Want to engage in contract trading? Then you need to clarify the rules first; otherwise, you'll be blindly betting like a gambler in a casino. Understanding the basics of contracts is not just for survival but also to avoid the risk of 'liquidation'.

Today, let's talk about the essential concepts in contract trading that you must understand to avoid pitfalls and keep your life stable.

🧐 Fees, your invisible killer.

First, you need to understand the costs of contract trading! Many people think fees are just a small number, but failing to understand the fee rate rules can lead to significant losses.

For example, if you place a market order, the opening and closing fees are 0.05%. It may not seem like much, but once you leverage, this cost skyrockets.

For example, if you open a contract with 100x leverage and invest 100 USDT, the fee is 10 USDT! This means you haven't made any profits, and instead, you've lost a portion.

Remember, leverage is not a tool to make you rich; it's more like a double-edged sword that can wipe you out overnight.

🔥 Closing Fees, the unavoidable 'harvester'.

Closing fees are a very annoying existence, especially when you are about to be 'knocked down' by the market; it feels like the last straw.

If you accidentally get forcibly liquidated, the losses are not just from market fluctuations but also that closing fee of up to 1.5%! You might think that a 1% drop is all it takes, but in reality, deducting fees and closing costs, it may only take a 0.5% drop to trigger liquidation.

Therefore, don't wait until 'forced liquidation' is imminent to remember to set a stop loss.

👀 Marked Price, don't fall for the foolish chase of rising and falling prices.

The concept of 'marked price' may be a bit complex, but it is actually a smoother price fluctuation than the current market price.

When setting your trigger price, remember to use the marked price to avoid greater impacts from short-term market fluctuations. To avoid being 'harvested' by the market, you need to understand how to dance with the marked price.

⚖️ Isolated Margin vs. Cross Margin, how should one choose?

The choice between isolated and cross margin confuses many people. Simply put:

  • Cross Margin Mode: You use all the funds in your account as margin; the larger the opening amount, the greater the risk.

  • Isolated Margin Mode: Only a portion of the funds at the opening is used as margin, while the other funds remain unaffected, resulting in relatively lower risk.

Both have their pros and cons; the specific choice of which mode to use depends on your risk tolerance.

But remember, if there are open contracts in your account, you can't switch modes at any time, so think carefully when operating.

🎯 Summary:
Contract trading is not a mindless tool for 'doubling' your profits; it's more like entering a high-risk game. Only by understanding the cost structure, leverage risks, closing conditions, price fluctuations, and other basic rules can you survive in this game.

I remind everyone not to blindly follow trends or arbitrarily increase leverage. The charm of contracts lies in precise strategies and risk control, not in 'making a name with a gamble'. Stay rational, set stop losses, and master leverage to steadily advance in this game.