Why do 90% of people lose money when trading contracts?
Experienced traders reveal the deadly traps of high leverage
Contract liquidation, price manipulation, overnight losses... these terms are common in the cryptocurrency world, but why do some people still rush into the high-leverage casino?
Today, I will share with you the hard lessons learned: contracts are not unplayable, but most people simply don't know how to play!
1. High leverage contracts = legal gambling? Many people think that contracts are just "tools to amplify profits," but they overlook that they are also a "grinder that amplifies losses." 125x leverage sounds exciting, but if the market price moves against you by just 0.8%, your principal will vanish into thin air! Liquidation from price spikes is a routine operation of exchanges; how many people instantly go to zero from a single spike?
The truth: the essence of high leverage contracts is betting on short-term direction, not investing. If you don't have a strict trading system, liquidation is just a matter of time.
2. Why can you survive with spot trading but not with contracts?
"I’m not afraid if the spot drops 30%, but a 3x contract will liquidate me!" — This statement reveals a fatal flaw in most people's approach: a lack of stop-loss discipline.
You can "play dead" when the spot drops 30% because subconsciously you believe "it will eventually bounce back." But contracts come with forced liquidation; the market won’t give you a chance to "play dead!" How do true experts play?
Calculate your maximum tolerable loss. Set strict stop-losses. Use appropriate leverage to keep losses manageable while magnifying profit potential. 3. The correct use of contracts: a tool for capital efficiency, not a gambling device! The true value of contracts lies in: ✅ Increasing capital utilization ✅ Hedging risks ❌ All-in high-leverage directional bets (unless you want to experience the thrill of "instant zero")
4. Are you suitable for trading contracts? First, ask yourself: Do you have a clear trading strategy? Can you strictly enforce stop-loss discipline? Can your mindset handle instant liquidation? If the answer is no, then stick to spot trading! Contracts are for those with systems and discipline, not for gamblers looking for a "quick path to bankruptcy."
Contracts can be traded, but you must be clear about the risks, control leverage, and strictly adhere to discipline.
Otherwise, you are just a "cash cow" in the eyes of the exchange, waiting to be harvested! 🚨 $AUCTION $SUI $DOGE #特朗普暂停新关税 #币安投票下币 #加密市场反弹
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content.See T&Cs.