Many people who just entered the cryptocurrency world want to understand perpetual contracts. Let's discuss what contracts are and how to play them. How to quickly double from 100U.

The article is a bit long, so please read with patience. I hope it can help everyone~

1. Perpetual Contracts and Delivery Contracts

(1) Perpetual contracts are similar to traditional contracts, with the main difference being: perpetual contracts have no expiration or settlement date

(2) Delivery contracts will have a deadline, and will automatically settle at expiration.

(3) Long and Short

(4) 'Long' and 'Short' are two investment strategies

(5) 'Long' refers to the expectation that the asset price will rise, thus buying and holding that asset, hoping to sell it later at a higher price to gain profit. This is the most common investment strategy. In the cryptocurrency world, going long is also called 'bullish'.

(6) 'Short' is the opposite strategy to 'Long', expecting the asset price to fall. The short strategy usually involves borrowing the asset and selling it immediately, then waiting for the price to drop before buying back at a lower price, returning the borrowed asset, and making the price difference as profit. This strategy is also applied in stock and futures markets. In the cryptocurrency world, it is also called 'short'.

(7) Shorting usually occurs in contract/futures trading.

Fun Fact: Going long is profitable for most people / Going short is not.

2. Leverage Multiplier

(1) Leverage is a very important concept. In simple terms, it means using a smaller amount of capital to leverage a larger investment amount, thus obtaining higher returns.

For example: Xiao Ming has a principal of 1000, but he thinks the return on this principal is too slow, so he uses 10x leverage. At this point, his principal can be magnified to 10000 for operations. If the price rises, his return will be higher than if he hadn't used leverage.

High returns come with high risks, and leverage is a double-edged sword. If the investment fails, the losses will be greater than if leverage had not been used. Therefore, using leverage requires caution and a full understanding of the risks.

3. Contract Trading Mindset

(1) Funding Rate Arbitrage Same coin's perpetual contract vs. spot/quarterly contract, - Observe OKX premium > 0.03%/8h contract

- Open a short perpetual + buy spot (or quarterly) Wait for settlement to receive Funding - Leverage ≤ 3×, Position Holding 1-3 days rolling.

(2) News/Data 'First Knife' (Non-farm, CPI, ETF inflows, etc.) - Prepare buy and sell orders 0.3% outside 5 min in advance - When volatility comes, eat the liquidity gap and then instantly close half the position - Use trailing stop loss to lock in profit for the remaining half position.

(3) 15 m EMA + Volume Breakthrough Scalping - Chart 15 m, EMA-8/21 Golden Cross + Volume > Average Volume × 1.5 - Use 1×ATR for Stop Loss / 1.8×ATR for Take Profit - Same Direction Cooling ≥ 2 K, Avoid Repeatedly Increasing Positions

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