The contract market has been surging recently, with the amount of liquidation reaching 20 billion in just one month. This makes people wonder, is the cryptocurrency market really short of funds? No, the tens of billions of liquidation figures have fully demonstrated the liquidity of funds. In fact, what the cryptocurrency market lacks is not funds, but synergy, especially the kind of strong synergy that can drive the market upward.

Why is there such a large-scale liquidation? People often think that only small funds will take risks to seek high returns, but this is not the case. It is human nature to pursue a surge in wealth, regardless of the size of the funds. We can assume that if 1 million coin holders are involved in the contract market, then the 20 billion liquidation amount will be distributed to each person, which is equivalent to a loss of 20,000 per person. But this is only the calculation in the extreme case where everyone participates and all contracts are liquidated. In fact, among the recent long investors, the proportion of liquidation is as high as more than 90%. This means that it is not just the so-called "small scattered" that have been liquidated, but also large funds.

The liquidation of tens of billions of dollars has revealed at least one problem: those operators who use high leverage, such as 5 times, 20 times or even 100 times, face the risk of being swallowed up by the market at any time, and this has nothing to do with the size of their funds.

Just yesterday, the cryptocurrency market experienced rounds of declines, but many people were hesitant and did not dare to enter the market easily. I carefully read many messages and found that most people had a complicated mentality. Some said that they had no more bullets to fire, some worried that if they bought now, the price would continue to fall, and some were afraid of losing but wanted to win, so they fell into a vicious cycle of chasing ups and downs. Some people missed the opportunity while waiting, and some people lacked enough courage and determination to make decisions.

In fact, these mentalities are very normal, and I have had similar feelings. But I think the deeper reason behind these mental problems is the lack of understanding of contract investment. When we have a clearer understanding of the market's operating rules, our own investment strategies and risk tolerance, we will naturally have more courage and determination to face market fluctuations.

The famous investment philosopher Van Tharp once said: "You don't trade the market, you trade the idea of ​​the market." This sentence profoundly points out the core of investment - building your own investment operating system. However, it is not easy to build such a system. It requires us to have a deep understanding and knowledge of our investment philosophy, interests, goals, knowledge and experience, and ability boundaries. At the same time, we also need to formulate a clear investment strategy, including the timing of buying and selling, the allocation of funds, and the arrangement of investment proportions. In addition, the error correction strategy is also an indispensable part, which can help us stop losses in time and adjust strategies when we make mistakes.

However, building an investment system is not something that can be done overnight. Excellent investment masters often need to go through two bull-bear cycles to gradually build their own operating system, and constantly verify and correct it in practice. For the cryptocurrency market, a bull-bear cycle is about 4 years, which means that we need at least 8 years to perfect our investment system. This is undoubtedly a huge challenge for many investors.

However, despite the difficulties in establishing an investment system, as long as we can persist and continue to learn and practice, we will be able to gradually improve our investment level. In this process, position management is a very important link. Whether it is the stock market, foreign exchange or currency market, strict position management is the key to ensuring investment security. Through reasonable position arrangement, we can effectively control risks and reduce the possibility of liquidation.

Therefore, I think we should take strict position management as the only secret when playing contracts. By maintaining low leverage and moderate positions, we can stay calm and seize investment opportunities in market fluctuations. At the same time, we also need to continue to learn and improve our investment skills in order to better cope with market challenges and changes.

In short, the cryptocurrency market is not short of funds, but lacks a deep understanding of the market and effective investment strategies. By establishing our own investment operating system and focusing on position management, we can better grasp market opportunities and reduce investment risks.



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