Contract trading appeared in the currency circle in 2013, but only a few investors believed in it at that time. With the popularity of Bitcoin, more and more investors are interested in virtual currency, which has led to the popularity of contract trading in recent years. Contractual transaction refers to the transaction between the parties to an agreement that promises to receive a certain amount of certain assets at a specified price at a certain time in the future. So, is there any risk in contract trading? How to reduce the risk? Next, let's have a look.

Is there any risk in contract trading?

1. Considering cost

At the current BTC price, cash needs to pay more than $5000 to obtain a BTC, and every fluctuation is a gain or loss of $1. That is, if the BTC drops from $5000 to 0. The maximum loss is $5000. In contract transactions, if you want to bring a gain of $1 due to a BTC fluctuation, you can obtain the same value by paying a guarantee of $150. Then, as in the previous case, it only needs $5000 to drop from 5000 to 0, At this time, some people will say that there is a strong equalization system in the contract transaction, and the assets will disappear if it does not fall so much. However, if there are assets in the account, it will fall by 5000 dollars at most.

2. Risk of time

People who speculate on coins know that the market can not always be an upward trend, but also a downward trend. A friend of mine is interested in long-term investment when he is making banknotes. He hopes that one day he can earn a lot by dozens of times. Since there were a group of friends who ate crabs before 2018, as long as they had the right time, they basically made a lot of money. But when we look at history, we should also accept reality and not live too much in our dreams. Most of them have plummeted for two consecutive years since 2018, and most of them, led by mainstream currencies, are in a bear market situation, so it is better to choose against them than to burn money in them.

From the beginning of this year to the recent arrival of the Mavericks. Many friends chose to buy at a high price again, but when they encountered a sharp drop of 200 to 400 points, everyone was bleeding. When they fell, they could only watch and would not go out, because they had no money to add positions. Some people may be optimistic and put it there. In a word, it will rise. We can't determine whether it is a month or a year.

Maybe by the day you can't stand it anymore, and you've been forced to come out of it. Besides, the contract is very suitable for short-term and long-term Nali. Every time you manipulate, you just need to take out 20-30% of your positions to do the stationing of coins. Several tens of times of the money will make a great profit in a short period of time, and there will be more money to reasonably arrange for making meaningful currencies. If the assets are reasonably arranged, risk control should be properly controlled to kill two birds with one stone.

How can contract transactions reduce risks?

In the digital currency transaction, if the contract transaction is not touched, the risk of spot fluctuation is relatively small. If it is necessary to increase leverage, the hedging methods for traditional futures trading also apply.

1. Make sure you can afford to lose before entering. This is not an official tip. The high risk of the futures market is that both decision-making risk and external risk are complex and changeable, and they will face great risks if they are slightly ill considered. In most cases, the ignorance of the spot market will be amplified under the influence of leverage, and the Buddha nature of the spot market will be a real loss in the futures market. Recognizing the imperfections of traders and realizing the return to zero probability under high risk is the first step to enter the market. Those who come in with the mentality of becoming rich are likely to leave with "sudden death".

2. There is only one choice between heavy position and high leverage. Some people often take all their wealth to do the operation of 20 times the leverage in OKEX. I don't know who gave him such boldness. Heavy warehouse and high leverage, selected at the same time, will greatly magnify your risk, which is equivalent to walking to the fire site with a gas tank.

3. Choose a variety that you know well and are comfortable with adding positions. Xiao Bian once broke positions on ETH and watched it explode. Since there was no more ETH to add positions to, it was very painful for him to beat himself to death. Therefore, Xiao Bian has the ability to add margin in extreme cases.

4. Orders should be opportunity driven rather than operation driven. Operation driven means opening the trading market and then thinking about which direction you should bet today? Opportunity driven means that the price has already fallen very low (increased enough), and there is a great chance of winning by going long (short), so go ahead.

Having said that, I believe you have a certain understanding of the risks of contract transactions and how to reduce them. In general, I remind all investors here that although contract trading is favored by many investors at present, after all, any investment is accompanied by certain risks. You must have a comprehensive understanding before entering the market and not blindly follow the trend.