Cryptocurrency contract trading is a high-risk, high-reward investment method suitable for investors with a certain understanding of the market. Here are the core points and operation guidelines:
I. Basic Concepts of Contract Trading
Essence: Similar to a betting agreement, predicting cryptocurrency price trends, supporting both long and short operations (choose 'long' for bullish and 'short' for bearish)
Core Mechanism:
Leverage Multiplier: 1 yuan of principal can leverage 10-100 times the capital (mainstream exchanges offer 3-100 times leverage)
Margin: Initial funds need to be deposited as collateral (minimum 5 USD for USDT-based contracts)
24-hour trading: No market closing time restrictions
II. Beginner Operation Process
Platform Selection: Prefer Binance, OKX, and other leading exchanges, must complete two-factor authentication (2FA) and risk assessment
Opening Position Steps:
Transfer USDT to contract account
Choose BTC/USDT perpetual contracts (best liquidity)
Set leverage multiplier (recommended for beginners to be below 5 times)
Profit and Loss Calculation:
100U principal + 10x leverage = 1000U operating amount
The underlying asset fluctuates 1% = account fluctuation of 10U (yield of 10%)
III. Key Points of Risk Management
Liquidation Mechanism:
Triggered when maintenance margin rate is below 0.5%-1%
Calculation formula: Liquidation price = opening price × (1 ± leverage multiplier × maintenance margin rate)
Position Control:
Single trade not exceeding 5% of total funds
Hold no more than 3 varieties simultaneously
High leverage requires low position (e.g., 0.5% position suggested for 100x leverage)
Take Profit and Stop Loss:
It is recommended to set the stop loss line at 2-3% of principal
Take profit line is 5-8% of principal
IV. Contract Type Selection
Coin-Based Contracts:
Using cryptocurrency as margin and settlement currency
Suitable for long-term holders to conduct risk hedging
USDT-Based Contracts:
Settled in stablecoins like USDT
Reduce the impact of cryptocurrency price fluctuations on margin
V. Common Misconceptions Warning
Leverage Trap:
1% fluctuation under 100x leverage means liquidation
Reference Case: The 2021 LUNA crash led to zeroing out for 100x leverage players
Overtrading:
10 trades in one day can lead to monthly fees of 15%-30%
It is recommended to adopt a trend-following strategy
Continuously monitor $BTC ETH PEPE