Properly allocating trading capital is a key strategy for risk control and stable operations. Whether in futures, perpetual contracts, or CFDs, investors are advised to allocate funds according to their risk tolerance and trading strategy.
Diversify Positions
Do not invest all funds in a single position or contract to avoid significant losses due to market fluctuations.
Funds can be allocated to different positions or trading strategies to reduce overall risk.
Set Risk Ratios
Each trade should use a reasonable proportion of the total account balance (e.g., 1%-5%) to avoid a single loss having a major impact on the account.
High-leverage trading requires strict control of single-trade risk.
Reserve Backup Funds
Keep a portion of funds as margin reserve to handle sudden market fluctuations or margin calls.
Avoid fully investing funds, which could lead to forced liquidation or inability to adjust positions.
Adjust Capital Allocation Regularly
Dynamically adjust fund allocation based on account performance and market conditions.
Prevent risk concentration or unreasonable fund usage due to market changes.
Summary
Proper capital allocation effectively controls the risk of individual trades and reduces overall portfolio volatility. Combined with leverage management, stop loss/take profit, and position control, it allows investors to participate in contract trading more safely and steadily.