Why are most people in the crypto world not suitable for trading contracts?

Contracts are a monstrous thing for most people, while for a small number of people, they are a tool for wealth. If you want to engage in contracts, first understand the content below.
1. Assuming a liquidation probability of 0.1%, the total probability of liquidation after 1000 trades reaches 63%, and the probability after 2000 trades is 87%. The probability of liquidation is just a theoretical assumption. In actual operations, since the price trend probabilities generally follow a normal distribution, as the leverage multiplier increases, the probability of liquidation grows exponentially. This means that the probability of liquidation with 10x leverage is much greater than that with 5x leverage.
2. Assuming a transaction fee of 0.1% each time and a win rate of 50%, after 1000 trades, the principal is likely to be reduced to zero.
3. Suppose you have 10,000 yuan. If you make a 50% profit the first time and then lose 50% the second time, you are left with 7,500 yuan. If you lose 50% the first time and then make a 50% profit the second time, you are also left with 7,500 yuan. If you incur a 90% loss in a certain trade, you would need to earn a 900% profit to break even.
As for the split position method and the stop-loss line, there is essentially no difference between the two; both reduce risk while also lowering returns.
4. In the spot market, 10% of retail investors can make a profit, while in the futures market, 3% of retail investors can make a profit.
There are approximately three types of people who profit from contracts:
1. It's about making quick profits with small capital, relying on win rates to earn money. Strict discipline is required; once you make a profit, you should withdraw it.
Second, it relies on the profit-loss ratio to make money. Even with a win rate of less than 50%, if the gains are greater than the losses, then a lot of money can be made.
Third, it relies on rolling positions, like Tony turning 50,000 dollars into millions, the dogecoin making 400 times at lunch, and the female college student shorting Luna to earn millions, as well as Liangxi's 1,000 yuan turning into ten million, all achieved through rolling positions.

If you want to treat trading coins as a second source of income, wish to get a share in the crypto world, and are willing to spend time growing and learning, then you shouldn't miss this article. Read it carefully; every point is the essence of the crypto world.
It can be said that whether it's a bull market or a bear market, these 【must-follow trading rules】 can be helpful to you! Later, we will also talk about an essential tool for Bitcoin trading - BOLL, which can determine whether it's a bull market or a bear market.
Before every transaction, everyone must first ask themselves three questions:
First, think about the reason why you open an order each time.
Secondly, do you often encounter profitable trades turning into losses?
Third, do you often hold positions until liquidation and not know what to do? These three questions are unavoidable for everyone who trades, and crypto enthusiasts have more or less encountered them. Everyone has gone through this, especially beginners, who are often very blind. The essence lies in their failure to establish a mature trading mindset and trading system.
What is a trading system? It is a self-methodology for trading, opening positions, closing positions, adding positions, reducing positions, taking profits, and cutting losses, essentially a set of personal rules. The most direct benefit of having such a system is that all your trades are traceable, greatly reducing the chances of making mistakes and the amount of losses. Furthermore, you do not need to monitor the market in real-time. By strictly following the system, you have a clear understanding of your goals and potential losses, allowing you to remain stable regardless of market fluctuations.
So how do you establish your own trading system? The most important thing is to have a good mindset. The crypto world is a market that can be traded 24 hours a day, with unpredictable market conditions and huge volatility. Strong psychological qualities are required when trading. A person's operating habits, psychological endurance, strategy execution ability, and the ability to overcome greed and fear all vary in index, determining that each person has a different trading system that suits them.
Based on my long-term summary, an excellent system must contain the following characteristics:
First, the trading frequency should not be too high. In the crypto world, there are too many people eager to get rich, and if they don't make a trade in a day, they feel like they will miss out on the big market trend they are fantasizing about. In fact, trading should be based on market conditions, not time. If there is no market movement, blindly making trades will only lead to losses. There are plenty of opportunities in the crypto world, but the vast majority are not ones you can seize; no one can capture every fluctuation. "Waiting" is key; learn to wait, seize the opportunities that belong to you, and reduce the frequency of your stop-loss orders, and your returns will naturally see a significant increase.
Second, overcome greed. Greed is the most taboo thing in trading coins, especially in contracts, as the market fluctuates every day. With every rise, there is bound to be a fall. I have seen too many people who, due to their greed, fail to take profits on orders that could have doubled, resulting in losses, forced sell-offs, or even liquidation.
Third, strictly set take profit and stop loss. This is the most important operation in trading contracts, and it is also a key reason why I can achieve a maximum return rate of 11570.96%. Before analyzing the market and placing an order, always consider the positions for take profit and stop loss, especially the stop loss position, and calculate whether the risk-reward ratio is worth taking the trade. When you feel confident, set these two positions. No matter how the market fluctuates, you will be as steady as Mount Tai. Strictly adhere to the stop loss position to preserve your capital, and take profit in batches at the take profit position to lock in profits.
Fourth, control your position well when opening orders. Why is position control necessary? A simple calculation can help you understand: if you make a profit of 20% on one order and a loss of 20% on another, with an accuracy rate of 50%, after 40 cycles, your assets can be halved. Considering the transaction fees, even less will remain, and the result will definitely be that your assets reach zero. Therefore, it is essential to control your position well. Keeping a fixed principal is a good choice, and withdrawing profits is a great habit, because only what is withdrawn truly belongs to you; what remains on the exchange is just unrealized gains.
Fifth, practice and review summary. Once you have learned to control your mindset, positions, funds, and candlestick operation techniques, you still lack the most critical and essential part of building your own system, which is to practice and review summary. Practice brings true knowledge, and reviewing can lead to improvement.
Reviewing, it's important to do a review for every trade and weekly. Notes and real trades can greatly help everyone summarize and enrich their reasons for opening trades and improve their take-profit and stop-loss points.
The trading system is not built overnight; it is summarized through continuous practice in placing orders. No one is born with an understanding of candlestick charts or contracts; it is all learned through ongoing exploration. Who hasn't lost money and paid tuition fees? The important thing is that the tuition should not be paid in vain. One learns wisdom from setbacks; by gaining experience from failed trades, one naturally knows what not to do and what to do in similar market conditions next time.
#BTC #ETH #PI #DOGE #PEPE