What exactly is a perpetual contract?

In simple terms: it is like betting on whether the future price of 'something' (like Bitcoin) will rise or fall. But it is not actually buying or selling the asset.

Rather than holding the asset (like Bitcoin spot), it is signing a 'price betting agreement'.

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Where is 'perpetual'? The biggest feature is that there is no expiration date! Unlike traditional futures which have a settlement date (must settle), you can hold it indefinitely.

Your 'bet' allows you to close the position whenever you want (provided you have money).

Goal: To profit from price fluctuations (regardless of rising or falling). Go long if bullish (buy up), go short if bearish (buy down).

2 How does it 'play'? Core mechanism revealed.

Leverage: This is the key to 'getting rich quickly or losing everything!' It allows you to control a much larger amount of capital with a small amount of principal (margin).

Easy. For example, with 100x leverage, 100 can be used as 10,000.

Temptation: A 1% price fluctuation could magnify your profit/loss by 100 times!

Fatal risk: A slight reverse price movement could wipe out your principal (or even leave you in debt)—this is liquidation! Excitement...

Funding rate: This is the secret that allows perpetual contracts to be 'perpetual'!

Function: To keep the contract price closely following the spot price (anchoring).

Principle: Regularly (for example, every 8 hours) settle a small fee between the long and short sides. If market sentiment is bullish...

When there are many people involved, the long side has to pay the short side, encouraging everyone to short and bringing the price back a bit, and vice versa.

Impact on you: While holding a position, you may receive money (positive rate) or pay money (negative rate). Long-term holding costs must consider this!

Is 'playing' perpetual contracts more appropriate to say 'how to survive'?

Important warning: The risks of perpetual contracts are extremely high and not suitable for the vast majority of ordinary investors! Beginners should stay away!

If you fully understand the risks and decide to try, the following are not 'methods', but 'rules for survival':

1. Deeply understand leverage: Start with very low leverage (like 5x, 10x)! High leverage (50x, 100x +) is a path to liquidation.

Fast lane. Don't be misled by stories of 'betting to get rich'; those are survival bias!

2. Strict stop-loss! Stop-loss! Stop-loss! This is a lifeline! You must set a stop-loss order before placing the order. Once the price touches...

And the stop-loss point, the system automatically helps you close the position to limit maximum losses. Never hold onto a position!

3. Only use money you can afford to lose: The funds you invest must be completely idle, and losing all of it should not affect your life. Never...

Borrowing money, taking loans, using living expenses to play contracts!

4. Position management: The margin invested in a single trade should not exceed a small part of the total capital (like 1%-5%). Diversify risks to avoid losing everything in one mistake.

Risk, to avoid losing everything in one mistake.

5. Pay attention to the funding rate: Long-term positions should pay attention to whether the rate is positive or negative, as it affects your holding costs.