The tragic incidents of liquidation in the cryptocurrency contract market unfold every day, yet there are always people rushing in with dreams of 'small bets for big gains.' But the truth is: contracts have never been a game for ordinary players; their brutality exceeds imagination. One, the core root of contract liquidation: four major barriers block 99% of people. 1. Capital management: 90% of people fall into traps right from the start. Behind 0-100x leverage lies the inevitable outcome of 'losing everything in a short time.' Professional players usually control their risk per trade at 2%-3%, while aggressive traders at most 5%-8%; once it exceeds 8%-10%, facing adverse market conditions can lead to a drawdown of nearly 70%, while ordinary people's breaking point often occurs at a 50% loss. The reality is: too many people like to operate with 5x or 10x leverage over periods longer than 4 hours, where the typical stop-loss range is usually 5%-15%, resulting in a single trade risk level of 25%—this is not trading, it's running naked. To control risk under high leverage, one must lower the operational timeframe to 1 hour, 15 minutes, or even 5 minutes. However, the smaller the timeframe, the fewer people can manage it: 1-4 hours is the limit for ordinary players, 5-15 minutes can only be barely managed by professional players, and 1-minute levels are daunting even for most professionals. 2. Trading system: don’t talk about profits if you haven’t endured '9 tuition fees.' A mature trading system requires long-term accumulation and iteration, necessitating experiences through bull and bear markets, volatile markets, and the trials of altcoins versus mainstream coins. A qualified mark is: only trade within the defined model, with clear conditions, and absolutely no impulse trading. In this process, 'tuition fees' are unavoidable. The T+0 nature of leveraged trading amplifies the frequency of operations, meaning you need to prepare '90% × 9' as trial-and-error costs — many people come in with hundreds of thousands, unaware that no matter the principal amount, it’s only enough for one tuition fee, with 8 more challenges awaiting. The correct approach is: start with a few hundred or a few thousand yuan, withdraw profits, and always use small amounts to refine the system. Those who come in with heavy positions, the so-called 'losses,' are merely engaging in blind gambling without even touching the door. 3. Execution: in the face of black swan events, one stroke of luck can lead to total loss. Events like the '519' incident in 2021 and the LUNA collapse can wipe out all previous profits. The core of liquidation isn’t a lack of strict stop-loss, but rather the gambler mentality of trying to catch a bottom against the trend — there are always people who fantasize about 'betting everything in one go' on low-probability events, often leading to irretrievable outcomes. 4. Time and experience: ordinary retail investors simply cannot afford to wait. A complete cycle of bull and bear markets requires familiarity with the characteristics of different stages, along with the ability to flexibly adjust strategies based on market conditions. However, ordinary retail investors have limited time to invest; in this highly specialized market, it’s akin to 'amateur players challenging professional leagues,' with minuscule chances of success. Two, five survival tips for ordinary people.
Small capital trial and error: start with a few hundred or a few thousand yuan, withdraw profits once you gain, and hone your skills at minimal cost.
Leverage should not exceed 3 times: plan your capital based on the correct view of the larger cycle; you may try rolling contracts, but never be greedy for high multiples.
Stick to larger cycles: only engage in 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 your conditions are insufficient, don’t engage in contract short-term trading, and don’t expect to make a career out of contracts — the opportunity cost of this path is far greater than setting up a stall or doing side jobs.
Capital limit of 20,000 yuan: do not invest more than 20,000 before completing the previous four items, and it must be 'spending money that you won’t regret losing.'
Three, the brutal truth: contracts are more 'predatory' than you think.
Compared to manual trading and spot trading, the results of contracts are much more brutal. The 'myths of getting rich' at the top of the pyramid are merely bait to attract retail investors — 'One general's success leaves countless bones behind,' and the vast majority become the denominator.
With 2000 yuan in my pocket, why insist on trading contracts? Earning 20,000 yuan from a tenfold increase in a year is still less reliable than setting up a street stall for a month. Don’t get stuck in the mindset of 'I have to make it work.' It’s crucial to act within your means based on your own conditions; that's the biggest responsibility to your wallet.
Remember: light positions, follow the trend, stop loss — these six words are the only way to survive in the contract market.
