Many people say 'Don't trade contracts in cryptocurrency', the core reason lies in the high-risk characteristics of contract trading, especially under high leverage where risks can be extremely magnified. This can be understood from the following aspects:

1. Leverage amplifies risks, easily leading to liquidation

Capital utilization rate ≠ no risk: The leverage of contracts (such as 100X, 125X) can amplify profits, but it also greatly magnifies losses. For example, under 100X leverage, a 1% fluctuation in coin price could wipe out the principal, and market 'spikes' (significant price fluctuations in a short period) are very common, potentially triggering liquidation in just a few seconds, leaving no time to react.

2. Increased trading costs and mechanisms add risk

Perpetual contracts incur 'funding fees' every day, and delivery contracts have 'premiums', meaning the longer the position is held, the higher the costs, which is equivalent to 'hidden losses'.

Many people trade contracts without setting stop-losses, thinking 'a 30% drop in spot prices is okay', but under contract leverage, a 30% fluctuation could directly bring the principal to zero (for example, with 3x leverage, a 33% drop leads to liquidation), and while holding the position, one may also be forced to cut losses due to margin call pressure.

3. Most people lack a trading system and discipline

Treating contracts like gambling: Under high leverage, the short-term fluctuations are strongly random, and many people go all in without understanding the rules, essentially betting on price movements instead of trading rationally. For instance, believing that 'the support level won't break' and going all in long, once the level breaks, it leads to immediate liquidation, without considering risk tolerance.

Long-term investment is not suitable for contracts: Long-term investment should ignore short-term fluctuations, but contracts have holding costs, and if held long-term, price fluctuations + accumulated costs lead to risks far exceeding those in spot trading, even potentially resulting in 'making money while prices go up'.

4. Preconditions for playing contracts reasonably

If one insists on trading contracts, it is essential to meet the following conditions: Clearly define the maximum loss range: For example, with a capital of $100,000, one can tolerate a $10,000 loss, and then calculate position size based on leverage (e.g., 20x leverage, at most opening 5,000 oil positions, stop-loss at 20% drop, resulting in a loss of exactly $1,000).

Low leverage + strict stop-loss: Leverage should not exceed 3x, and every trade must have a stop-loss set, never holding positions, treating contracts as a tool to 'increase capital utilization' (e.g., lightly going long in a bull market, rather than as a gambler's 'get-rich-quick scheme').

Contracts are essentially tools for professional traders to hedge risks or optimize capital efficiency, but for ordinary players, factors like high leverage, trading costs, and market volatility can turn it into a 'graveyard for gamblers'.