Lightning illuminates the night sky for just a moment, but the night can be very long.
Three years ago, I received a message from a reader: 'With a principal of 2000 yuan and 20 times leverage, it turned into 30000 in three days. I feel like a trading genius!'
A month later, he updated his status: 'I got liquidated, everything is gone.'
This year he told me that he finally paid off all his debts and found a job with a monthly salary of 6000. He said: 'Now I can fall asleep every night, which is better than anything.'
Such stories are common in the circle. Why are high-leverage contracts so tempting yet so dangerous? As a veteran who has experienced two cycles of bull and bear markets, I want to share some real insights.
1. High Leverage: The Sweet Poison
In the crypto world, leverage can reach up to 125 times. This means that if you judge correctly, a 1% price fluctuation can double your capital; but if you judge incorrectly, the same degree of fluctuation can lead to liquidation.
Under this mechanism, many players only see the myth of '2000 yuan becoming 30,000' while selectively ignoring the other side of '30,000 becoming 300'. Experienced traders know that even if you win 9 times in a row, a failure on the 10th can wipe you out instantly.
Even more cruel is the fact that in the crypto world, trading occurs 24 hours a day, and price fluctuations are severe, with 50% ups and downs in a short period not being uncommon. Using high leverage in this environment is like riding a bike on the edge of a cliff.
2. Why are contracts irresistible?
Contract trading has an addictive nature similar to gambling. One player described: 'After opening high leverage, the rate of return changes by three digits every second. One second it might be 200%, the next second it might be 300%'.
The brain secretes dopamine under continuous stimulation, creating a 'heart addiction'. Many players cannot quit even after liquidation; some even cancel their phone numbers to force withdrawals, but ultimately register new accounts to return.
Worse, once players lose part of their capital, they often feel the urge to 'increase leverage to quickly recover losses'. This mentality can lead to a vicious cycle until the debt hole becomes larger.
3. The Business of Exchanges
Why are major trading platforms vigorously promoting contract trading? The answer is simple: contract trading is more profitable than spot trading.
Data shows that the contract trading volume of a large exchange can reach 13 times its spot trading volume. Trading platforms attract players with various contract competitions, using slogans like 'Play contracts, win BMWs'.
Regardless of whether investors make a profit or loss, trading platforms usually charge fees. In cases of severe volatility that prevents timely closure, some platforms may even initiate an 'automatic reduction' mechanism, forcing profitable users to share losses.
4. The Survival Rules of Experienced Traders
After years of observation, I have summarized several survival rules for contracts:
1. Leverage should not exceed 5 times
My personal hard rule is that leverage should never exceed 5 times. Even so, strict stop-loss points need to be set. High leverage is a tool for professional traders, but the vast majority of ordinary players find it difficult to handle.
2. Position management is a lifeline
Never bet all your capital. Experienced players suggest generally only investing 10% of your available funds in contract trading. Dividing funds into multiple parts and building positions in batches is a more prudent approach.
3. Stop-loss is more important than take-profit
Setting stop-loss points and strictly enforcing them is key to long-term survival. The market always has opportunities; preserving capital is the top priority.
4. Avoid emotional trading
Chasing highs and cutting losses is a big taboo in contract trading. Being greedy in a panic market and fearful in a greedy market is easier said than done. This requires strong psychological resilience and discipline.
5. Slow money is the real money
The real traders I know who make a living from trading do not rely on getting rich overnight. Their common traits are: stable profits, risk control, and long-term perseverance.
A young person who finally emerged from debt remarked: 'Slow money is really fragrant; at least I can sleep at night.' This statement reveals the truth—financial freedom is predicated on the freedom to sleep.
True trading experts see the market as a long-term battlefield, not a casino. They focus on capital management, strictly enforce discipline, and accumulate small victories for larger wins.
Conclusion: Trading is a marathon, not a sprint.
The most precious thing in the crypto world is not the myth of getting rich overnight, but the ability to continuously profit. Contract trading itself is a tool; the key lies in the person using the tool.
If you are currently addicted to high-leverage trading, you might ask yourself one question: Do I want short-term thrills, or long-term stable returns?
Follow me, and let's learn how to survive in the crypto world in the long run. The market won't pay for your dreams, but good trading habits will take you further.
Follow me@币圈罗盘 and next time, I'll break down the underlying logic of contract strategies, helping you avoid detours and earn real money!#巨鲸动向 $BTC $ETH
