Holding spot in a bull market usually has more advantages than opening contracts, mainly because the overall trend in a bull market goes upward, and spot trading can better capture the long-term benefits of market increases, while the high risks of contract trading may actually weaken investment returns.
Secondly, even if you think a bull market means prices will go up and open a long contract, a brief price pullback could lead to liquidation, especially under high leverage, where even a small pullback can force investors' positions to be liquidated, causing them to miss out on subsequent market recovery opportunities.
Ultimately, for most beginners or investors with lower risk tolerance, spot trading during a bull market is definitely a more robust choice.
If you absolutely must play with contracts, read through them first before you touch them. You'll live at least three more years! — "Life-saving Operation Manual" at the end of this article
Why do some people make 1 million a day from contracts, while others lose everything due to margin calls?
What exactly is a contract? Leverage at the gambling table!
Popular explanation:
A contract is a "gamble that uses leverage to magnify returns and risks."
Spot trading: Spend 100 yuan to buy a coin worth 100 yuan. If the price rises by 10%, you earn 10 yuan. If the price falls by 10%, you lose 10 yuan (similar to buying vegetables, you pay for the goods).
Contract trading: Spending 100 yuan to open a 10x leverage is equivalent to borrowing 900 yuan to buy a total of 1,000 yuan worth of coins. If the price rises by 10%, you earn 100 yuan (10x profit), and if it falls by 10%, you lose 100 yuan (the principal is reduced to zero, and you may even owe money).
Casino Analogy:
The spot market is "bet on big or small, bet 10 yuan", and the contract is "bet on big or small, bet 10 yuan, but the casino allows you to say "I will use this 10 yuan as 100 yuan". If you win, you will earn 100 yuan, but if you lose, not only will you lose the 10 yuan, but you will also have to pay the casino 90 yuan.
2. The fatal temptation of the contract: the "devil's deal" that makes 10 times the profit in 10 minutes!
Case of getting rich quickly (real but extreme):
In 2025, BTC plummeted by 20%. A player used 5,000 U to open a 20x short position (betting on a fall) and closed the position 10 minutes later, making a profit of 100,000 U (5,000×20×20%).
A certain MEME coin soared 500% after it went online. Leveraged players earned 500,000 U with 1,000 U, directly achieving "financial freedom".
Psychological traps of retail investors:
"It takes a week to make a 10% profit on spot trading, but it only takes 10 minutes to make a 10% profit on futures trading. Why not play?"
The truth: This is like the "Quick 3" in the casino. You win money quickly, but you lose money even faster - 90% of contract players will not survive for 3 months.
3. The slaughterhouse logic of contracts: How do market makers reap the benefits of retail investors?
Trick 1: Pin Market (False Breakout to Kill Long and Short Markets)
The market maker pushed the price to 100,000 U, triggering retail investors to buy at high prices, and then instantly dropped it to 80,000 U, causing all long positions to be liquidated, and then pulled it back to 90,000 U, harvesting both the bulls and the bears.
Case:In 2024, BTC on a certain platform plummeted by 30%, causing a network-wide liquidation of $2 billion. Retail investors cried out that "the dealer had seen through their cards."
Trick 2: High Leverage + Low Liquidity (Boiling the Frog in Warm Water)
Small exchanges launch 100x leverage, using "high returns" to attract retail investors, and then dump the market after pumping up niche coins (such as a certain Dogecoin). Retail investors want to close their positions but are unable to complete the transaction due to poor liquidity, and they suffer direct losses.
Trick 3: Emotional Harvesting (unplugging the internet during a market crash, freezing during a market surge)
During a major market downtime, exchanges deliberately shut down, leaving retail investors unable to cut losses and watching their assets plummet to zero (during a margin call on an exchange in 2023, users complained that "the page took an hour to load").
4. Must-read for retail investors: 3 iron laws for contract survival!
1. Leverage should not exceed 5x: The lower the leverage, the longer you can survive!
10x leverage: If the price drops by 10%, the position will be liquidated (for example, if you have 1000U of principal and use 10x leverage to buy 10,000 U of tokens, and the price drops by 10%, you will lose 1000U and your principal will be gone);
5x leverage: A 20% drop will result in a margin call (same situation, a 20% drop will result in a margin call, leaving you with more room to stop loss).
Tips:"10x leverage is a drug, 5x leverage is alcohol, and 2x leverage is a drink" - Beginners should start practicing with 2x!
2. The stop loss for a single transaction should not exceed 3% of the principal: you can survive even if you make three mistakes!
Example: With a capital of 100,000 U, and a stop loss of no more than 3,000 U (3%) per trade, and three consecutive mistakes resulting in a loss of 9,000 U (9%), there is still 91% of the capital left to recover.
Counterexample: A retail investor sets a 10% stop loss for each order. If he makes two mistakes, he loses 20%. If he makes a mistake for the third time, his position is liquidated.
3. Only trade mainstream coins + white market: stay away from the sickle of the early morning!
Mainstream currencies (BTC/ETH): high manipulation costs for market makers and low probability of manipulation;
Daytime trading (9:00-18:00): Avoid the "peak liquidation period" at 3:00 a.m. (market makers love to commit crimes in the middle of the night).
5. The ultimate sober guide for contract players: These 3 types of people are destined to make money!
1. Quantitative robot operators
Use a program to automatically track trends, set a "take-profit when the price rises 5% and a stop-loss when the price falls 3%" to avoid emotional trading (actual annualized returns are 20%-50%, but programming knowledge is required).
2. Hedge
If you hold 1 million U BTC in spot trading and open a short position of 500,000 U to hedge, when the price drops by 10%, you will lose 100,000 U in spot trading and earn 50,000 U in short position, thus reducing the loss.
3. Extreme Market Catcher
Only take action when there is a "black swan event" (such as a sudden policy change or an exchange crash), use 1% of the funds to bet on a sharp drop/surge, and run away after making a profit (only do it 3-5 times a year).
6. Final advice to novices: Contracts are not ATMs, but “wealth redistributors”!
99% of people are suitable to stay away from contracts: If you are an office worker, a mother, or a student, it is more reliable to accumulate slowly by investing in spot stocks;
Must Play? Do These 3 Things First：
❶ Practice trading on a simulated platform for 3 months, recording your mindset changes with each trade;
2. Set aside enough money (e.g., 1,000 yuan) that you can live on even if you lose it, and only use 2x leverage.
❸ Write a "trading diary" after the market closes every day to analyze the reasons for profit and loss.
Here’s another true word for you:
"Of those who make big money in the cryptocurrency world, 90% do so by capitalizing on bull and bear cycles in spot trading, while 10% rely on playing on the edge of contracts. If you're not a gifted trader, don't use your capital to challenge probabilities—after all, casinos always make money based on "probability," while retail investors are always betting on "low-probability miracles."
By 2025, my cryptocurrency investment will reach eight figures. My lifestyle now is that I always stay in high-end hotels for around 3,000 yuan, and my suitcases and hats might even have cryptocurrency symbols on them! I have almost no experience in business dealings with people, so I have very few worries.
I have the patience to summarize my insights. The most important thing about cryptocurrency trading is a good mentality, and technology comes second.
1. In most cases, Bitcoin is the leader in the rise and fall of the cryptocurrency market. Strong-quality coins such as Ethereum sometimes break away from Bitcoin's influence and move out of a unilateral trend. Altcoins basically cannot escape its influence.
2. Bitcoin and USDT move in opposite directions. If you find that USDT is rising, you should be wary of Bitcoin falling. When Bitcoin is rising, it is a good time to buy USDT.
3. The phenomenon of pinning is easy to occur between 0:00 and 1:00 every day, so domestic coin friends can set the buy price of the favorite coin as low as possible and the sell price as high as possible before going to bed. Maybe the transaction will be completed and you can make money;
4. 6-8 am every day is a good time to buy or sell, and it is also a good time to judge whether the market will rise or fall that day. If the market has been falling from 0:00 to 6:00, and is still falling during this period, it is a good time to buy or cover the position, and the market will basically rise that day. If the market has been rising from 0:00 to 6:00, and is still rising during this period, it is a good time to sell, and the market will most likely fall that day.
5. 5 p.m. is a key time for rumors. Due to the time difference, American cryptocurrency traders get up and go to work, which may cause fluctuations in the price of the cryptocurrency. Some big rises or falls have indeed occurred at this time, so be especially careful.
6. There is a saying in the cryptocurrency circle that “Black Friday” happens to happen. There have been a few cases where the market plummeted on Friday, but there have also been cases of sharp rises or sideways movements. It is not particularly accurate, so just pay attention to the news.
7. If a coin with a certain trading volume drops, don't worry. Hold on patiently and you will definitely get your money back. It could be as short as 3-4 days or as long as a month. If you have extra USDT, you can buy more in batches to push the price down, which will help you get your money back faster. If you don't have extra money, just wait and see. You won't be disappointed. Unless you really bought I-coins;
8. When trading the same coin in spot trading, holding it for the long term and trading less frequently can yield greater returns than frequent trading. It all depends on your patience. I bought Dogecoin at 0.1 and it has increased over 20 times since then.
There's a simplest way to trade cryptocurrencies that will keep you "eternally profitable"—make 30 million! This method achieves an 80% winning rate! Essential cryptocurrency trading indicators: [Rise and Fall Patterns] Once you master them, the cryptocurrency market will become your "cash machine."
Common rising K-line combinations
1. Downward Acceleration Line
1. Technical features
The downward acceleration line refers to the K-line combination in which the price or index falls more and more during the decline, as shown in Figure 2-1 above.
(1) Appears in a falling market;
(2) The decline starts slowly, then gets faster and faster, with medium or large negative lines closing in succession.
2. Technical significance
The appearance of a downward acceleration line is a signal that the currency price has bottomed out, and a rebound is a high-probability event.
2. Star of Hope
1. Technical features
(1) Appears in a downtrend;
(2) It is composed of three K lines, the first one is a Yin line, the second one is a small Yin line, a small Yang line or a cross line, and the third one is a Yang line;
(3) The third K-line entity goes deep into the first K-line entity.
2. Technical significance
The Star of Hope is a bottoming out and reversal signal, and the market outlook is bullish.
3. Rising Sun
1. Technical features
(1) Appears in a downtrend;
(2) A large Yin candlestick appears first, followed by a large Yang candlestick that opens and closes high;
(3) The closing price of the Yang line is higher than the opening price of the Yin line.
2. Technical significance
The rising sun is a signal of bottoming out, and it is highly likely that the market will stop falling and rebound in the future.
4. Round bottom
1. Technical features
(1) Appears during a downtrend or consolidation process;
(2) First, a large Yin line is formed, and then a number of small Yin lines and small Yang lines are formed at the bottom to form an arc bottom.
2. Technical significance
The round bottom pattern is a bottoming signal, and the market outlook is bullish. It is a relatively reliable reversal pattern.
5. The Three Red Soldiers
1. Technical significance
(1) Appears at the beginning of an upward trend or after a sideways trend;
(2) It is composed of three consecutive small bullish candlesticks that set new highs.
2. Technical Features
The three red soldiers are a buy signal, and the market outlook is bullish.
6. Steady Rise
1. Technical features
(1) Appears in an upward market;
(2) There are a few small Yin lines among many Yang lines;
(3) The entire K-line arrangement is tilted upward.
2. Technical significance
A steady rise is a buy signal, and the market outlook is bullish.
7. Two stars rising
1. Technical features
(1) Appears in an upward trend;
(2) It consists of three K lines. The first one is a big Yang line, and then two small K lines appear above the Yang line. The small K line can be a cross line, a doji, or a small
Yang line, small Yin line.
2. Technical significance
Two rising stars is a buy signal, and the market outlook is bullish.
8. Immortal Pointing the Way
1. Technical features
(1) Appears in an upward market;
(2) Composed of several K-lines;
(3) When a long Yang line is drawn, a long upper shadow line is left;
(4) The price of the currency fell back and then rose above the upper shadow line.
2. Technical significance
The Immortal's Guidance is a buy signal, and the market outlook is bullish.
9. Two Yangs and One Yin
1. Technical features
(1) It can appear in both an upward trend and a downward trend;
(2) It is composed of two longer Yang lines and a shorter Yin line;
(3) The central axes of the three K-lines are basically at the same horizontal position.
2. Technical significance
(1) If it appears during an upward trend, the market continues to be bullish and the currency can be held;
(2) When it appears in a downward trend, it is a bottoming signal.
Common falling K-line combinations
1. Evening Star
1. Technical features
(1) Appears in an upward trend;
(2) It consists of three K lines, the first one is a Yang line, the second one is a high-opening small Yin line, a small Yang line or a cross line, and the third one is a Yin line;
(3) The third negative line entity penetrates into the first positive line entity.
2. Technical significance
The evening star is a peak reversal signal, it is recommended to sell, and the market outlook is bearish.
2. Dark clouds cover the sky
1. Technical features
(1) Appears in an upward trend;
(2) It is composed of two K-lines, one positive and one negative;
(3) A large Yang candlestick appears first, followed by a large Yin candlestick with a gap up;
(4) The body of the Yin line penetrates below half of the body of the Yang line.
2. Technical significance
Dark cloud cover is a peak signal, and the market outlook is bearish.
3. Dome
1. Technical features
(1) Appears during an upward trend or sideways consolidation;
(2) First, a large Yang line is formed, and then a number of small Yin lines and small Yang lines are formed on the top to form an arc top;
2. Technical significance
A round top is a topping signal, a trend reversal, and a bearish outlook.
4. Three Crows
1. Technical features
(1) Appears in an upward trend;
(2) It is composed of three large black candlesticks that open high.
2. Technical significance
Three crows is a peak signal, it is recommended to sell, and the market outlook is bearish.
5. The decline continues
1. Technical features
(1) Appearing during a downtrend;
(2) There are a few small yang lines among many yin lines;
(3) The entire K-line arrangement is tilted downward.
2. Technical significance
The decline is more than a bearish signal and selling is recommended.
6. Short Vanguard
1. Technical features
(1) Appears in a falling market;
(2) Composed of several K-lines;
(3) When a long Yinxian line is drawn, a long lower shadow line is left;
(4) Shortly after the price rebounded, it fell below the lower shadow line.
2. Technical significance
The short-side vanguard is a sell signal, and the market outlook is bearish.
7. Two Yins and One Yang
1. Technical features
(1) It can appear in both an upward trend and a downward trend;
(2) It is composed of two long Yin lines and one short Yang line;
(3) The Yang line is sandwiched between two Yin lines.
2. Technical significance
(1) If it appears during an uptrend, it is a peak signal, so sell;
(2) Two Yins and One Yang mostly appear in a downward trend and rarely appear in an upward trend;
(3) A bearish outlook continues during a downtrend.
9 survival rules for short-term operations in the cryptocurrency circle!
1. You must learn to wait. Contracts are like a game of pass the parcel. After a surge in emotions, there will inevitably be adjustments, and after panic, there will be a reversal. Using 20% of the opportunities to earn 80% of the profits is an irreversible law of the market.
2. Never hold a large position. Overweight positions can easily lead to emotional upsets, potentially creating a vicious cycle. However, losses are normal; the key lies in your mindset and the ability to identify new opportunities. To achieve profit, prioritize protecting your principal.
3. Be cautious when buying. Don't be impulsive due to a sudden surge. In a big market, there are many opportunities. Make judgments based on a comprehensive analysis of the index and sentiment.
4. When losses do not meet expectations, make a quick decision and never waste time on losses. Look for new opportunities first.
5. Withdraw after a big win. A big win often signals a frenzy in the market and an impending correction. Timely withdrawals clear the frenzy and add color to your life.
6. Respect the market and avoid subjective judgment. Don't be stubborn about investments that haven't been chosen by the market. Investing in investments that are market-approved is the right path.
7. No succession after the climax. The market has reached its climax, and the game of passing the parcel is about to end. Who is willing to take over the next day?
8. Avoid trading in the afternoon. Short-term trends are already clear in the morning, so take action when it's time to do so. Streamline your trades and avoid unnecessary entanglements.
9. Insist on reflection and summarizing. Failure isn't a terrible thing; what's terrible is achieving nothing. Let each failure become the foundation for success, and you'll go further and further.
I'm Ah Peng. I've experienced multiple bull and bear cycles and have extensive market experience in various financial sectors. Here, I'll penetrate the fog of information and discover the real market. Seize more opportunities to gain wealth and discover truly valuable opportunities. Don't miss out and regret it!
Ah Peng only does real trading, the team still has positions to speed up #btc70k $BTC$ETH
