Why are so many people in the crypto world obsessed with contracts? To put it simply, it's all about making quick money!
For those who love to take risks, contracts are like gambling, very exciting. You work hard for a month to earn ten thousand, while others in the contract market use ten thousand dollars with a thousand times leverage; a slight increase means earning ten thousand, and what if it rises by ten points? Directly earning one hundred thousand, in a few minutes topping your annual salary! This temptation, who can resist?
Of course, some may say, if the direction is wrong, won't you lose everything? You have to think this way: he can lose ten times with one hundred thousand, but as long as he gets it right once, he makes it back. In the crypto world, the market fluctuates dramatically, with 1-2% changes happening in a second. If you are lucky, you can earn your monthly salary in just one second!
This is why so many people love to play contracts in the crypto world, all thinking of getting rich quickly. Society today is impatient, and everyone is reluctant to take it slow, preferring to take risks to gamble.
However, there are also people who are more stable; they have large positions but low leverage. Their returns are not as high as gamblers, but seven or eight out of ten trades are profitable.
But that being said, the contract market is not a joke; liquidation happens frequently. In the past month, the liquidation funds in the crypto contract market reached as high as 20 billion dollars! This is no small amount, indicating that whether big or small money, one must be cautious in the contract market.
So how can you avoid liquidation in the contract market? The key is position management!
Liquidation in contracts mostly occurs due to high leverage and heavy positions. Therefore, when trading contracts, you must manage your positions and leverage well. When leverage is high, the position must be low to ensure the safety of your funds.
Remember, no matter how the market changes, you must protect your position. The market always fluctuates, but the safest way is to keep yourself in a secure position. You can occasionally check how the market is doing, but you must never expose yourself to risks.
So the only secret to trading contracts is position management.
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