If you have 100 yuan and use 10x leverage to go long on Bitcoin, when Bitcoin rises by 10%, you earn 100 yuan, and your funds are directly doubled. This sounds great, but why does it happen? Today, let's talk about the underlying logic of contract trading.

What exactly is a contract?

In the crypto world, contract trading is essentially a "crypto version of betting against each other." You don't actually buy Bitcoin but gamble with the exchange based on your market judgment. If you're right, you make money; if you're wrong, you could get liquidated and be "kicked out."

Three steps in contracts

Step one, choose a direction: if you think the price will rise, go long; if you think it will fall, go short.

Step two, leverage: 10x leverage means using 100 yuan to control a 1000 yuan trade, but with only a 10% rise or fall, you could either gain everything or lose everything.

Step three, monitor and set take-profit and stop-loss: not setting stop-loss means handing your account over to fate.

Leverage is a double-edged sword

With 10x leverage, a 10% rise means you earn 100%, while a 10% drop means you lose your entire principal. Profits can double quickly, but losses can also go to zero in an instant. You can think of it as a high-speed sports car: fast but with high risk of losing control.

How should beginners play?

If you can consistently judge the market and withstand volatility, contracts could be your "wealth accelerator." But for most people, it's recommended to practice on a demo account first to familiarize yourself with the rules before gradually entering real trading.

In summary: The essence of contracts is legal gambling, and leverage is an accelerator. Used well, it can amplify profits; used poorly, it amplifies risks. Being cautious and controlling risk is always the first lesson for contract players.

Follow me, the market is just the right time to make money; if you don’t follow now, when will you?