Imagine this: you bought Bitcoin for 100 yuan, and the next day it drops to 50 yuan! Losing half! But someone managed to make 50 yuan during this crash—how did they do it? This is the magic of contract trading in the crypto world: the true 'two-way profit method'!

Leverage engine: small capital leverages big opportunities

The pain point of traditional spot trading lies in the one-sided thinking. Buying coins can only hope for price increases to profit, while being helplessly watching a crash. Contract leverage acts like an amplifier, allowing us to leverage market opportunities with 10x, 50x, or even 100x capital power—investing $100 as margin while controlling a $10,000 position under 100x leverage, this is the core function of leverage.

However, leverage is a sharp double-edged sword—doubling profits means accelerating losses. If the direction is judged correctly, one is naturally happy, but if the market goes the other way, losses at 100x leverage will also be amplified a hundredfold.

Practical analysis of the 'two-way profit method'

The core charm of contract trading lies in its ability to open up profit paths in both rising and falling directions:

Market direction identification is key to making long or short decisions:

Analysis of practical scenario cases

  1. Going long in a bull market: In March 2024, after Bitcoin strongly broke through $60,000 and confirmed effective support at $58,000, I decisively went long and set a 1000-point trailing stop, ultimately holding the position until $68,000 for profit, with capital quickly doubling.

  2. Shorting on a bear market rebound: After Luna's collapse, there was a brief rebound to $60, but market panic had not subsided. I immediately shorted as the rebound formed a top signal, closing the position at $3, with a profit margin of up to 20 times.

  3. Swing trading in a volatile market: Ethereum has been fluctuating in the range of $2500-$3000 for a month, continuously shorting at $2900 and going long at $2550, with light position rolling operations, achieving a monthly return of 40%.

Six-character principles of crypto contract trading

Master these six points, and say goodbye to blind all-in betting:

  1. Light positions are king

    — Never bet heavily on one side! The initial position should never exceed 5% of total capital.

  2. Strict stop-loss settings

    — A stop-loss must be set for every position opened! Losses should not exceed 3% of the principal.

  3. Take profits in batches

    — Set profit targets in stages! Close 50% of the position at the first target, set a trailing stop for the rest.

  4. Select hot coins

    — Focus on highly liquid coins like Bitcoin, Ethereum, and Solana! Niche coins carry extremely high risks.

  5. Avoid all-in betting

    — Never place a full position bet all at once! 'Slowly earn' always outperforms 'getting rich overnight.'

  6. Persist in reviewing trades

    — Record trades daily to avoid emotional loss of control leading to repeated mistakes.

I am Wenhua, focused on analysis and teaching, a mentor and friend on your investment journey! I wish that everyone investing in the market sails smoothly. As an analyst, the most basic thing is to help everyone make money. I am here to resolve confusion, provide operational advice, and speak with strength. When you are lost and don't know what to do, look to Wenhua (homepage) for direction.