Every time I see complaints about “contracts = gambling”, I can’t help but frown - those who have their positions liquidated are never harvested by the market, but are pushed into the abyss by their own “ignorance”.

After three months of real-time trading on Binance, where 5,000 Us have grown to 200,000 Us, there lies a cruel truth that 99% of retail investors cannot understand: the essence of a contract is not to guess the rise and fall, but to use rules to hunt down "emotional counterparties."

Why do you always get liquidated? Because you don’t even understand leverage.

Retail investors make the wrong first move when speculating in futures contracts: staring at the "10x/20x" leverage numbers on the interface, unaware they're already on the verge of liquidation. The key to my profit of 140,000 U was understanding the "deadly deception of leverage"—the "safety factor" you see could be a decoy set by market makers.

Professional players' "death coefficient formula": calculate this correctly, and the liquidation has nothing to do with you

The true leverage is not the number displayed by the exchange, but the mortality factor of "tolerable loss divided by position value". For example:

  • If your account has 10,000 U, your maximum stop loss is 500 U (run away if you lose 5%).

  • If you open a 30,000 U position (apparently 3x leverage), the actual leverage = 30,000 U ÷ 10,000 U = 3x? Wrong!

  • The real mortality coefficient = 500U ÷ 30,000U ≈ 1.67%—— This means that a price fluctuation of 1.67% will cause a margin call, which is equivalent to "implicit 60x leverage"!


Retail investors often gloat over their "5x leverage" claims, but they don't realize that the larger the position and the tighter the stop-loss, the more damaging leverage actually is. I never use a "fixed leverage"; instead, I first calculate my maximum potential loss and then work backwards to determine my position size: With a 5,000U principal and a 250U (5%) stop-loss, I open a 5,000U position (1x apparent leverage) with a true volatility tolerance of 5%. This is what "safe leverage" means.

The Dark Forest of Contracts: Your Liquidation Is My Prey

The futures market has never been about "buy-short betting" but rather an "emotional hunting ground." 99% of profit opportunities lie hidden in the panic and greed of retail investors. While you're groaning at your losses, experts are calculating your liquidation price and preparing to enter the market to reap the rewards.

Three major hunting moments: picking up money from "emotional corpses"

  • After the exchange's price spike: The sharp drop caused a large number of long positions to be liquidated, leaving a long lower shadow on the K-line. At this point, the panic selling had already ended, and the reverse long position had a winning rate of over 70%. When BTC hit 30,000 U in 2024, I watched the surge in liquidation data and decisively entered a long position, making a profit of 12,000 U in 3 hours.

  • During panic selling, the community is filled with cries of "It's over, back to zero!" The Fear and Greed Index (FGI) is below 15, often signaling a short-term bottom. Last year, ETH plummeted from 2,000 to 1,600. Someone in the group shared screenshots of their margin call, and I went long in batches, making a profit of 30,000 ETH in 5 days.

  • Liquidation volume hits record high: Exchange liquidations exceed $1 billion in a single day, indicating that "all that should have collapsed has collapsed," selling pressure is exhausted, and a rebound is imminent. During the 312 crash, I relied on this signal to go long against the trend, avoiding the crash and doubling my profits.


Retail investors always “chase the trend when it’s good”, while experts always “pick up bargains when others’ positions are liquidated” - the money earned from contracts is never earned from the market, but from “emotional counterparties”.

Survivors' bloody math: Using numbers to create an "explosion-proof barrier" for your account

In 3 months, I went from 5,000U to 140,000U. It wasn’t luck, but two life-saving parameters that were ingrained in me. This allowed me not only to survive the 312-style crash, but also to reverse the trend:

1. 5% single death penalty quota: You decide how much you lose

Before every trade, I typed this on my calculator: principal × 5% = maximum stop-loss amount. With a 5,000U principal, I could lose a maximum of 250U per trade. Even if I lost 10 trades in a row, I'd still have 3,750U left, meaning there was always a chance to turn things around.

The retail investors' operation is: "This order must be right", so they open a 50% position casually. If they make a mistake once, they lose half of their money. If they make a mistake again, it will be directly reduced to zero - their stop loss is determined by the market, while mine is set by myself.

2. 2x Revenge Multiplier: Profit must be greater than 2 times the stop loss

Before placing a trade, calculate "how much profit is worth losing": set a stop-loss of 250 units and a take-profit of 500 units or higher (a 2:1 profit-loss ratio). Never trade below this standard. In three months, I passed up 12 seemingly opportunistic market opportunities and only made 23 trades with high profit-loss ratios. While my win rate was only 52%, my profits far outweighed my losses.
Retail investors "run away when they make 100U, and cut their losses when they lose 500U". In the long run, "the profits are not enough to cover the losses". This is not bad luck, but a lack of math skills.

The cruelest cognitive gap: You are looking at the golden cross, I am calculating your liquidation price

The screens of those who have been liquidated are always filled with MACD golden cross and Bollinger Bands closing, and they study "whether the next K-line will rise or fall"; while the screens of winners are filled with "liquidation data, funding rate, long-short ratio", and they calculate "where the retail investors' stop-loss is and when the liquidated shares will emerge."


The truth behind contracts is never “predicting market trends”, but “exploiting human weaknesses”:

  • Retail investors are afraid of missing out, so they chase rising prices and sell falling ones;

  • Retail investors are afraid of losses, so they hold orders without stop-loss orders;

  • Retail investors believe in indicators, so they buy in during false breakouts.


My "slaughter rule" is just the opposite: when they chase the rise, I wait for the pullback; when they hold the order, I calculate the liquidation price; when they believe in indicators, I look at the emotions - use rules to lock in risks, and use patience to wait for prey. This is the whole secret of turning 5,000 U into 140,000 U.

Finally, I want to say: Contracts are not gambling, they are “cognitive crushing games”

Stop complaining about "contracts being a scam." The essence of a margin call is "your understanding doesn't match your ambition." Leverage isn't a monster; used correctly, it's a profit accelerator. The market isn't your enemy; your emotional opponents are your prey.


If you can accept:

  • Calculate the stop loss first and then open a position, rather than opening a position first and then thinking about the stop loss;

  • Wait until the peak of margin calls before entering the market, rather than chasing the trend;

  • Use a 5% position and a 2x profit-loss ratio to protect your life, rather than relying on "feeling" to bet on the size;


Then, for you, contracts aren't a slaughterhouse, they're an ATM. Remember: in the cryptocurrency world, those who survive aren't the most foresighted, but those who best understand the "hunting rules." Your liquidation price could be someone else's entry point—this is the cruelest, yet fairest, truth of contracts.