Who is the winner in contract trading?

Contract trading is seen by many as a pure speculative act, and they believe that profits and losses depend only on luck. In fact, as you continue to learn more and more, you will find that contract trading is a subject worthy of our in-depth study, whether it is studying news and information on investment products, domestic and international market environment, or analyzing and predicting its price trends from the perspective of supply and demand, observing its related technical indicators, etc., there is endless fun and certain rules and skills.

In the previous articles, we talked about the future development trend of Bitcoin contract trading with the development of Bitcoin. So what are the characteristics of Bitcoin contract trading itself? I roughly summarized the following points for your reference.

1. Small investment for big gains <br/> Contract trading only requires a certain amount of margin to complete several or even dozens of times of contract transactions. Due to the leverage effect of the contract trading margin system, it has the characteristics of "small investment for big gains". Traders can use a small amount of funds to conduct large-scale transactions, saving a lot of working capital.

2. The two-way nature of contract trading <br/> The biggest difference between contract trading and the stock market is that it can be traded in both directions. Contract trading can be long or short. You can make money by going long, and you can also make money by going short, so there is no bear market in futures (in a bear market, the stock market will be depressed while the futures market will remain prosperous and opportunities will remain).

3. Trading convenience <br/> In contract trading, what is bought and sold is a standardized contract, and only the price is a variable factor. This standardized contract can be used as an "abstract commodity" to represent the physical commodity, and as a trading unit, the commodity itself does not enter the market. The standardization of contracts improves the interchangeability and liquidity of contracts, so traders can trade frequently, creating many profit opportunities.

4. High efficiency <br/> Contract trading is a standardized transaction with fixed trading procedures and rules. It operates efficiently one by one, and a transaction can usually be completed within a few seconds. With the internationalization of futures trading, traders can participate in international competition very conveniently.

5. The cost of contract trading is low . Currently, the transaction fees of domestic exchanges are around 0.03% (low transaction fees are a guarantee of success).

The biggest advantage of contract trading is that it has a large leverage, which can quickly expand the profit results when the direction is judged correctly, but when the profit direction is wrong, the principal will be quickly lost until the position is liquidated. In the contract trading market, each latest transaction price represents the balance of long and short forces at this moment. At this price, the power of the rising and falling funds is almost equal. Otherwise, if the power of the rising funds is stronger, the price will rise until a new balance is formed. So we say that at each relatively stable price point, from the perspective of the funds, the proportion of bullish and bearish is 50%. Similarly, for this price, the probability of price rise and fall is also 50%. So we say that the probability of user investment contract trading profit and loss is 50%. Based on this judgment, the probability of continuous profit and continuous loss is also extremely small. For example, the probability of 5 consecutive profits is only 3.125%, and the probability of 5 consecutive losses is also 3.125%. This verifies the characteristics of contract trading from a mathematical model.

The conclusion is that if the profit generated by the contract is not taken out, the user has a high probability of losing the profit that has been generated, so Coinice reveals the rules of contract trading that everyone knows but no one is willing to break. Coinnice advocates small capital investment to obtain large returns, because this is the essential attribute of contract trading. Due to the probability of profit and loss, users always have corresponding profit opportunities. When there is a profit, Coinnice recommends that you withdraw most of the profit and leave 10% for continued trading. Only in this way can you control risks and continuously gain new profits. The profit operation model we recommend is that users choose large leverage operations with small capital investment, judge the direction of the contract's rise and fall trend, and use floating profit to add positions if profits are generated, quickly expand the profit results, and use compound interest mathematical models for calculations. As long as the direction is correct, huge profit values ​​will be generated.

Anti-explosion is the key to the profitable position model. As we all know, Bitcoin prices fluctuate greatly, and with the help of some funds, the price will fluctuate greatly in a short period of time. If the explosion cannot be controlled, all profits will be lost. How to prevent explosion? Everyone has their own operation strategy. On Coinice, users can use strategic trading to set stop-profit and stop-loss to prevent explosion, and then continue to build positions when the price re-enters the original trend direction. If when to open a position is a kind of wisdom, then when to stop loss is a higher level of wisdom. According to the weakness of human nature, people often hope to end a transaction with profit, but the actual situation will only deviate further and further from expectations.

There are two simple points to summarize in contract trading: 1.趋势方向正确2.防爆仓处理得当.

If the above two points can be met, the investment logic of taking a small risk for a big gain may be established.

Outlook for the contract trading investment position model

On Coinice, our theoretical logic is to control the liquidation when the price drops from 3,000 to 2,000. The profit of investing 100 yuan in short selling can reach more than 100,000 yuan. The theoretical model is actually easy to understand. The actual problem is that the price fluctuations are irregular. Investors cannot keep an eye on the market 24 hours a day. It is possible that when the price reverses sharply, they will miss the good operation opportunity because they cannot keep an eye on the market. Then this operation control is realized by the "system logic robot". The rule code writing of the "system logic robot" is actually difficult for many people to implement, so Coinice will officially launch the "smart contract" in January 2016 to solve all the above problems, so that an ordinary user only needs to judge the correct trend, direction and price, and the real operation will be fully managed by the robot to provide corresponding guarantees.

During the trading process, I still advise everyone to overcome the herd mentality and maintain a good attitude. Contract trading is very volatile. Although seizing the opportunity to open a position in time will obtain good returns, we must maintain a good attitude and try our best to remain calm in the face of praise or criticism. We should learn from the stock god Buffett and never lose our composure.