How to avoid liquidation in contract trading?
How to prevent liquidation during contract trading? After liquidation in contract trading, people feel like they have no hope for life. Faced with this phenomenon, it usually occurs with new investors who fail to grasp the risk control. If the risk is too high, the position will be liquidated accidentally. There are many reasons for this. However, there are also many investors who are really addicted and do not do any risk control at all. As a result, they lose all their principal.
So, how to prevent liquidation when speculating on contracts?
1. Reasonably control positions
The essence of making money from trading is to make money with compound interest, not with explosive profits. Regarding the model of making money with compound interest, everyone has different ideas, which can be summarized in practice. I would like to give you a mantra: take small amounts in small positions and follow the trend; accumulate small amounts to make more.
2. Bring a stop loss at any time
The stop loss position must be combined with your own position adjustment, and at the same time, it must be combined with your own operating cycle. If you are doing a mid-line operation, the stop loss should be slightly larger, usually around 2,000 points. For short-term operations, the average stop loss level is about 500 points. The invested funds should be divided into 3 parts, one for opening a trial order, and two for adding funds midway. In the specific operation process, a small amount of funds should be used, and appropriate short-term moves should be made, and do not cover it all at once. It is necessary to combine technical stop loss and financial stop loss.
3. Frequent entry and exit is prohibited
If you make three consecutive mistakes in a transaction, you must resolutely stop and do something else. For example, you can read interviews and biographies of some trading masters. When the frustration of the loss disappears and your mentality becomes calm, then carefully analyze the chart, find the cause of the mistake, and try to enter the market with a small order. If you feel that your luck is still "bad", continue to make adjustments.
4. Go with the trend and avoid operating against the trend.
Whenever the market goes short or bullish, many people's accounts will be blown up. The reason is to blindly go long or short, compete with the market, make more mistakes, and increase the bet, thinking that one day the price will turn back, and defeat can be turned into victory. As a result, before the day of turning defeat into victory, all the "bullets" were used, and he died in the middle of the battle.
There are neither longs nor shorts in the market. Only slippers can survive for a long time. When encountering this situation, investors need to strengthen their study, practice hard, and improve their technical analysis level.Improve your psychological quality, strengthen your mental training, and strive to achieve the unity of knowledge and action.
5. It is prohibited to blindly follow the trend of placing orders.
You must carefully analyze the operating methods and thinking of the investment client, think about why he is bullish or bearish, why he opened a position at this price, why he set a stop loss at that position, and where it is consistent with and different from your own analysis and judgment. Wait, ask more why? Once you find that the operation direction of an investment client is opposite to that of the market, you must not blindly believe in and worship it, but leave the market decisively.
In short, in contract trading, risk and profit are directly proportional. You must have your own opinions when making orders, do not follow blindly, adapt to changes, and go with the trend. This will help you avoid liquidation and control your trading risks. #BTC #DOGE
