Can you really play in the cryptocurrency world? Can contracts be traded?
$LUNA Many beginners are very interested in contracts, but they don't understand the rules or risk management, and they get educated by the market right away.
Today, I will explain to you what contracts are, how to trade them, and how to avoid liquidation in the most practical way.
1. What is contract trading?
In one sentence:
You don't need to actually hold the coins; as long as your directional judgment is correct, you can make money; if the direction is wrong, you will lose.
If you think it will rise → Go long
If you think it will fall → Go short
The core is to trade price fluctuations, not to hold assets.
2. The two common types of contracts
1. Perpetual contracts
No expiration date, can be held indefinitely.
Prices are anchored to spot through “funding rates,” with longs and shorts paying each other.
2. Futures contracts
Have a fixed expiration date and settle at the spot price at expiration.
Common types include quarterly and bi-quarterly contracts.
3. The most important fundamental concepts
1. Contract size
The smallest trading unit of a contract. Each contract has a different value depending on the cryptocurrency pair.
2. Leverage
Amplifies profits but also amplifies losses.
10x leverage means: if you drop 10%, you could be liquidated immediately.
3. Opening a position
Buy to go long: Bullish
Sell to go short: Bearish
4. Closing a position
Ending a trade to lock in profits or losses; can be market price/limit price.
5. Forced liquidation
If the margin is insufficient, the system will automatically close your position to prevent account liquidation.
4. Risk management is vital for beginners
1. Keep leverage within 5 times.
The higher the leverage, the quicker the loss.
10x means a 10% drop will lead to liquidation, while 5x requires a 20% drop to be liquidated.
2. Single trade loss should not exceed 3% of the principal.
For example, if you have a capital of 100,000, you can lose a maximum of 3,000 per trade.
After three consecutive mistakes, you still have 91% of your capital to continue trading.
3. Try to trade mainstream coins (BTC/ETH).
Manipulation costs are high, more stable, fewer spikes.
Small coins may seem exciting, but they can be deadly.
4. Try to trade during the day (9:00-18:00).
Around 3 AM is a hotspot for liquidations, with illogical fluctuations; beginners should avoid it.
One last heartfelt statement
#币圈生存法则 Contracts can indeed earn quick money, but whether you can earn money in the long term relies not on luck, but on: Direction + Discipline + Risk Management.
First learn not to lose, then learn to make money.
First practice with a demo account, then trade with small real funds.
Avoid gambling-style trading; the more stable this path is, the farther you will go.
Follow DaSen, no bragging or false promises, just sharing practical experience that can help you survive in the industry. The team still has positions available; whether to join is up to you?
#带单大神