Why do some people say that trading cryptocurrencies should not involve contracts?

Contracts do not only have two options of 100x and 125x.

It's easy to get liquidated. How big is that liquidation?

In fact, high-leverage contracts are pure gambling.

Of course, if you're playing with a few hundred dollars, it doesn't matter much. But if you go all-in on high leverage, that's purely a suicidal act.

To put it simply, contracts are meant to increase your capital efficiency. The cost of perpetual contracts is funding fees, while the cost of delivery contracts is premium. Of course, this cost can be 0 or even negative. I won't elaborate on that here. $ETH

Many people do not have their own trading system and have poor risk tolerance. They lack strict trading discipline and prefer to hold positions. So they feel that a 30% drop in spot trading is not a problem for them, but a three-times contract might wipe them out. $BTC

This is completely wrong. First of all, being able to tolerate a 30% loss indicates that you do not have strict trading discipline, and you are purely gambling in the market. You might say you are a long-term investor, but long-term investors should not open contracts due to the costs and increased risks.

If you have strict stop-losses and can bear the loss of this wrong trade, that is your reason for opening contracts. #炒币日记

For example, if you have 100,000 and the current price of BTC is 100,500, you believe that 100,000 is an important support level and won't break. If it does break, you will stop-loss. You can tolerate a loss of 10,000 and are willing to take that cost to gamble, you might consider opening 20x leverage to gamble. This way, if you’re wrong, it’s within your loss limit. However, if you don't have a stop-loss, when it drops to 95,000, you have already been liquidated and lost everything. #币圈暴富

So have you understood? When opening contracts, you must know what your maximum loss is and stay within your tolerance range. #比特币走势分析

Or it is to increase capital efficiency, knowing that we are currently in a bull market where all coins are rising, and large corrections are not easy to occur.

To increase capital efficiency, you can use leverage of no more than 3 times to allocate different cryptocurrencies. That is also reasonable. #币安Alpha上新

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