When trading short-term contracts, the core consideration for selecting targets is usually:

Liquidity & Cost

Volatility & Trading Opportunities

Risk Control & Leverage Management

I. BTC/ETH

Advantages

  • Deep Liquidity: Perpetual contracts have the highest trading volume, very narrow bid-ask spreads, and low slippage.

  • Relatively Stable Funding Rates: Funding rate fluctuations are predictable, facilitating long/short arbitrage.

  • Mature Trading Ecosystem: Major exchanges (Binance, FTX, OKX, Bybit, etc.) have mature quantitative tools and signal support.

Disadvantages

  • Limited Volatility: Daily price fluctuations are usually around 2-5%, making opportunities relatively 'small' under high leverage.

  • High Competition: Large traders and quantitative funds are dense, making it difficult to continuously exploit 'price differences' or 'arbitrage opportunities'.

II. Altcoins (especially small to mid-cap coins)

Advantages

  • High Volatility: Daily fluctuations of 10-20% are not uncommon, and high leverage amplifies both gains (or losses).

  • Event-Driven: New listings, airdrops, hot lending products, liquidation waves... news-driven short-term opportunities abound.

Disadvantages

  • Liquidity Risk: Limited depth, large positions are prone to slippage/triggering liquidation chains, especially during rapid one-sided movements.

  • Market Manipulation & Trading: Small and medium coins are more easily manipulated by 'whales' who can intentionally support, pump, suppress, or crash to harvest retail investors.

  • Severe Funding Rate Fluctuations: Extremely high long-short rates can sometimes occur, causing liquidation costs to skyrocket.

III. Practical Recommendations

  • Beginners or Conservative Traders → BTC/ETH

Choose to use low leverage (≤10×) for intraday or cross-period arbitrage (e.g. funding rate differentials) based on small fluctuations.

Strict Stop-Loss (e.g. 1-2%), retain sufficient margin to handle strong volatility.

  • Experienced or Aggressive Traders → Altcoins

Select high liquidity, large market cap (top 20) projects, and avoid 'hot coins' that have just been listed for a few days.

Position Control: Each position should not exceed 5-10% of total capital to avoid being washed out due to insufficient liquidity.

Do not blindly chase highs: Refer to on-chain/community popularity and short positions, and combine with technical analysis (e.g. exit if key support is broken).

  • Mixed Strategies

Main positions in BTC/ETH, use stable long-short trading or arbitrage to obtain basic returns.

Occasionally take small positions in altcoins to capture single-cycle hot market trends, but always set stop-loss and target levels in advance.

  • Risk Control Tools

Limit Orders First: Reduce slippage by setting limit orders for buying and selling.

Automatic Stop-Loss: Once the loss threshold (e.g. 3-5%) is reached, the system automatically liquidates.

Gradual Entry/Exit: Enter and exit in batches at key price points to reduce the risk of being completely liquidated at once.

IV. Conclusion

If you seek relatively stable, low-cost, low-slippage short-term contract returns, BTC/ETH is recommended.

If you are good at quickly capturing large fluctuations and can strictly implement risk control, you can participate in large market cap altcoins with small positions.

The optimal strategy is often a combination of both: using BTC/ETH as the 'main battlefield' and altcoins as 'high α supplements', allowing for stable gains while occasionally targeting high returns.

Regardless of the path chosen, risk control is always the top priority: stop-loss, position sizing, and information verification are all indispensable.