If you are a beginner just starting with cryptocurrencies, curious yet afraid of the term "contract trading", this article will quickly guide you through the core gameplay of contract trading in the most straightforward way. Just like learning the rules of a new game, we will proceed in three steps: understand the rules, learn about the equipment, and master the strategies.

I. What is Contract Trading?

Imagine you are betting with a friend on tomorrow's weather: if it rains, you win 100 bucks; if it's sunny, your friend wins 100 bucks. Contract trading is essentially such a betting agreement, only that the bet is on the price trend of cryptocurrencies.

Core Three Elements:

1. Leverage: Equivalent to an equipment enhancer in a game, using 1 yuan of capital to leverage 10, 50, or even 100 yuan of trading capital (mainstream exchanges offer 3-100x leverage).

2. Margin Mechanism: Like a rental deposit, you need to deposit initial funds as collateral (minimum 5 dollars for USDT contracts).

3. Bidirectional: Choose "Long" for bullish positions and "Short" for bearish positions, available for trading 24 hours.

II. 5 Key Operations Every Beginner Must Know

1. Opening a position is like buying a ticket:

- Choose BTC/USDT perpetual contracts.

- Click "Buy Long" or "Sell Short".

- Set leverage (recommended for beginners to start with 5x).

2. Margin Calculator:

Assuming you use 100U capital to open a long position on BTC with 10x leverage.

Actual usable amount = 100U × 10 = 1000U

When BTC rises by 1%, profit = 1000U × 1% = 10U (return rate 10%).

3. Forced liquidation red line:

If the maintenance margin rate is below the exchange's requirement (usually 0.5%-1%), it will lead to liquidation.

Formula: Liquidation Price = Opening Price × (1 ± Leverage Multiplier × Maintenance Margin Rate)

4. Take Profit and Stop Loss Settings:

It is recommended for beginners to set for each trade:

- Stop Loss Line: 2-3% of capital.

- Take Profit Line: 5-8% of capital.

5. Golden Rules of Position Management:

- No single trade should exceed 5% of total funds.

- Do not hold more than 3 varieties at the same time.

- Leverage is inversely proportional to position size (high leverage with low position size).

III. Pitfall Secrets That Experienced Traders Won't Tell You

Fatal Misconception 1: The higher the leverage, the faster the profits.

- Under 10x leverage, a 1% fluctuation in BTC equals a 10% fluctuation in the account.

- At 100x leverage, a 1% fluctuation directly leads to liquidation.

- Real case: The 2021 LUNA crash led to zero balance for 100x leveraged traders in one hour.

Fatal Misconception 2: Frequent trading can seize opportunities.

- Each trade incurs a fee of 0.05%-0.1%.

- Trading 10 times a day can lead to monthly fees as high as 15%-30%.

- Data shows: 92% of users making more than 50 trades per month incur losses.

Fatal Misconception 3: Following expert calls will make you money.

- The trader may be holding both long and short positions simultaneously.

- Delayed execution leads to slippage losses.

- In 2023, a certain KOL called for ETH, with followers averaging a 37% loss.

Survival Rule:

1. Practice on a demo account for 1 month before trading live.

2. Prepare 3 independent accounts: 10% for practice / 30% for main trading / 60% for backup.

3. Record trading logs daily, noting the rationale behind each trade.

Conclusion:

Contract trading is essentially a probability game; professional traders typically have a win rate of only 55%-60%. Remember this core formula: Long-term profit = (Win Rate × Average Profit) - (Loss Rate × Average Loss). In the beginner stage, it's advisable to set a goal of "keeping monthly losses within 5%"; once you can achieve this for three consecutive months, you will truly step into the world of contract trading. Always remember: the market is never short of opportunities, but lacks traders who can survive.