In March 2025, a myth circulated in the crypto world about a '95-born nurse turning 5000 yuan into 100 times in 7 days': she used 5000 yuan principal to go long Bitcoin with 10x leverage, closing at 38,000 after rising from 28,000, netting a profit of 50,000 yuan. But on the same day, Shanghai white-collar worker Xiao Wang faced liquidation due to holding positions, losing 100,000 yuan—this is the magical reality of contract trading: some achieve class leaps through it, while more become 'liquidation cannon fodder'.

As the 'risk ceiling' of the crypto world, contract trading is like a leveraged roller coaster, capable of amplifying returns by 10 times, but also able to reduce your principal to zero instantly. But by mastering 5 core iron rules, beginners can seize opportunities for wealth during sharp drops and surges while controlling risk.

This article will use language understandable even in a vegetable market to reveal the underlying logic and practical skills of contract trading.

1. What is a contract? A 'bet on rising or falling' game simpler than buying vegetables.

1. Contracts vs Spot: The essential difference is like 'paying a deposit to order'.

Spot Trading: You spend 100 yuan to buy an apple, sell it at 150 yuan, making a profit of 50 yuan (50% return).

Contract trading: You pay a 10 yuan deposit (margin), betting that apples will rise in price. If it rises to 150 yuan, the platform settles at 100 yuan, and you earn 50 yuan (5 times your principal); but if it falls to 90 yuan, the platform forces liquidation, and you lose 10 yuan of principal (liquidation).

Core Principle: Using a small amount of margin to leverage 'full amount trading', amplifying both profits and risks (leverage multiplier = total amount / margin, e.g., 10x leverage = 10 yuan margin buys 100 yuan of assets).

2. Going Long vs Going Short: Opportunities for 'dual-direction profit' based on bullish or bearish sentiments.

Going Long: Believing that the coin price will rise, buy the contract at a low price and sell it at a high price after it rises (e.g., going long on Bitcoin at 30,000 and closing at 40,000 for a profit of 10,000 per contract).

Going Short: Believing that the coin price will fall, sell the contract at a high price and buy it back at a low price for profit (e.g., going short on Bitcoin at 40,000 and closing at 30,000 for a profit of 10,000 per contract).

Heaven-defying Advantage: You can make money in both bull and bear markets; when the coin price drops by 30%, those who go short can earn 300% (under 10x leverage).

2. 3 Core Concepts Every Beginner Must Learn: Understand these 3 points to lose 80% less of your principal.

1. Leverage: It is not a double-edged sword, but a 'dragon-slaying knife'.

Common Leverage: 10x (low risk), 50x (medium), 100x (for experts only).

Deadly Misconception: 100x leverage ≠ earning 100 times, but 'a 1% fluctuation can wipe out 100% of your principal' (e.g., under 100x leverage, with 10,000 yuan principal buying 1 million assets, a 1% drop results in a 10,000 loss, leading to liquidation).

Iron Rule: Beginners should only use 10-20x leverage, while veterans should not exceed 50x (2023 statistics: 99% of users using 100x leverage face liquidation within 3 months).

2. Stop Loss and Take Profit: The 'lifeline' more important than making money.

Stop Loss: Set 'how much loss must you run away' in advance (e.g., with a principal of 10,000, set a stop loss at 5%, automatically close the position at a loss of 500 yuan, to avoid holding until liquidation).

Take Profit: Automatically cash out after reaching the target profit (e.g., if you expect to gain 20%, sell forcibly after making 2000 yuan to avoid losses from a market reversal).

Real case: In 2024, Bitcoin crashed 30%, users who set a 10% stop loss only lost 10% of their principal, while those who didn't set a stop loss went to zero.

3. Funding Rate: The 'hidden mechanism' to earn money from the opposing side without effort.

Principle: When long and short positions are unbalanced (e.g., 80% of users are long), the platform makes long position users pay funding fees to short position users, and vice versa.

Practical Skills: In extreme market conditions (e.g., Bitcoin breaking through key resistance), open a small reverse position to earn funding fees, making daily profits of 0.1%-1% (data from a certain platform in 2025: long-term users who earn funding fees have stable annualized returns of 15%).


3. Practical Tutorial: From account opening to placing orders, mastering contract trading in 5 steps.

1. Choose the right platform: Avoid 'profit-eating' platforms.

First Choice: Binance (low fees, good depth, no lag), avoid small platforms (in 2023, a certain platform caused users to collectively face liquidation due to malicious price manipulation).

Key Indicators: Check 'funding amount' (over 1 billion USD), 'number of positions' (over 500,000), and 'historical price manipulation records' (the fewer, the better).

2. Position Control: Use the '1% Rule' to protect your principal.

Single Position: Each opening should not exceed 1% of total funds (e.g., with 100,000 yuan principal, each opening should not exceed 1,000 yuan margin).

Total Position Limit: All contract position margins should not exceed 20% of total funds (to avoid simultaneous liquidation of long and short positions). For example: with 10,000 yuan principal and 10x leverage, single position margin ≤ 100 yuan (corresponding to 1000 yuan contract value), total position margin ≤ 2000 yuan.

3. Technical Analysis: 3 crucial indicators to help you determine direction.

MA Moving Averages: The 50-day moving average crosses above the 100-day moving average (golden cross), bullish; crosses below (death cross), bearish.

MACD: Red bars lengthen (bullish strength), green bars lengthen (bearish strength), divergence signals (price rises while volume decreases, may indicate a peak).

Support and Resistance: Check previous highs and lows (e.g., Bitcoin at 32,000 is strong support, 40,000 is strong resistance), open positions in the direction after a breakout.

4. Order Placement Skills: Seize the golden opportunity during 'sharp drops and surges'.

Going Long on a Drop: If the price drops more than 5% in a short time and hits a strong support level (e.g., in May 2025, Bitcoin dropped to 28,000, rebounding 2% within 30 minutes, going long could earn 20%).

Going Short on a Surge: If the price rises more than 10% in a short time and reaches a resistance level (e.g., if Bitcoin fails to reach 45,000 and quickly falls back, going short can earn 15% within an hour).

Taboo: Do not open positions during sideways consolidation (70% of the time in consolidation, frequent operations are bound to lose).

5. Closing Strategy: The money you've earned is real money.

Target Achievement and Closing: Immediately take profit upon reaching preset returns (e.g., 20%), without greed.

Breakout Stop Loss: If the price breaks below support or above resistance, stop loss unconditionally (e.g., if the price falls below a previous low after going long, exit immediately, don't bet on a rebound).

Time Stop Loss: If the position exceeds 4 hours without reaching expectations, forcibly close the position (to avoid staying up all night watching the market, 2023 statistics: users with positions over 12 hours have a liquidation rate increased by 3 times).

4. 5 Major Death Traps Beginners Must Avoid.

1. Blind trading without watching the news: Policies can instantly halve the coin price.

In 2024, Hong Kong tightens cryptocurrency regulation, Bitcoin falls 15% in 2 hours, and users who didn't check the news directly face liquidation.

Correct Approach: Spend 5 minutes daily reading 'Crypto Market Morning Report' to avoid policy black swans.

2. Holding on against the trend: the 'liquidation accelerator' that leads to increasing losses.

Wrong Case: Xiao Wang went long on Bitcoin at 40,000, did not stop loss when it fell to 35,000, but instead increased the position, ultimately facing liquidation at 30,000, losing 100,000 principal.

Iron Rule 2: Never hold onto positions! Immediately close positions that break the stop loss line, keep the principal intact, and don't fear running out of funds.

3. Frequent Trading: Fees eat up 80% of profits.

A certain user traded 50 times in a month, spent 12,000 on fees, and ended up with only 5,000 in profit, losing 7,000.

Best Frequency: Operate no more than 3 times a week, just catch key market movements.

4. Emotional Trading: The vicious cycle of making money and increasing positions, losing money and averaging down.

When making money, you feel like 'the Buffett of the crypto world', adding 100x leverage; when losing money, you just want to 'break even', constantly averaging down, ultimately falling into the abyss.

Iron Rule 3: Write your trading plan on paper, strictly execute it, and do not be influenced by emotions.

5. 3 Advanced Strategies Used by Experts.

1. Hedging Strategy: A 'sure-win formula' that profits from both rising and falling markets.

Operation: Open both 10x long and 10x short positions simultaneously (each occupying 5% of the position), when the price fluctuates over 2%, close the losing position and hold the profitable one.

Case Study: Bitcoin oscillates between 30,000 and 40,000, using a hedging strategy to earn 5%-10% each month with almost zero risk.

2. Laddered Position Increase: The 'bottom-fishing artifact' during sharp drops.

Steps: If the price drops 10%, open a 1% position long; if it drops another 10%, open a 2% position; if it drops another 10%, open a 3% position, and so on.

Advantage: Reduces average cost; a 15% rebound can turn losses into profits (e.g., going long at 30,000, if it drops to 24,000, total position at 6%, a rebound to 27,600 can break even).

3. Capital Management: Use the 'liquidation price calculator' to protect yourself.

Tools: Enter margin, leverage, and position size in the exchange app to automatically calculate the liquidation price (e.g., 10x leverage, 10,000 yuan margin, liquidation price = opening price - opening price × 10%).

Iron Rule 4: Ensure the liquidation price is at least 20% away from the current market price (e.g., if going long on Bitcoin at 30,000, set the liquidation price at 24,000 to leave enough buffer space).

6. Final Advice for Beginners: Contracts are not an ATM, but a battlefield of 'cognitive monetization'.

1. First practice on a demo account: Use 10,000 yuan virtual funds for 3 months.

Recommended platform: Binance 'Contract Simulation Account', 1:1 restores real trading, and can be reset if you lose everything.

Goal: Achieve 'no liquidation within 3 months, win rate over 50%' before entering the real market.

2. Always remember: Contracts are 'the cherry on top', not 'a reversal gamble'.

Correct Mindset: Use no more than 20% of your spare money to trade contracts; your main income is essential (a salaried worker earning 3,000 can use 600 to trade contracts, don't bet your entire fortune).

3. Liquidation is not the end, but the beginning of growth.

Every liquidation is the best teacher: record the reasons for liquidation (was it too much leverage? No stop loss? Or emotional trading?), forming your own 'pitfall guide'.

You are only one 'clear mind' away from doubling your money.

Contract trading is like a leveraged marathon; those who run fast may fall midway, while those who run steadily can laugh until the end. Remember:

10x leverage is not for making 10 times, but to turn a 10% rise into a 100% return.

Stop loss is not cutting losses, but using a 10% loss to protect 90% of your principal.

A true expert is not someone with a 100% win rate, but someone who uses strict discipline to ensure that they make more money than they lose.

In the contract market, surviving is more important than anything else; as long as you are alive, you can seize the next opportunity for a 10x surge!

'Contracts are like tigers, leverage is like teeth; only by respecting the market can you tame it!'

Old Bo only does real trading; the team still has space, hurry up.