In the cryptocurrency world, apart from spot trading, contract trading has become the main battlefield for more and more investors. However, many beginners are daunted by the term "contract," feeling that it is complex and high-risk. Today, let's talk about what contracts really are, whether they are suitable for you, and how to avoid liquidation.

1. What is contract trading?

In simple terms, contract trading is a leveraged tool that allows you to make money whether the market goes up or down. You do not need to actually hold a specific cryptocurrency, but rather profit from price fluctuations by predicting the direction of the market—either going long or short.

✅ For example:

If you think BTC will rise, you open a "long position"; if it falls, you open a "short position." As long as you are correct in your direction, you can make money whether the market goes up or down.

2. Why is contract trading so popular?

Two-way trading offers more opportunities: unlike spot trading, which can only profit when prices rise, contracts allow you to profit when prices fall as well.

Leverage amplifies returns: With 10x leverage, you can control 10 times the amount of the contract with just 1 unit of capital. But remember, risks are also amplified.

Participate without holding coins: Contracts are "derivatives," allowing you to participate in market fluctuations without needing to purchase the underlying asset.

3. 3 tips for beginners entering the market:

1. Start with small funds and low leverage.

Do not jump in with 10x or 20x leverage immediately; practice with 1-3x leverage to get familiar with the rhythm.

2. Set stop-loss and take-profit orders to prevent liquidation.

Always set a stop-loss order with every trade; controlling risk is more important than trying to "capture all profits."

3. Develop a habit of reviewing trades.

After each trade, reflect on what went well and what went wrong, gradually forming your own trading logic.

4. While contracts can be good, it is essential to have a sense of "awe."

Many people have become wealthy in the contract market, but many have also faced liquidation and losses. This is not a paradise for speculation; it is a place that amplifies human strengths and weaknesses.

Learning to control emotions, position sizes, and desires is a necessary course for a mature contract trader.

Follow our trading strategies, and you can turn your account around overnight!