The core of Bitcoin contract trading risk control lies in regular operations and fund management. The specific strategies are as follows: 1. Understand the contract rules before trading and plan idle money investment to avoid technical losses; 2. Use low leverage, light positions to diversify, and forced stop loss and stop profit to reduce risks; 3. Avoid extreme market conditions when dealing with fluctuations, refuse to carry orders, and reasonably hedge positions; 4. Adhere to review and emotional management after trading to ensure strategy optimization and disciplined execution.

Bitcoin trading platform:

Ouyi OKX:

Binance Binance:

Huobi:

Gateio Sesame Opening:

1. Before trading: establish basic cognition and funding planning

1. Completely understand contract rules and avoid "technical losses"
   • Clarify the contract type (perpetual contract/delivery contract): Perpetual contracts need to pay attention to the capital rate (fees paid by long and short parties may increase the holding cost), and delivery contracts need to pay attention to the expiration date (avoid forgetting to close the position and resulting in automatic settlement).
   • Be familiar with the leverage and margin mechanism: the leverage multiple directly determines the risk (for example, when the price fluctuates by 10% at 10 times, it is possible to lose positions), and it is necessary to be cleared that the margin rate is maintained (below this value will be forced to close the position).
   • Case: A novice holds long orders for perpetual contracts because he does not understand the "funding rate", and loses due to frequent payment of fees during the market sideways, which has nothing to do with price fluctuations.
2. Use "free money" to participate and strictly set the total fund ceiling
   • The funds invested must be idle funds that "do not affect life after losses", and the sources of funds such as lending and credit card cashout must be resolutely eliminated.
   • The total investment shall not exceed 5% to 10% of the individual's investable assets (adjusted according to risk tolerance). For example, if you invest 1 million yuan in assets, you will invest up to 100,000 yuan to participate in the contract, avoiding leverage betting on the market due to the "return mentality".

2. In trading: core strategy - control leverage and position, set stop loss and stop profit

1. Leverage multiple: Not low or high, novices are preferred by 1-5 times
   • Leverage is a "amplifier" of risk, not a "profit tool". Even if the market is judged accurately, high leverage (such as 50 times, 100 times) may instantly explode due to short-term fluctuations (such as pin market).
   • Suggestion: Novice starts with 1-3 times leverage, and those with experience do not exceed 10 times. In extreme market conditions (such as the Federal Reserve's interest rate hike and the black swan event) it will directly drop to 1 times (equivalent to spot risk).
2. Position management: "Light position diversified", single-type positions shall not exceed 5%-10% of the total funds
   • The margin amount of a single position opening shall not exceed 5%-10% of the total account funds (for example: an account of US$10,000, and the margin for a single position shall not exceed US$1,000).
   • Avoid "stopping all the bets": Even if you are extremely optimistic about a certain market, you need to reserve funds to deal with reverse fluctuations (such as adding margin or issuing hedge orders).
3. Forced stop loss: "No stop loss, no trading"
   • Stop loss is the "lifeline" of contract trading. It must be set simultaneously when opening a position, and the stop loss range matches the leverage:
     • 5 times leverage: The stop loss range is recommended not to exceed 2% (5 times × 2%=10%, close to the liquidation line, leaving a safe buffer);
     • 10 times leverage: The stop loss range shall not exceed 1% (10 times × 1%=10%).
   • Stop loss method: Priority is given to the platform "conditional order" to automatically stop loss to avoid manual stop loss missed due to hesitation.
   • Counterexample: An investor opened a 10-fold long order and set a stop loss of 1%, but when the market fell sharply, hesitated to "wait for the rebound and then set a flat", and the position was reduced within 3 minutes and the entire margin was lost.
4. Take profit: Take the risk of losing money and avoid "profit revenge"
   • Set clear take-profit targets (such as resistance level based on technical analysis, fixed profit ratio), and take-profit in stages (such as half of the profit is 5%, and move stop loss is set at the remaining positions).
   • Avoid "greed": Bitcoin fluctuates by 20% per day. It is normal to not pursue "selling at the highest point", and it is more important to keep some profits.

3. Trading: Real-time strategies to deal with market fluctuations

1. Avoid extreme market conditions and not bet against "black swans"
   • Before and after major events (such as the Fed's interest rate resolution and the introduction of cryptocurrency regulatory policies), Bitcoin prices may have "pin" (instantly sharp rise and fall). At this time, high-leverage positions are very easy to explode. It is recommended to temporarily close the positions and wait and see.
   • Example: When the LUNA collapsed in 2022, Bitcoin plummeted 15% within one hour, and a large number of high-leverage long positions were forced to close, while short or light positions avoided risks.
2. Refusing to "carry orders": Do not blindly increase leverage when making losses
   • If the market is opposite to the position direction and the loss expands, adding leverage to replenish positions will further amplify the risk (equivalent to "using a larger bet to reverse the price").
   • Correct operation: If the stop loss is triggered, close the position and leave the market decisively; if the stop loss has not reached but the market reversal signal is clear, take the initiative to stop the loss to avoid losses exceeding expectations.
3. Hedging risks: Balance positions with reverse contracts
   • If you hold a position in a certain direction for a long time (such as long positions) but are worried about a pullback in the short term, you can open a small number of reverse contracts (such as short positions) to hedge them to reduce the overall risk of volatility (equivalent to "insurance yourself").
   • Example: Holding a 10-fold leverage long order and opening a 2-fold leverage short order at the same time, the overall leverage drops to 8 times, and the loss decreases during the pullback.

4. After the transaction: review and mentality management

1. Daily review: record the reasons for profit and loss, optimize the strategy
   • Record the reasons for opening positions, leverage, stop loss and take profit settings, and profit and loss results of each transaction, analyze whether the profit is due to the validity of the strategy, whether the loss is due to the lack of understanding of the rules, the failure to execute the stop loss or the market is misjudged.
   • Avoid repeated mistakes: For example, if you lose money due to "forgot to set a stop loss" many times, you need to force yourself to form a muscle memory of "stop loss must be set" when opening a position.
2. Control emotions: Eliminate "gambler mentality"
   • When making continuous profits, do not blindly increase leverage (avoid "wants more if you win"); when you lose continuously, suspend trading and then operate after review (avoid emotional betting orders that "wants to make money if you lose").

Summary: The core logic of risk control

The above is the detailed content of How to control risks in Bitcoin contract trading?. For more information, please follow other related articles on the PHP Chinese website!