Survival Guide to Leveraged Contract Trading: Three Core Principles for Beginners

High profits always come with high risks. The first step to using leverage safely is not to learn advanced strategies, but to accept a simple truth: we are not betting geniuses. I have seen too many newcomers enter the futures market with dreams of quick wealth. The outcome is often the same: accounts vanish, psychological breakdowns, and leaving the market in bitterness. Their biggest mistake is viewing leverage as a shortcut to financial freedom, while in reality, for beginners, it’s like not knowing how to swim but jumping straight into deep water. The Nature of Leverage: A Double-Edged Sword Leverage is essentially borrowing money to trade. For example: you have 100 USDT, use 5x leverage, and control a position worth 500 USDT. Price increases by 10% → you earn 50 USDT (equivalent to 50% of your capital)Price decreases by 10% → you lose 50 USDT (half of your account) Leverage does not create “miraculous” profits; it only amplifies the results. In a highly volatile market, this amplification makes trading contracts like walking a tightrope: stay balanced and continue, slip a step and you fall freely. First Principle: Low Leverage – Leave Room for Mistakes For beginners, I always recommend: Start from 1x Never exceed 5x The reason is simple: the lower the leverage, the greater the safety margin. The crypto market never moves in a straight line. 1–2% fluctuations happen daily. With high leverage, just a slight shake is enough to liquidate you. Low leverage helps you: Have time to observe Have a chance to adjust Avoid being “knocked out” of the market due to short-term noise Many platforms default to very high leverage. Beginners must manually lower it and turn off automatic leverage suggestions to avoid inadvertently trading at risky levels beyond control. Second Principle: Trade Small – Don’t Put All Eggs in One Basket Correct prediction does not mean absolute safety. Therefore, never go all-in. My personal rule: Margin for each trade does not exceed 5% of total capital For example: You have 10,000 USDT → each trade uses a maximum of 500 USDT as margin. Benefits of this approach: Losing 4–5 consecutive trades still leaves capital to restart Less psychological pressure Avoid making wrong decisions out of fear or panic The market always has unpredictable events. Trading small helps you survive during “bad days,” and only survivors have a chance to make long-term profits. Third Principle: Cut Losses – Dare to Admit Mistakes In futures trading, cutting losses is your survival armor. Whenever you open a position, you must: Predefine the maximum acceptable loss (for example, 2–3% of total account)Set a stop-loss from the start, no compromises The most common mistake among beginners: Not cutting losses Hoping the price will reverse Turning small losses into large ones, then blowing the account Cutting losses is not a failure; it’s a professional action. I usually set stop-loss points near important support/resistance zones to: Avoid being swept by normal fluctuations Prevent losses from spiraling out of control Most Important Tool: A Cool Head Leverage not only amplifies capital but also amplifies emotions: Greed when in profit Fear of loss Psychological recovery after a series of wrong trades To survive long-term, you need to develop habits: Not trading continuously all day Recording reasons for entering trades and results After a series of losses, mandatory trading breaks These may sound simple, but they are the boundary between survival and elimination. Conclusion: Survive First, Make Money Later Futures trading is a game of probabilities. No one is right 100%. The winner is not the one who catches every wave but the one who is not eliminated from the game. Leverage is like a sharp knife: Used correctly, it’s a tool Used incorrectly, it becomes a weapon destroying your account For beginners, always remember: Slow is fast – Less is more – Survival is the top priority Learn to survive before aiming for big profits. Knowledge and discipline are your most valuable assets in this market.