Many people who trade contracts do the first thing—research how many times leverage they can use.
But Lao Chen believes the real thing to study is how much volatility your own position can actually withstand.
Here’s a simple example.
With the same nominal position of 1000U, if you use 100U as margin to open at 10x, you could also use 50U to open at 20x.
They look like the same position, but the risk is completely different.
If the market moves against you by 1%, then at 10x you’ll lose about 10U, which is 10% of your margin; at 20x you’ll lose about 20U, which is 40% of your margin.
The higher the leverage, the less room you have to make mistakes.
So many people don’t necessarily get the direction wrong.
It’s that the market hasn’t really moved the way they expected, yet their margin can’t take the pressure anymore.
Of course, leverage itself isn’t a flood monster.
The key is that you need to know why you’re using that multiplier.
Is it to improve capital efficiency, or is it simply because you think your principal is small and want to quickly turn things around with high leverage?
These two starting points can lead to completely different outcomes.
Lao Chen has always placed emphasis on three things when trading contracts: don’t use positions that are too heavy, don’t open leverage randomly, and think about your stop-loss in advance.
Don’t assume you can magnify risk just because you made money once; and don’t think that because you lost once, you should go all-in and fight back on the next trade.
The real test of contract trading is never how many times you dare to open.
It’s whether, when the market doesn’t move according to your expectations, you can still stay calm and handle it properly.
As long as you have capital, there’s still opportunity.
First control the risk, then talk about how to generate profits.@老陈带单
#币圈暴富 #币圈生存法则 #新手小白 $BTC $ETH
But Lao Chen believes the real thing to study is how much volatility your own position can actually withstand.
Here’s a simple example.
With the same nominal position of 1000U, if you use 100U as margin to open at 10x, you could also use 50U to open at 20x.
They look like the same position, but the risk is completely different.
If the market moves against you by 1%, then at 10x you’ll lose about 10U, which is 10% of your margin; at 20x you’ll lose about 20U, which is 40% of your margin.
The higher the leverage, the less room you have to make mistakes.
So many people don’t necessarily get the direction wrong.
It’s that the market hasn’t really moved the way they expected, yet their margin can’t take the pressure anymore.
Of course, leverage itself isn’t a flood monster.
The key is that you need to know why you’re using that multiplier.
Is it to improve capital efficiency, or is it simply because you think your principal is small and want to quickly turn things around with high leverage?
These two starting points can lead to completely different outcomes.
Lao Chen has always placed emphasis on three things when trading contracts: don’t use positions that are too heavy, don’t open leverage randomly, and think about your stop-loss in advance.
Don’t assume you can magnify risk just because you made money once; and don’t think that because you lost once, you should go all-in and fight back on the next trade.
The real test of contract trading is never how many times you dare to open.
It’s whether, when the market doesn’t move according to your expectations, you can still stay calm and handle it properly.
As long as you have capital, there’s still opportunity.
First control the risk, then talk about how to generate profits.@老陈带单
#币圈暴富 #币圈生存法则 #新手小白 $BTC $ETH