Detailed Teaching of Contract Novices Introduction (Principles and Skills)

Many people have come into contact with the contract when they first entered the currency circle, but they only know how to buy and sell, but do not know how to operate it reasonably. And choose to go further and further on the road of gambling. I believe that reading the following article will give you a new understanding of contracts!

1. What is the contract:

Contract trading is a kind of derivatives trading. It is a standardized product based on digital currency developed by the currency circle with reference to traditional futures. It covers an agreement on price and trading subject. It is different from traditional futures. and perpetual contracts with no delivery date. Time contract is to carry out compulsory delivery and clearing when the agreed time expires, which is mainly a protective hedging function for spot risk exposure; while perpetual contract has no expiration and settlement date, similar to a margin spot market, which can be Its leverage function is to discover the future price of digital currency to obtain high returns.

2. The essence of contract transactions:

Since the price fluctuation of digital currency is larger than that of the traditional market, from the moment of its birth, the contract, like traditional futures, has the function of hedging risks and avoiding the sharp depreciation of spot assets, so it is first of all a risk-averse function. Secondly, due to the inherent leverage function of contract design, it also has the speculative function of small and large, and more participants use contracts as leverage to achieve a tool for small funds to achieve large funds, so secondly, it has a speculative nature.

3. The key to choosing a platform:

(1) Security : Different capital and technical teams are represented behind different exchanges. Examining its strength and stability is helpful for judging their ability to survive and resist risks. In history, some exchange assets were stolen by hackers, and investors were unable to pay losses due to the security construction behind them and the weak financial strength.

(2) Professionalism : Because contract trading is different from spot trading, many traders are frequent high-frequency trading, and there are also many programmatic quantitative transactions. The professional and user-friendly design of trading functions will bring great benefits to traders. benefits, and sometimes even the most important factor in your survival and profitability.

(3) Convenience : The function settings and operability of the exchange should be simple, fast deposit and withdrawal, timely service, and quick response. These are some of the factors that directly affect traders. Since digital currency transactions are 7*24 hours, 365 Trading all the time, investors all over the world, an exchange with quick response and in place services, the benefits to investors are obvious.

4. Three principles that need to be adhered to in contract transactions:

(1) For spot hedging investors, the main purpose is to avoid the depreciation risk of falling currency prices and use low margins to protect the demand. Therefore, when the trend is falling, the medium leverage equivalent coverage can be used to open orders. The stop loss can be placed at the trend reversal point.

(2) For speculative traders, the stop loss must be synchronized when opening an order, and the use of leverage should match the maximum bearable loss of each order.

(3) Regardless of hedging and speculation, billing is only carried out at positions with a high profit-loss ratio to reduce invalid operations and avoid high-frequency operations. The purpose is clear and the transaction is planned.

5. To achieve the ultimate goals and skills of contract transactions:

There are only two purposes for contract trading. One is for arbitrage and hedging. Anyone who plays spot should know. The second is that everyone's goal is to speculate and profit, and to realize the appreciation of wealth.

Arbitrage is relatively simple. It will only be traded at the inflection point of the trend. The number of operations per year is limited. The purpose is to keep assets from falling and depreciating.

And speculative profit is the original intention of most traders who participate in the contract. The purpose is to obtain high returns from small and large. The so-called high returns must be accompanied by high risks. Therefore, the most important thing is to reduce the risk as much as possible in speculation and maintain Controllable and sustainable viability will have the last laugh.

The most practical contract skills must do the following:

(1) Waiting patiently for the opportunity : When entering and exiting the market, follow your own operating system and trading strategy, and only enter the market when your own trading conditions are triggered to avoid random trading and emotional trading.

(2) Set up your own profit-loss ratio system: only trade when the profit-loss ratio that meets the system appears, and do not trade if it does not meet the system.

(3) Take profit and stop loss must be set: according to the nature of the market at different stages, you need to customize your own take profit and stop loss system to fit the market and be beneficial and efficient.

(4) Position planning: When placing an order, consider a good position, and place sufficient positions at the most certain timing to avoid increasing costs later.

(5) Follow the trend: When you end the trade according to your own judgment, if the market operation and your prediction are wrong, you must admit your mistake in time, and you must not resist it. Learn to respect the market and respect the market, so that you can live for a long time.

After reading these, I believe that you also have a simple understanding of the contract, don't blindly follow the trend. Have your own judgment and don't be swayed by others. Welcome everyone to add LINE: btc54 into the group to communicate, the group will update the BTC and ETH market trend analysis, operation range suggestions, etc. every day, and 2-3 real-time orders will be issued online! Welcome everyone to come to discuss and exchange!