In fact, it's not that 'contracts can't be touched', but that most people are simply not qualified to trade contracts.
Contracts are not just high-leverage gambling tools with 100x or 125x. For those who truly understand how to use them, contracts are a tool to enhance capital efficiency. The problem is — most people are playing gambling-style contracts.
🚨 High leverage ≠ trading, it's pure gambling
Why is high-leverage contracts considered self-destructive?
It's simple, high leverage means that even a small fluctuation can lead to liquidation. Even if you only bet in the right direction, getting 'spiked' once could instantly wipe you out.
So if you take a few hundred bucks to play around, that's understandable. But if you go all-in with high leverage, that's not speculation; it's pure suicide.
💡 The essence of contracts is: improve capital efficiency.
The significance of contracts is to allow you to:
Allocate more cryptocurrencies in a bull market.
Amplify returns at points with a high win rate.
Precisely control your risk exposure.
The cost of perpetual contracts is the funding rate, while delivery contracts have premium differences, sometimes even negative costs. But the premise is: you know what you're doing.
❌ Why can't most people 'play contracts well'?
Because they lack:
Trading system.
Risk control awareness.
Stop loss mechanism.
Like to hold positions; if it blows up, just switch to another coin and continue.
For example, he says: 'It doesn't matter if the spot drops 30%, but I got liquidated with a 3x contract.' This is typical gambler logic. You shouldn't ask 'Are contracts dangerous?', but rather 'Do you have the ability to handle them?'.
✅ How to open contracts as a rational trader?
Contracts are for those who have a plan, can bear risks, and understand stop losses.
For example:
You have 10,000 USDT.
The current price of BTC is 100,500.
You judge that 100,000 is strong support; set a stop loss below that.
You are willing to accept a maximum loss of 1,000 USDT.
Then you can open a 20x long position and set a stop loss to exit when it drops below 100,000.
This is scientific contract operation: controllable losses, clear risk-reward ratio, and high capital efficiency.
On the contrary, if you don't set stop losses and stubbornly hold on, when it drops to 95,000, you will be liquidated to zero.
🎯 Two major scenarios for using contracts:
Enhance allocation, improve capital utilization.
The bull market is rising across the board.
You only have 20,000 USDT, but want to hold multiple cryptocurrencies.
You can reasonably use 2-3x leverage and spread positions across multiple assets.
Low-cost shorting for risk hedging.
High-level fluctuations, unwilling to sell the spot.
You can short contracts of equal value in small amounts for hedging protection.
✅ Final summary:
Contracts themselves are not dangerous; what's dangerous is how people misuse them.
If you can do this:
Set stop losses in advance, don't hold positions.
Control your position well and clarify your maximum loss.
Have a system, discipline, and review.
Then contracts are a tool to amplify returns and improve efficiency.
Otherwise, it will be your fast track to liquidation.
Don't treat the market as a casino, and don't treat contracts as a way to recover losses. You are not here to gamble your life, but to make money.
