Understanding Contract Positions and Price Behavior

Popularize common sense:

First of all: at any time, the long and short positions of the contract are 1:1. A short order of 10,000 US dollars must correspond to a long order of 10,000 US dollars;

Secondly: the price behavior analysis of position increase is as follows:

When the price falls, positions increase, especially when the price drops significantly. If the position increases at this time, it means that there are funds involved, trading is active, and the market downward trend will end soon;

When prices rise, positions increase, especially when prices rise by a large margin. If positions continue to increase at this time, it means that FOMO is serious and traders are not afraid of risks and eager to enter the market. The upward trend of the market will soon end, because the car There are too many people, and it is necessary to liquidate leverage and wash the market;

Summary: The trading method of retail investors is [chasing the rise and killing the fall]. The higher the rise, the higher the price will be. Although they are aware of the risks, at this time, all kinds of good news and news are coming one after another, and gamblers generally have a fluke mentality. , they will ignore the risks; the lower they fall, the lower they will be. At this time, panic spreads, and all kinds of bad news and news come one after another. Gamblers will generally be scared away, affecting their already prepared bargain hunting plans.

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