‍

Recently, I’ve clearly felt that more and more newcomers are entering the crypto market, and the number of novice contract traders is also increasing. As someone who often streams live, I can feel this very clearly—many newcomers ask me basic questions. Today, I will systematically explain how contract trading beginners can improve their winning rate and build their own trading system. I’ve divided this advanced method into five steps. The first step is the most important, and it’s also the focus of this article—how to survive. The main content is divided into two parts: the first is take profit and stop loss, and the second is position management. I believe 99% of people trading contracts are in it to make money, but when they actually start trading, they find that they haven’t made any profit, and in fact, they’ve lost quite a bit. Some even get liquidated multiple times. Learning and implementing this trading method will prevent you from getting liquidated again, and it will greatly reduce the probability of losses.

一、Take Profit and Stop Loss
This must be set for every trade. Remember, it must be set every single time!!! It can significantly reduce profit retracement or prevent early stop loss from causing missed profits, and it can also prevent liquidation.

About Stop Loss:
Strict rule: Always set a stop loss when opening a position! Just like you must bring toilet paper to the bathroom, or wear a seatbelt when driving—it's essential.
Purpose: To prevent liquidation (the biggest role), and to reduce losses from wrong directional bets.

Tips:
Fixed Stop Loss: Set a fixed stop loss range, which can be related to your position management. The downside is that it might hit your stop loss and then the market moves back, because a fixed range might cross zones.
Technical Stop Loss: Set stop loss points at key support/resistance levels. When you can clearly identify support and resistance, this is the best method—avoid using fixed stop loss.
Break-even Stop Loss: After a trade has profit and you reduce your position, you can set this to ensure no loss occurs.
Trailing Stop Loss: This is an advanced version of break-even stop loss. When your trade starts to profit, you can raise your stop loss above the cost basis.

About Take Profit:
Purpose: To prevent profit from being given back, which could lead to losses.
Tips:
Fixed Take Profit: Set a fixed take profit range.
Technical Take Profit: Set take profit at key resistance/support levels. Similar to stop loss, it’s best to take partial profits at a zone of support/resistance, then consider the overall market pattern.
Partial Take Profit: Reduce your position by half at your initial take profit level. When reaching the take profit point, you can also leave some position to continue to ride the trend.

二、Position Management
Once you’ve learned when to take profit and stop loss, the next step is to learn how much to buy. But first, remember one thing: never go all-in, never ever go all-in.

Position:
To manage your position, you first need to understand what a position is. In live streams, people often ask me how many times leverage to open, or how much USDT to use. But position isn’t just leverage times the opening amount; position = opening amount × leverage. What we need to manage is this position. If you are a short-term trader, use higher leverage and smaller opening funds. If you are a long-term trader, use lower leverage and larger opening funds. The size of your position ultimately depends on your trading style. Some people prefer aggressive trading, but always remember not to go all-in with high leverage! The risk is too high. Beginners should stick to conservative trading.

Management:
To manage your position, I usually use a reverse calculation method to determine how much to trade. That is, use your planned maximum loss amount to back-calculate your total position size. For example, if you have 1000 USDT, then most of the time, your maximum loss should not exceed 100 USDT(. I think this position size is a bit conservative (depending on your risk tolerance). Occasionally, when you are heavily leveraged, it can be exceeded. Example: ETH long position opened at 3000, with a stop loss at 2940. With 1000 USDT in contract funds, your total position size should be around 2500 USDT, which is equivalent to opening a $ETH .

That’s roughly the content of this article. Later, I will explain how to find support and resistance levels, combined with technical take profit and stop loss, so that your trading career will avoid liquidation and your profits will continue to grow.
‍#深度创作营