Contracts in the crypto world can be a money printer if played well, doubling your money in a few days and waking you up with a smile in your dreams; but if you mess it up, it's a meat grinder, wiping you out in one night with nothing left.
But for beginners entering the market, 8 out of 10 end with liquidation. Don’t blame the market for being too harsh; they just stepped into all the traps that every beginner will fall into—
1. Maxing out leverage is like putting your neck on a chopping block.
Starting with 20x or 50x leverage, thinking that higher multiples mean crazier profits? Wrong! With high leverage, if the price moves a few points against you, your position can get forcibly liquidated. This is not trading; it’s clearly a race against the market to see who can’t hold on first, gambling with your life.
2. Going all-in is like pressing the self-destruct button.
Being fully invested in spot trading can at most lead to being trapped, but being fully invested in contracts with high leverage? Pure suicide! Once the direction is wrong, there’s not even a chance to average down; with a single reversal candle, your account can be wiped clean, leaving you with no time to regret.
3. Not setting stop losses? That's sentencing your account to death.
How many people stubbornly hold on despite being directionally wrong, even averaging down to 'reduce costs'? As a result, the market moves in the opposite direction all the way, and losses snowball like a rolling snowball, ultimately getting wiped out by the system with a single click. Remember: stopping losses is not about giving up; it’s your trump card to stay in the game.
4. Bravely going against the trend, before the trend, everyone is like a younger brother.
Placing orders based on feelings, trying to catch the bottom in a downtrend, or even adding positions as the price falls? This is not trading; it's actively throwing yourself into danger. Once a trend is established, high leverage combined with counter-trend trading is a recipe for 100% liquidation, and it's very stable.
5. When the mindset collapses, the trading becomes chaotic.
Wanting to earn more after making a profit, rushing to recover losses after a decline, opening dozens of orders in a day with chaotic operations? It’s a miracle if you don’t get liquidated! Once the mindset collapses, you’ll frantically increase leverage, randomly add positions, and stubbornly hold onto losing trades; even a slight market fluctuation can completely clear you out.
Contracts aren’t untouchable, but their risk is 10 times greater than spot trading. Beginners who want to survive should first learn to manage positions, control risks, and set stop losses. Don’t come in dreaming about 'doubling' right away.
In the cryptocurrency circle, it's not scary to not make money; the scariest thing is not having time to learn your lessons before being completely kicked out of the market—leaving you with no chance to turn things around.
