When we want to earn money through trading, the most profitable in the shortest time is through futures trading. Because this type of trading can give you several times profit in a short period of time. But it should also be kept in mind that through this type of trading you can lose more than you gain. Futures trading seems a lot like gambling to me. Just like when you lose money in gambling, your fund balance will be zero when you run out of liquidity in futures trades. So it is as profitable as it is a terrible risk trap. So before taking this type of trade you must follow some rules. Through which you can maintain your profit. So let's know about some rules:
Proper Plan:
It is not possible to achieve success in any work of life without proper planning. Here too you need to plan properly. How much of your net balance you will spend on futures trades must be considered first. But in my opinion very little amount should be taken here. Moreover, you have to plan how to enter the market and how to sell out of the market. Moreover, you have to plan whether you will participate through short or long trad. That's why you must plan properly. Besides, if you enter the market hastily, then you can never expect profit from it without loss.
Adjust Leverage:
Adjust leverage is a very important part of futures trading. Through this you can participate in risk free and risky trades. Here the amount of your profit or loss will depend on the risk. But the most important thing here is to participate in futures trading with less leverage. It can be 2x or 3x or 4x or 5x. However, you can participate in such trades with up to 200x leverage on some coins. But you have to keep in mind that the higher the leverage is, starting from 10x, the higher the leverage and at this time you are afraid of running out of liquidity. Which makes you a risky trade. Of course you have to leverage your risk otherwise it can lead you to big risks. According to me newbies can participate with maximum 5x leverage.
Use of Stop-Lose Order:
Stop loss is very important in any trade. Because through this you can save yourself from major losses. When the price of your purchased coin starts to rise, you can place a take profit on the upside and a stop loss on the downside. By doing this you will not lose. Even if you place a stop loss just above where you bought, you can profit even if the price goes down. Also, if the price of the coin continues to rise, then you move the stop loss upwards. And take profit can be given above. By doing this, you will have a small profit instead of a big loss.
Satisfaction with small gains:
You should be satisfied with small gains. We all know the sin of covetousness is death by sin. So greed should be completely avoided. Remember small gains will put you in a better position than losses and your wallet will be heavier.
Avoid Over Trading:
Over trade will lead you to huge losses. Set your mindset in such a way that you understand the reality and realize that over trading is harmful. Because the price of coins in the market will not increase or decrease in the same way, suddenly their prices can go down or up. Then your net balance may go to zero. So this kind of over trade should be stopped.
Take DCA(Dollar Cost Average):
Since the market is volatile, you must buy coins in several steps so your Liquidity doesn't run out easily. Because when your percentage goes negative at some point in your liquidity the price of coins will easily fall and you will lose money. So it is best to keep liquidity as far away as possible. That is why you should take market entry in several steps. That is, you need to learn to dollar cost average.
Understanding Market Sentiment:
Understanding market sentiment is very important. There must be an idea of which direction the market may move. Because we know the price of other altcoins fluctuates around BTC. So you must keep these things in mind. Keep in mind that the crypto market is known for volatility. When the market becomes volatile you can lose money in your wallet if you trade without understanding the volatility. Moreover, you have to keep updated about positive or negative news in the market and keep yourself updated with various news including social media.
Trading Strategy and Knowledge:
You need your own strategy when you trade the market. You definitely need your own personal strategy when and how much to participate in the market, how much leverage to use and which coins to trade. And also need to gain knowledge about it. Because without proper knowledge you can never profit from such market.
Conclusion:
Just as one can become a rich person very quickly through futures trading, so can a pharisee very quickly. This is a terrible trap. Many people are constantly losing their hard earned money by stepping into this trap. Of course, many people are benefiting a lot from here. But in this case you must adopt strategies and also make yourself proficient through trade related knowledge. You must follow the rules to be successful here. Avoid excessive greed and be content with little and remember that small gains are always better than big ones. So I think you should participate with less leverage and small amount to keep the liquidity of the trade far away. Which can save you from major losses.