The liquidation disasters in the crypto contract market happen every day, yet there are always people rushing in with the fantasy of 'betting small to win big.' But the truth is: contracts are not a game prepared for ordinary players; their brutality far exceeds imagination. 1. The core root of contract liquidation: four major thresholds block 99% of people 1. Capital management: 90% of people fall into the pit at the first step. Behind the 0-100 times leverage lies the inevitable outcome of 'losing everything in a short time.' Professional players typically control their single risk at 2%-3%, with aggressive players at most 5%-8%; once it exceeds 8%-10%, facing unfavorable market conditions, the drawdown can approach 70%, while the psychological breakdown point for ordinary people often occurs at a 50% loss. But the reality is: too many people like to operate with 5x or 10x leverage on 4-hour or longer cycles, and the stop-loss range at this level usually lies between 5%-15%, meaning a single risk level has already reached 25% - this is not trading; it’s running naked. To control risk under high leverage, it is necessary to lower the operation level to 1 hour, 15 minutes, or even 5 minutes. However, the smaller the level, the fewer people can manage it: 1-4 hours is the limit for ordinary players, 5-15 minutes can barely be managed by professional players, and 1-minute levels are daunting for most professionals. 2. Trading system: Don't talk about profits if you haven't survived '9 tuition payments.' A mature trading system requires long-term accumulation and iteration, and must undergo multiple baptisms from bull and bear markets, volatile markets, and altcoins vs. mainstream coins. A qualified indicator is: only trade within the established model, with clearly defined conditions, and never act impulsively. In this process, 'tuition' is indispensable. The T+0 feature of leveraged trading will amplify the frequency of operations, meaning you need to prepare a '90%×9' trial-and-error cost - many people start by investing hundreds of thousands without realizing that regardless of the principal, they can only pay tuition once, with 8 more hurdles waiting ahead. The correct approach is: start with a few hundred or few thousand yuan, take profits out quickly, and always use small amounts to refine the system. Those who come in with heavy positions, their so-called 'losses' are just blind gambling; they haven't even touched the door. 3. Execution ability: In front of a black swan, one stroke of luck can bring everything to zero. Events like the '519' incident in 2021 or the LUNA crash are enough to turn all prior profits into nothing. The core of liquidation is not a lack of strict stop-loss, but a gambler's mindset of trying to catch the bottom against the trend - there are always people who fantasize about 'achieving everything in one go,' gambling their lives on low-probability events, resulting in irreversible consequences. 4. Time and experience: Small retail investors simply can't afford to wait. A complete cycle of bull and bear markets requires familiarity with the characteristics of different stages of varieties and the ability to flexibly adjust strategies based on market conditions. However, ordinary retail investors have limited time to invest, and in this highly specialized market, it's like 'amateur players challenging professional leagues,' with very slim chances of success. 2. Five life-saving suggestions for ordinary people.
Small funds for trial and error: Start with a few hundred or few thousand yuan, take profits out quickly, and hone your skills at minimal cost.
Leverage should not exceed 3 times: Plan your capital based on a correct view of the long cycle, and you may attempt rolling positions, but never be greedy for high multiples.
Stick to the long cycle: Only trade at 1-hour, 4-hour, or daily levels, and stay away from high-frequency operations below 5 minutes.
Non-professionals should avoid short-term trading: If conditions are insufficient, don't engage in contract short-term trading, and don't expect to rely on contracts as a profession - the opportunity cost of this path is far greater than street vending or side jobs.
Capital limit of 20,000: Before completing the previous 4 items, the investment must not exceed 20,000, and it must be 'spending money that won't hurt if lost.'
3. The cruel truth: Contracts are more 'consuming' than you think.
Compared to flipping bricks or spot trading, the results of contracts are much harsher. The 'wealth myths' at the top of the pyramid are merely 'bait' to attract retail investors - for every successful general, countless bones are left behind; the vast majority have become the denominator.
Carrying 2,000 in your pocket, and still wanting to trade contracts? Earning 20,000 in a year by multiplying your investment tenfold is not as secure as street vending for a month. Don't get trapped in the 'must make it work' mindset; act according to your own conditions to be most responsible for your wallet.
Remember: Light positions, trend following, stop loss - these six words are the only lifeline in the contract market.
