Until now, many friends still don’t know what perpetual futures contracts mean?
Today I’ll briefly talk about perpetual futures contracts. As the name suggests, they don’t have a fixed expiration date. In today’s market for trading digital-asset derivatives, they’re quite a novel type. As long as you don’t trigger forced liquidation and you don’t close the position voluntarily, you can hold it continuously.
So in actual practice, how many times leverage is appropriate?
I previously chatted with some people in the industry. Some are used to opening 50x leverage, while others commonly use 30x. Taking a certain popular digital asset as an example: with 30x leverage you need 16U as margin; with 50x leverage you need 10U; and with 100x leverage you only need 5U.
Under the same market conditions, personally I lean toward 100x. Why? Because once you choose a leveraged contract—whether it’s 1x or 100x—risk still exists. But under the same market scenario, the difference in returns between 1x and 100x is simply too large. Some say 1x has lower risk—that’s true. But for that popular asset, at 1x leverage the cost of a single contract might be as high as more than 470 U. If the price doesn’t move significantly, the trading fees alone can be enough to weigh you down. Even if you profit, it wouldn’t be much. So if you’re going to trade leveraged contracts, you should let the leverage advantage be fully realized.
However, you also need to pay attention: many people use a small amount of capital to open contracts that exceed their ability to withstand losses. If the margin isn’t enough, they simply can’t handle price fluctuations. When the price oscillates back and forth or swings sharply up or down, it’s very easy to be forced liquidated. After that, even if the market later turns favorable and you could have made profits, it has nothing to do with you anymore. Therefore, when trading perpetual futures, if conditions allow, it’s necessary to prepare more margin—having an extra layer of protection is always a good thing.
Every investment carries risk. What we want to do is reduce risk as much as possible, and then pursue returns.
Set a small daily goal for yourself. When you achieve it, take profit promptly—trading will feel more relaxed. Friends who have been exposed to this kind of trading for a long time should know: if you have 5000U in principal, making 200–500U a day isn’t that hard. If you learn some methods and skills, your success rate can be even higher. Even considering market volatility and unexpected situations, if you compromise and calculate it—over 30 days in a month—if you can reach your target on 20 of those days, you can still end up profitable. I hope my sharing can help everyone.
Today I’ll briefly talk about perpetual futures contracts. As the name suggests, they don’t have a fixed expiration date. In today’s market for trading digital-asset derivatives, they’re quite a novel type. As long as you don’t trigger forced liquidation and you don’t close the position voluntarily, you can hold it continuously.
So in actual practice, how many times leverage is appropriate?
I previously chatted with some people in the industry. Some are used to opening 50x leverage, while others commonly use 30x. Taking a certain popular digital asset as an example: with 30x leverage you need 16U as margin; with 50x leverage you need 10U; and with 100x leverage you only need 5U.
Under the same market conditions, personally I lean toward 100x. Why? Because once you choose a leveraged contract—whether it’s 1x or 100x—risk still exists. But under the same market scenario, the difference in returns between 1x and 100x is simply too large. Some say 1x has lower risk—that’s true. But for that popular asset, at 1x leverage the cost of a single contract might be as high as more than 470 U. If the price doesn’t move significantly, the trading fees alone can be enough to weigh you down. Even if you profit, it wouldn’t be much. So if you’re going to trade leveraged contracts, you should let the leverage advantage be fully realized.
However, you also need to pay attention: many people use a small amount of capital to open contracts that exceed their ability to withstand losses. If the margin isn’t enough, they simply can’t handle price fluctuations. When the price oscillates back and forth or swings sharply up or down, it’s very easy to be forced liquidated. After that, even if the market later turns favorable and you could have made profits, it has nothing to do with you anymore. Therefore, when trading perpetual futures, if conditions allow, it’s necessary to prepare more margin—having an extra layer of protection is always a good thing.
Every investment carries risk. What we want to do is reduce risk as much as possible, and then pursue returns.
Set a small daily goal for yourself. When you achieve it, take profit promptly—trading will feel more relaxed. Friends who have been exposed to this kind of trading for a long time should know: if you have 5000U in principal, making 200–500U a day isn’t that hard. If you learn some methods and skills, your success rate can be even higher. Even considering market volatility and unexpected situations, if you compromise and calculate it—over 30 days in a month—if you can reach your target on 20 of those days, you can still end up profitable. I hope my sharing can help everyone.