Have you ever wondered why there are so many 'genius traders' in the cryptocurrency space, yet only a few manage to stay in the market? Some people start with over a million in capital and end up with nothing overnight, and the common point in all of this is — they played contracts.
Contract trading, to put it simply, is gambling. As long as you can predict the direction correctly, you can make a fortune, but with the slightest misstep, everything can be lost in an instant. Unfortunately, human nature is greedy, and the simpler a way to make money appears, the easier it is for people to lose their rationality.
A friend of mine made some money a few years ago and started researching contracts. He excitedly told me, 'Using leverage is the fastest way to get rich; I don't have to stick to those spot trades anymore.' Initially, he did make quite a bit. When the market was good, he would open 10x or 20x leverage and double his capital in just a few minutes. During that time, his life was incredibly glamorous; he was posting profit screenshots every day, and his social media was filled with 'doubling, doubling, doubling again.'
But what happened later? When the market rebounded slightly, the speed of liquidation was faster than the speed at which he deposited funds. He began to lose control, constantly adding money to his account in an attempt to average down, even selling all his previously earned spot trades, ultimately resulting in his account being wiped out. The worst part is that he not only lost all his money but also ended up in significant debt.
This is the essence of contracts; it lets you taste a bit of sweetness, making you feel invincible, but ultimately it will throw you harshly back to reality. The market is always right, and human nature is always weak. When the market starts to fluctuate, no matter how rich your experience or how accurate your predictions, just one misstep can render all your efforts worthless.
Some people might say, 'I understand risk control and won't end up like those who liquidate their positions.' The problem is that you can never predict how extreme the market can get. One piece of news, one flash crash, is enough to send the entire market into chaos. At that point, your risk control and plans become a joke.
The most ironic thing is that those who set up exchanges are the real winners. They earn fees by letting you 'take revenge' over and over again, causing you to liquidate your positions. You think you can win against the market, but in reality, only the exchanges are laughing in the end.
So, don't touch contracts, really don't touch them. Cryptocurrency is already high-risk enough, and the volatility in spot trading is enough to raise your heart rate, so why play with fire? If you truly want to survive in this market, the best approach is to be steady and protect your capital. Don't try to make quick money with leveraged trading; too many people have already fallen on that path.
Remember this: contracts are a game where smart people play to lose against other smart people, and the market never lacks smart people.