Let's be clear: In the cryptocurrency world, contract trading absolutely ranks high in risk. Today, we're not talking about how to make money; we're discussing the basic knowledge and the lessons that can lead to crying losses, helping you understand just how big the risks are. Remember, this is not advice for entering the market; if you really want to play, you must do your homework and assess whether you can bear the losses!
First, understand the rules, then think about how to operate.
The difference between perpetual and delivery contracts: The most common for beginners is the perpetual contract, which has no expiration date and is relatively simple to operate, but it also means that as long as you hold it, the risk follows you. Delivery contracts are different; they have fixed settlement dates, and the intricacies are more complex, so beginners should ideally avoid them for now.
Leverage can help you or harm you: This is definitely the riskiest area! Leverage can allow you to earn more when you profit, but you can also lose much more when you lose, sometimes several times over! Sometimes, just a small movement in the market can lead to significant losses. Beginners should definitely try the lowest leverage to understand just how 'ferocious' it is before considering increasing leverage.
A stop-loss is your 'lifeline': You must set a stop-loss! This is the only way to control how much you lose in a single trade and to protect your principal! You need to set a reasonable stop-loss range based on your situation, and once set, you must strictly enforce it; don’t be soft-hearted.
Choose your platform carefully: Safety is always the top priority! You must select large platforms that have been around for many years, have a good reputation, and are regulated (if possible). Also, carefully compare costs like fees and funding rates, and don’t be caught by high costs. Smaller platforms can run away at any time, and the risks are particularly high!
Second, manage risk well; surviving is more important than anything else.
Don't 'stubbornly hold on'; if it's time to cut losses, cut them: Once you reach the stop-loss point, leave quickly, don't think the market will turn around. Protecting your principal is the most important thing; don't hold onto fantasies, the longer you hold on, the more you may lose.
Don't be tempted by high leverage: Those leverages that far exceed your capacity are the 'fast track' to quick liquidation! Data shows that accounts that have used high leverage have a particularly high probability of liquidation! Greed will only harm you; you must exercise restraint.
Never 'go all in': No matter how optimistic you are about a coin, always leave enough spare funds, at least 30% or more, as a risk buffer. The market is unpredictable, so give yourself an exit strategy and don’t invest all your money.
Third, these red lines must not be crossed!
Don't touch those skyrocketing 'meme coins': Some coins suddenly rise sharply in a short time, which often hides huge risks. If you enter, you may very well become the 'bag holder' and end up losing everything.
Don't use high leverage to 'go all in': This is the fastest way to get liquidated, and it's not much different from gambling; you absolutely cannot do this.
Don't trade without setting a stop-loss: Not even setting a stop-loss shows irresponsibility towards your money, and you will eventually suffer severe losses.
Lastly, a reminder: The cryptocurrency market is particularly risky; prices fluctuate wildly, and if you're not careful, you could lose all your principal, or even owe money to the platform. This article is meant to educate you, sharing common knowledge and risk points in the market, not as an invitation to enter the market. If you really want to participate in trading, you must make your own decisions based on your financial situation, investment experience, and risk tolerance; don’t just follow along with the crowd. Before engaging in any trading, it is strongly recommended that you study thoroughly and understand all the risks involved. Entering the market has risks; trading must be done with extreme caution!