Contract Trading Survival Guide: Understand Correctly – Act Properly – Survive Long Term

Open any social media platform, and everywhere you’ll see stories of “10x your account in a day,” or “retail investors flipping million-dollar trades.” But behind those glamorous profit snapshots are countless people losing sleep over liquidation warnings.

In reality, contract trading isn’t gambling, nor is it a magic wand for instant wealth. It’s a “life-or-death bet” between awareness, discipline, and risk management. If you want to last long-term, the most important thing is to truly understand its nature.

1. Understand Contracts Correctly: Seems Complicated, But Actually Very Clear Many newcomers think contract trading is something too advanced. In reality, its essence is simple: You don’t need to own the actual asset, but you can profit by predicting the price will RISE or FALL. If you think the price will rise → open a Long position If you think the price will fall → open a Short position As long as the market moves slightly in your direction, profits are amplified by leverage. But remember: ➡ The more your profits are multiplied, the more your risks are multiplied. Contracts weren’t created to make anyone rich fast—they only help those with good analysis amplify their insights, while those lacking knowledge pay the price quickly.

2. Choose the Right Type of Contract: Don’t Make Beginner Mistakes Newbies shouldn’t jump into all kinds of contracts. The two most common types are: • Perpetual Contracts (Perpetual) – Suitable for beginners No expiration date Can hold positions long-term Easy to adjust and manage risk Most commonly used • Delivery/Futures Contracts (Delivery/Futures) – Not for beginners Fixed expiration date Must close the position on expiry, regardless of market conditions Only suitable for professional traders ➡ In the beginning, focus only on perpetual contracts. Mastering one thing well is more important than dabbling in many.

3. Grasp 4 Core Concepts: Avoid “Losing Money Without Understanding Why” Many newcomers lose money because they don’t understand the basics. You must clearly understand these four:

1. Contract Size / Order Quantity ( Allows you to trade with flexible capital—even a few hundred USD can be split into smaller orders for practice.
2. Leverage ) A double-edged sword. 10x leverage → turns $1,000 into $10,000 buying power But if price moves 10% against you → your account is wiped out ➡ The higher the leverage, the faster you risk liquidation. 3( Open / Close Position ) Open a position when you predict a trend Close the position when you hit your target or need to cut losses
3. Liquidation ( When losses hit the system’s threshold, your position is liquidated automatically. Experienced traders never let the system liquidate them—they always set stop-losses first.

4. Four Survival Principles to Reduce Losses by Up to 80% These principles aren’t theoretical—they’re “conditions for survival.”

1. Don’t use high leverage Low leverage → hard to get rich quick But high leverage → very easy to lose everything Recommendation: use only 3–5x at the beginning. The goal for beginners is survival, not “flipping the game.”
2. Limit risk per order to no more than 3% of your account For example, if you have $10,000 → each order can lose a maximum of $300. Taking small losses helps your account last longer Those who let losses run too deep often “blow up out of pride” ➡ Accepting stop-losses isn’t weakness—it’s the discipline that keeps you in the game. 3( Only trade BTC, ETH, and major assets Small coins are easily manipulated, highly volatile, and unsuitable for beginners. 👉 Major assets = more orderly price movements 👉 Junk assets = easily “pumped and dumped” out of control
3. Avoid trading at night Early morning is when the market is prone to wash-outs and liquidations. High volatility High risk Easily manipulated Prioritize trading during the day when the market is more stable.

5. Conclusion: Contract Trading Doesn’t Require More Intelligence—It Requires More Discipline The crypto market is full of opportunities, but most are only available to those who survive multiple market swings. Contract trading is only suitable for those who: Use idle funds Trade with small positions Value discipline over emotion Persistently learn, practice, and improve No one builds lasting wealth overnight. The difference between those who leave the market and those who stay is risk management ability. ➡ If you want to make money in the market, first learn how not to lose it.