Discussing the pros and cons of trading contracts for altcoins and mainstream coins
The screenshot above shows two trades made in the past few days, for reference only.
Mainstream Coin Contracts: Striving for Steady Progress
Pros:
High Liquidity: Trading volumes for BTC/ETH, etc., are enormous, slippage is low, and large orders have minimal impact.
Controllable Volatility: Influenced clearly by institutional funds and macro policies, technical analysis is effective, suitable for medium to long-term.
Low Liquidation Risk: 5-10x leverage can yield significant profits, with the liquidation price far from the current price.
Cons:
Limited Returns: In a bull market, gains often lag behind altcoins, and high leverage increases risk.
Capital Costs: Long positions in perpetual contracts need to pay positive rates (e.g., 6.5%), which erodes profits.
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Altcoin Contracts: High Odds Gambling
Pros:
Opportunities for Huge Profits: Low market cap coins can increase by 60% in a single day, with significant short-term doubling potential.
Ecological Bonuses: Positive effects from technological upgrades or collaborations can trigger sharp price reactions.
Cons:
Extreme Volatility: Poor liquidity allows whales to control the market and cause a drop of 16% in a single day, high leverage can easily lead to targeted liquidation.
Information Black Box: Non-transparent information from project parties, compounded by regulatory risks (e.g., securities classification), leads to a high probability of total loss.
High Liquidation Risk: With a volatility of 20%+, a 50x leverage position can be liquidated with a 2% reverse movement.
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Core Strategy Comparison
Liquidity: Mainstream coins > 1 billion USD/day vs Altcoins < 1 million USD
Volatility: Mainstream coins daily ±3%-5% vs Altcoins ±10%-20%+
Leverage Limit: Mainstream coins ≤ 20x vs Altcoins ≤ 5x
Information Transparency: Institutional positions can be tracked vs Reliant on community rumors
Risk Control Rules:
1. Mainstream Coins: Use USDT-denominated contracts to avoid price fluctuations, set ±5% take profit and stop loss.
2. Altcoins: Position < 5% of capital, prefer coin-denominated hedges for losses, strict -3% stop loss, avoid event windows.
> 💎 Ultimate Contradiction: Mainstream coins are stable but yield thin profits, while altcoins are risky but yield substantial profits. The essence is the trade-off between risk and capital — newbies perish from altcoin leverage, while veterans fail from mainstream greed.
