On the path of contract trading, I’ve seen too many people pay the price for acting on impulse. A friend of mine lost 600,000 over two years, then started over with 3,000U, and by strictly following his strategy, gradually made back his losses within half a year. The biggest lesson I got from this is: methodology is far more important than luck.

First, let’s talk about stop-loss. Many people react to a series of losses in one of two extreme ways—either by going on a revenge trading spree or by becoming paralyzed and afraid to act. In my experience, when you keep getting stopped out, pause for a bit; don’t stubbornly force yourself to continue. Trading isn’t a contest of speed.

As for position management, never expect to make a comeback in just one trade. Small accounts trading contracts are essentially playing the odds, so losses are perfectly normal. The question is, what do you do after a loss? Going all-in will only accelerate liquidation; controlling risk per trade is the key to survival.

Trend judgment is often overlooked. When the market clearly moves in one direction, following the main trend is almost always right. Yet many people love to bottom fish or call tops, thinking they can catch the turning point. In reality, nine out of ten lose when trading against the trend—the market won’t change direction just because of your conviction.

You must calculate your risk/reward ratio in advance. If the potential profit of a trade is only half the potential loss, it’s simply not worth taking. Aim for at least a 2:1 ratio to make it worthwhile. Otherwise, even with a 50% win rate, you’ll lose money in the long run.

Overtrading is a common problem. People always feel like they’re missing out if they’re not in a position, but while the market fluctuates every day, truly high-probability opportunities are rare. Beginners especially need to restrain this impulse—not every candlestick needs your participation.

One last thing: never hold a losing position and hope. Many think that as long as they don’t close the position, it’s not a loss, but this is the most dangerous mindset. Contracts have forced liquidation mechanisms, and holding out will only lead to losing everything. Be decisive with stop-losses when necessary—protecting your capital is more important than anything.

And don’t get cocky when you’re winning. After a few consecutive wins, it’s easy to get overconfident, start increasing your position size, or trade recklessly, and that’s often when losses begin. The market has many ways of teaching prideful people a lesson.