1.Leverage risk: If you open a short position with a leverage of 10 times and the price rises by 2%, the corresponding loss is a magnification of 10 times, which is equivalent to the loss caused by a price increase of 20%.
2.Transaction risk: In contract transactions, there may be cases where it is too late to complete transactions when the market plummets. For example, if you open a long position and set a price position of $10 to trigger a stop loss. If the market price drops from $10.2 to &9 abruptly, it happens that you cannot trade at $10. One situation is that the price changes too fast and the system has no time to complete the transaction. Another situation is the liquidity of the contract. Liquidity here means that your opponent's set is not enough at the $ 10 position, and the $ 10 closing order cannot be executed without the opponent taking the order. Therefore, it is necessary to pick a platform with good liquidity and transaction depth.
3.Take Profit and Stop Loss Risk: It is recommended to set up take profit and stop loss in contract transactions. Contract transactions are generally leveraged, and no stop loss is set in default. When the market is in great volatility, the loss is also amplified by the leverage multiple.
4.Position risk: In the case of a large position, the unfavorable volatility that can be resisted is very small, and it is more likely to "burst". It is recommended to control the position below 30%, that is, to keep your less than 30% of the total amount of funds in the account.
5.Commission fee risk: Some traders tend to do short-term orders or quantitative transactions. Too many transaction times may result in large commission fees, and the profit is not enough to pay commissions at the settlement.
6.Capital cost risk: Perpetual contract will incur capital costs every eight hours. If the capital costs are paid multiple times, in the case of not enough margins, it may trigger forced liquidation.