Recap for MoonXBT Community AMA on USDT Perpetual Contracts
AMA Recap：How to be a successful perpetual contract trader
Host: Hello everyone! Last week, we introduced you to perpetual contracts and the advantages of MoonXBT perpetual contracts.
Host: This time, we will give you insights on how to successfully trade perpetual contract and earn substantial profits. Today’s guest is our old friend, Elon, from the MoonXBT team.
Host: Before we start our Q&A, let me remind you that we will have a live question and answer session at the end, so please stay to the end and participate!
Host: Now, let’s officially start this AMA, ladies and gentlemen, Elon from the MoonXBT Product Team.
Elon: Hello guys, I am Elon. Nice to meet you again. I am honored to discuss how to be a successful perpetual contract trader with you today!
Host: My first question is, what personal qualities are necessary for a successful perpetual contract trader?
A successful perpetual contract trader is someone who can profit in any market condition. Traders come from many backgrounds and lifestyles, but the most successful perpetual contract traders are as following:
1. Independent Thinkers
Great traders think for themselves rather than following the crowd. They pay attention to what is happening in the markets and world to help inform their trading decisions. They do not panic in a market downtrend. Instead, they turn to bearish strategies to make money. They also avoid getting too greedy in bull markets when many investors behave as if the market will go up forever.
2. Strong Analysis
To be a successful perpetual contract trader, you must understand technical and fundamental analysis. When beginning, gaining the necessary knowledge and experience may seem like an enormous task. But there is a wealth of information in books, magazines, and websites. To learn, you can practice and hone your skills by paper trading.
3. Active Learners
Successful traders never stop learning. Consider attending seminars or other events where you can interact with traders and continue your education.
Host: Ok, thanks for the answer, Elon. My second question is, what are the tips for trading perpetual contracts?
1. Use the “No Expiration Date” Feature to Your Advantage
Although similar to some traditional futures contracts, what differentiates perpetual contracts is that they don’t come with an expiration date.
This gives users a significant advantage in volatile markets, as they can wait for the market to turn in their favor.
2. Use Stop-Loss & Take-Profit orders
Another way to minimize losses and maximize gains is to use stop-loss and take-profit orders.
A stop-loss order ensures a perpetual contract is bought — or sold — once it achieves a specific price, while a take-profit order can be put in place to ensure your assets sell once they reach a predetermined price above the purchase price.
3. Ensure You Have a Diverse Portfolio
Diversification is one of the key risk management strategies for any derivatives trader. A diverse portfolio allows traders to spread their investments more widely and avoids a scenario where a single large investment leads to serious losses.
Diversification is also a solid strategy for perpetual contract trading. Although they don’t have an expiration date, and can therefore weather a tumultuous market — traders should never stake too much on a single investment.
4. Take Advantage of Leverage
Leverage is additional funds an exchange is willing to lend a trader so they can see a greater return on their investment.
Of course, it is critical to understand the risk, but trading perpetual contracts with leverage can lead to far greater returns in the long run.
Host: Ok, I think they are very important tips. Every trader should know about them! My third question is, is there anything traders should avoid doing?
1. Don’t Be Afraid to Close the Contract
Taking advantage of the unlimited time perpetual contracts can remain active can be very profitable. But there is a point when it makes financial sense to cash in.
The key is to monitor the market closely and make a sensible decision to complete when conditions are working in your favor. Don’t be greedy — it could well lead to a loss.
2. Don’t Risk More Than You Can Afford
Another essential risk management strategy that translates into the trading of perpetual contracts the same way it does for many other products is to ensure you don’t risk more than you can afford to lose.
Host: Ok, thanks! My fourth question is, what are the four top trading indicators every trader should know how to use?
Using trading indicators is part of any technical trader’s strategy. There are actually many trading indicators. Let me introduce the following four top trading indicators.
- Parabolic Stop and Reverse (SAR)
The Parabolic SAR is a trend indicator. Dots appear on the chart above or below the price and indicate the potential direction of the price movement. Simple and easy to use!
Let me send one charts as additional clarification.
2. Bollinger Bands
Bollinger bands are a volatility indicator. They consist of a simple moving average and two lines plotted at two standard deviations on either side of the central moving average line. The outer lines make up the band.
When the band is narrow, the market is quiet. When wide, the market is loud.
3. Relative Strength Index (RSI)
Next up, the Relative Strength Index (RSI) is a momentum indicator plotted on a separate scale. A single line scaled from 0 to 100 identifies overbought and oversold conditions in the market. Readings over 70 indicate an overbought market, and readings below 30 indicate an oversold market.
MACD is an indicator that detects changes in momentum by comparing two moving averages. It can help traders identify possible buy and sell opportunities around support and resistance levels.
‘Convergence’ means two moving averages are coming together, while ‘divergence’ means they are moving away. If moving averages are converging, momentum is decreasing, while if the moving averages are diverging, momentum is increasing.
There are many other technical indicators, we will have the opportunity to learn together later！You can add those technical indicators by clicking here on moonxbt！
Host:Thanks for Elon’s sharing, I believe that we have gained a lot on How to be a successful perpetual contract trader. Now enter our live Q&A session, we have prepared a 100 trading bonus pool for 10 best questions, let’s go！
So far what indicators are highly recommended for beginners?
MACD and RSI, you can learn more about how to use them in trading and profit!
Almost all new traders tend to use leverage up to 100x or more when they don’t have enough experience. Do you have some advices, tips for them as other traders??
The highest leverage is 100x. We advise that you compare the leverage that you used to use when trading liquid contracts. don’t set too high in the beginning. you can adjust it after you are familiar with perpetual.
Are there any additional bonuses for users who benefit on perpetual contract trading?
We have a 20% rebate for perpetual trading. you can invite your friends to trade to get the bonus.
How about volume in cryptocurrencies trading? Why is volume important in cryptocurrencies?and how will volume affect traders?
The highest trading volume cryptocurrency exchanges are the ones that offer the best opportunities, because the more overall volume an exchange has, the easier it will be for the investor to trade their chosen coin.
Chick here for more detail on perpetual contacts.
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April 14th, 2022
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