of points and stop-loss, as well as a poor mindset. Going against the trend involves bottom fishing and top picking, which is a method with a low win rate but a high risk-reward ratio. Because of the low win rate, one must not hold onto losing positions and should stop-loss promptly. Once a position is caught, many people cannot hold on, getting off at the slightest fluctuation, which results in a low win rate and low risk-reward ratio. The mindset and skills are vastly different, contradicting the original intention of bottom fishing and top picking.
Second, going with the trend with heavy positions, unclear points.
In my view, heavy positions only have two key points, three buys and three sells, which are the definitive points of trend reversal. Any technical points within the trend are mere trifles and only suitable for light positions, as the magnitude of pullbacks and rebounds within the trend is relatively large. If heavy positions stop-loss, the market is likely to return to the opening point. Therefore, after the trend has moved for some time, one should trade with the trend, using only 1/3 of the usual position size. If you can make a little profit, then do so; if you can't, then let it go.
Third, transaction fees.
Transaction fees are the easiest source of losses to overlook; they are often unnoticed in the shadows. For example, in contract trading, the fee for taking a position is 0.05% and for placing an order is 0.02%. Typically, in contract trading, taking a position incurs more fees. Even if we consider one opening and one closing as one taking and one placing, the fee from opening to closing a position is 0.07%. If you open with 1000u at 10x leverage, the position value is 10000u, so the transaction fee from opening and closing is 7u. With 1000u, you lose 7u per trade, which only allows for 142 trades; the fees would wipe out the capital. This is still a conservative estimate. If all trades are taking positions, then with 1000u fully leveraged at 10x, you can only make 100 trades, and at 20x, only 50 trades. This means that regardless of how much capital you have, at 10x leverage, you can only make 100 trades before your capital is lost; at 20x leverage, only 50 trades.
Friends who are currently confused and directionless in trading, leave a comment with '1', and this bull market will help you get rich.
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