—— Because the essence of contracts is not gambling, but “legal harvesting.”
You often see someone sharing, “5x leverage is very conservative” or “10x leverage is easy,” but not long after, their account goes to zero.
But why do some people still rush in, knowing the risk of liquidation is extremely high?
Because the real winners in the contract market do not earn money from market fluctuations, but from “risk management.”
### 1. What you think is leverage, is not what you think at all.
Many people think “5x leverage” means risking 5 times the capital, but in reality, the true risk is not the leverage multiplier, but your position management and stop-loss strategy.
- Platform leverage ≠ your actual risk (that is just the platform's risk control indicator)
- True leverage = your position / principal (for example, if your total position is 4 times your principal, then your risk is 4 times)
- The core reason for liquidation is not high leverage, but uncontrolled position.
### 2. The true profit logic of the contract market: Others get liquidated, you make money.
In the spot market, you earn money from the price increase of coins; but in the contract market, you earn money from “other people's liquidations.”
- When the market fluctuates violently, high-leverage players will be forcibly liquidated; their losses become your profit source.
- If you can control risk, when others get liquidated, you can actually benefit from “liquidity premiums.”
So, contracts are not about who makes the most money, but about who lasts the longest.
### 3. Why do most people get liquidated? Because human nature is hard to change.
There is a saying in the contract market: **“You cannot earn money beyond your understanding, but you can lose all your money based on your strength.”**
Common reasons for liquidation:
- Blind high leverage (always wanting to turn things around in one go)
- Not using stop-loss (“Just hold on a bit longer and I can break even”)
- Frequent trading (emotional trading, swayed by the market)
- Overconfidence (“This time I can definitely predict correctly”)
A true professional trader spends most of their time waiting, rather than frequently trading.
### 4. How to increase survival rate? The core is “risk management.”
If you really want to trade contracts, you must master the following points:
✅ Single position ≤ 20% of principal (to avoid single trade liquidation)
✅ Total leverage ≤ 4 times (long) / 2 times (short) (to control overall risk)
✅ Stop-loss ≤ 10% of principal (to prevent losses from spiraling out of control)
✅ Cash holding time ≥ 50% (waiting for the best opportunity)
Contracts are not gambling, but a craft of “risk pricing.”
### 5. Why do some people still play? Because contracts are the most efficient speculative tools.
- Two-way trading (can make money in both bull and bear markets)
- Extremely high liquidity (easier to enter and exit than spot market)
- High capital utilization (using USDT, not worrying about coin price depreciation)
But the premise is — you must first learn to “not get liquidated.”
### Conclusion: The contract market is a game for smart people, but most people are just fuel.
If you just follow the trend in trading contracts, you are someone else's “ATM”; but if you can truly understand risk, you can become the “tax collector.”
In the end, it is not the most fierce who survive, but the most cautious.
Currently in a bull market, with opportunities every day, we share secrets.
Still the same saying, if you don’t know what to do in a bull market, click on my avatar, follow me, for bull market spot planning, contract secrets, and free sharing.
Keep an eye on BTC ETH BNB
