How to trade contracts? You must understand these things before liquidation!
Many people who just entered the cryptocurrency world are full of fantasies about contracts, thinking that by adding some leverage they can double their money overnight. But the reality is often: a sudden spike, liquidation, and you're out.
For example, on January 3, 2024, when negative news about Bitcoin ETFs broke, BTC instantly dropped 10%, and altcoins fell directly by 20%. If you were using 10x leverage? Sorry, you just went to 'zero'. But if you held spot, you could endure and still see the rebound.
So, it's not that contracts can't be traded, but you need to understand these things before you act!
Basic knowledge of contracts must be understood:
Isolated Margin / Cross Margin: Does the loss affect a single position or the entire account? Funding Rate: Holding positions long-term incurs costs, which beginners often overlook.
Leverage Ratio / Position Limits: A higher ratio is not always better; high leverage is more prone to liquidation.
Transaction Fees / Position Size / Long-Short Ratio: These affect your trading costs and market judgement. If you don’t understand, look it up yourself; don’t be lazy about the basics, no one will be responsible for your liquidation.
I mainly trade intraday trend positions on 15-minute K-lines, with small positions + high-frequency operations, executing hundreds of trades daily, relying on discipline + a sense of rhythm.
During the ORDI and SOL market trends, I made over $18,000 in a single day, growing my account from 400,000 to over 700,000, not through dreams of sudden wealth, but through: small positions, selecting hot trends, high-frequency trades, and always following up on take profit and stop loss!
Not setting a stop loss? You will eventually face liquidation.
Don't be fooled by sudden price spikes; there are too many tragic cases of mutual liquidation. You sleep, it drops 20%, and liquidation comes knocking, leaving you no chance to cry.
Don't hold positions in trend trading!
Once emotional consensus forms, a 100% rise or fall is not a dream. For example, TRB, which surged from 120 to over 700 in just 10 days, left short sellers with no chance to react.
Don’t ignore transaction fees; for high-frequency trading, make sure to find a rebate channel.
Otherwise, a bunch of small profits will be wiped out.
The bottom line of contract trading:
Enter the market when there’s momentum! Hold positions when there’s a stop loss! Operate when there’s a system!
Don’t gamble with your life, don’t use your capital for emotional venting.
Contracts are tools for making money, not a stage for gambling. If you don't understand, don’t sit at the table.
Are you still stumbling around the path of contracts? I've walked through these pitfalls; if you don’t want to repeat the mistakes, like + follow Buddha Master!
