Contracts are not scary; find the bottom to build positions. Before building positions, be sure to calculate the stop-loss level and how much loss you can bear. If you're right, hold it; if you're wrong, cut losses and repeat.
We are speculators, not gamblers.
Next, let's discuss the seven taboos of contract trading.
1. Position holding syndrome. This is a common ailment among investors, with "symptoms" such as: when there are no positions, feeling restless and needing to place orders; when there are positions, feeling panic, not knowing what to do once the market moves in the opposite direction; believing opportunities are endless, always wanting to operate, resulting in greater losses the more they trade. 2. Frequent "all-weather" trading. Many investors want to be all-rounders, going long after finishing short and vice versa. Although they set strict demands on themselves, this goes against the importance of following the market trend. When one force does not break another, do not entertain the thought of trading against the trend; in a bull market, go long, close longs, then go long again... In a bear market, stick to shorting, closing shorts, then shorting again, then closing shorts again...
3. Can you grab a rebound against the trend? If the method is correct, of course you can. Otherwise, it’s like licking blood from a knife edge. If a knife is falling from the sky, when should you catch it? Without a doubt, you should wait until it lands and is still; otherwise, you will be badly hurt. Grabbing rebounds requires certain skills; inexperienced traders should not take risks, just follow the trend.
4. Hesitation when placing orders. When going long, fear of being lured into a long position and false breakouts; when going short, fear of being lured into a short position, leading to opportunities disappearing right in front of you. Understand the principle of inertia when a train starts moving. When the trend takes its first step, we should enter at one and a half steps until balance is broken. When the trend is established, adopt the strategy of "taking all orders"; when signs of a false breakout appear, the chances of success in the opposite direction are quite high.
5. Many investors must have such experiences with a strong mentality of following the main force: when you go long, it drops; when you go short, it rises; when you cut your long position, it still rises; when you cut your short position, it drops. Sometimes luck is very important in BTC trading; the main force doesn’t need your hand. Immediately turn off the computer ◇ take a break, and come back to trade calmly after cooling down.
6. Full position trading. While full position trading may quickly increase your wealth, it is more likely to lead to rapid liquidation. Nothing is absolute ◇ even funds cannot completely control the impact of sudden events, policies, or news. Never go all-in; each position should not exceed 30% of total capital, at most 50%, to guard against margin calls or other situations.
7. Never admit defeat. Many investors are stubborn; when they make a mistake, they never admit it. They do not resolve the wrong position at the first opportunity, leading to the continuation of mistakes with foreseeable consequences. "I just don’t believe it won’t rise; I just don’t believe it won’t fall..." This mindset must be avoided. When you admit you are wrong, do not harbor false hopes; decisively cut losses at the first opportunity.
