Can the cryptocurrency market be entered? Is contract trading worth trying?

Many newcomers are very interested in contract trading, but due to not understanding the rules and risk control, they are harshly 'educated' by the market as soon as they enter.

Today, I will use practical experience to clearly explain the gameplay of contract trading and the key points to avoid pitfalls.

Contract trading, simply put, means that you do not need to actually hold digital currency; you can profit just by judging the price trend. If you judge incorrectly, you will incur losses. If you expect prices to rise, you go long; if you expect prices to fall, you go short. The core is to grasp price fluctuations rather than hold assets.

There are mainly two types of contracts. One is the perpetual contract, which has no expiration date and can be held long-term. The price is anchored to the spot price through a 'funding rate,' with both long and short sides paying each other. The second is the delivery contract, which has a fixed expiration date and is settled at the spot price or through physical delivery at expiration. Common types include quarterly and next-quarter contracts.

There are several basic concepts to understand. The number of contracts is the smallest trading unit; different currency pairs have different values for each contract. Leverage can amplify both profits and losses; with 10x leverage, a 10% drop could lead to liquidation. Opening positions can be divided into buying long and selling short; closing positions is the process of ending trades to lock in profits or losses, which can be done at market or limit price; forced liquidation occurs automatically by the system when there is insufficient margin to prevent excessive account losses.

For newcomers, risk control is crucial. Control leverage within 5x; the higher the leverage, the greater the risk. Under 5x leverage, a 20% drop could lead to liquidation; single trade stop loss should not exceed 3% of the principal. For example, with a principal of 100,000, the maximum loss per trade is 3,000. Even with three consecutive wrong trades, 91% of the principal can continue to operate; try to trade mainstream coins like BTC and ETH, as they have higher manipulation costs and are more stable; try to choose trading times during the day (9:00 - 18:00), as liquidations tend to cluster around 3 AM, where fluctuations are irregular, and newcomers should avoid this period.

Contract trading can lead to quick profits, but long-term profitability relies not on luck, but on directional judgment, trading discipline, and risk control. First learn to avoid losses, then practice with a simulated account, followed by small amounts in real trading; avoid gambling-style trading, and steady progress will lead to further success.