In the wave of cryptocurrency trading, perpetual contracts, as an emerging derivative, are attracting countless investors with their unique trading mechanism. Unlike traditional futures contracts that have expiration and delivery, perpetual contracts allow traders to hold positions indefinitely without being liquidated, making it a popular choice in the market. However, high returns often come with high risks, and one of the most critical issues is the choice of leverage.

Many beginners and even some experienced investors find themselves confused when it comes to choosing leverage. A fellow trader once revealed to me that he usually uses 30x or 50x leverage in his daily trades. Taking Bitcoin as an example, opening 30x leverage requires 16U margin, 50x requires 10U, while 100x only needs 5U. In his view, lower leverage seems safer. But my perspective is quite different: under the same market conditions, I prefer to choose 100x leverage. There is profound trading logic behind this choice.

The essence of leveraged trading is to achieve higher returns by amplifying the utilization of funds, but it also amplifies the risks. Whether it is 1x or 100x leverage, using leverage inherently involves risk. However, the differences in return and cost between the two are significant. For example, with 1x leverage on Bitcoin, the cost per contract can be over 470 U, and in a stable market, it is difficult to profit while also incurring transaction fees. In contrast, 100x leverage uses a small amount of margin to leverage a larger amount of capital, enabling higher returns under the same market fluctuations.
Of course, choosing high leverage does not mean blindly taking risks. A common mistake many investors make is participating in contract trading beyond their capacity with limited funds. Low-margin trading can easily lead to liquidation during significant market fluctuations. Once liquidation occurs, even if the subsequent market moves in a favorable direction, it no longer concerns you. Therefore, having sufficient margin reserves is crucial when trading perpetual contracts. It acts like a lifeboat during navigation, ensuring the safety of your funds when market storms arrive.

In addition to reasonably choosing leverage and margin, risk control is also at the core of perpetual contract trading. The isolated position model is one effective way to reduce risk. It separates position risk from overall capital, preventing losses from a single trade from affecting the entire principal. Additionally, timely stop-losses are a lifesaving rule. In contract trading, holding onto losing positions is often the culprit for massive losses. When the market trend does not align with expectations, decisively cutting losses and exiting is far wiser than blindly persisting.

Moreover, setting reasonable profit targets can help traders maintain rationality. For example, with a principal of 5000U, aim for a daily profit target of 50 - 100U. Although actual trading will be affected by market fluctuations, as long as you maintain discipline and a stable trading rhythm, substantial returns can still be achieved over the long term.

Trading cryptocurrency perpetual contracts is a game of wisdom and risk. By reasonably choosing leverage, ensuring adequate margin reserves, employing scientific risk control, and setting clear profit targets, we can maximize returns and minimize risks in this opportunity-filled market. Remember, in the world of contract trading, survival is always the top priority; only by surviving can we talk about profits.#数字资产法案