I've seen quite a few contracts get liquidated. Let me share some of my thoughts.

Contracts are possible, but your initial capital should never exceed 5% of your total assets, and your net long or net short leverage should not exceed 3X.
Contracts rely on skill, using small capital to leverage market trends. Extremely risky!!!
People who have succeeded with contracts this round, like Langlang, for example, went from $1,000 to $10 million, a ten-thousand-fold return. They don’t gamble big to win big.
For instance, when his profit exceeded $4.5 million, he only kept about $300,000 to $500,000 in the contract account, withdrawing all profits. It’s also luck, and top-tier skill. He rode a wave of rapid growth, reaching total profits over $10 million.
Contracts are a way to hone your trading skills. Their advantage is that you can go long or short, and they can amplify your gains and losses.
Suppose you have $100,000, and you use $5,000. If you can’t steadily grow that $5,000 with low drawdowns to $50,000, why do you think you can turn $50,000 into $500,000?
So, if you want to trade contracts, don’t use more than 5% of your assets.
If you can’t grow small funds with low drawdowns to 10X, then large funds are unlikely to succeed either.
This also depends on talent and skill. Many people simply lack trading talent. If you trade with 3%-5% of your capital, you at least have room for trial and error. Making 2-3 mistakes means your total assets only lose up to 15%, giving you a chance to recover in other suitable tracks.
To summarize:
1. Use less than 5% of your funds for contracts
2. Total leverage, whether net long or net short, should not exceed 3X
3. Going long is the way to make money; going short won’t make you rich
4. Any leverage over 10X is gambling—people who do that usually end up losing everything
Many times now, I treat contracts like spot trading. Why? Because the liquidity of contracts is 2-3 times higher than spot, and transaction fees are 70% lower.
For altcoins with a size of 1-2 million, closing positions and liquidations cost at least 0.5% less than spot. As long as the net long position doesn’t exceed 10 days, most of the time, contracts are more suitable. #深度创作营