The root cause of contract explosion (also known as "forced liquidation" or "explosion") is indeed high leverage trading. When traders use high leverage to trade, they are actually trading with borrowed funds, which (that is, the "money that does not belong to you" you mentioned) usually comes from the financing service of the exchange or broker.

Suppose, you have 1000u, but you use 100x leverage of 100u, which is equivalent to the funds you use are actually 10000u, and you borrowed 9000u. And this 9000u does not belong to you. As long as the fluctuation is 10%, your principal 1000u will be gone.

High leverage trading amplifies potential profits, but at the same time, it also amplifies potential losses. In your example, using 100x leverage means that every 1 unit of funds in your account actually controls 100 units of assets. Therefore, even if the market only fluctuates relatively small, it may cause your account to lose more than your initial investment (that is, your principal).

Indeed, in highly volatile markets such as cryptocurrencies, fluctuations of 10% up and down are relatively common. Therefore, the risk of trading with high leverage is very high. Once the market volatility exceeds the tolerance of your account, your trade may be forced to close to avoid further losses.

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Are there people who make a lot of money by trading? Of course there are.

Some people are just lucky, and some people may really master some secret skills. But those secret skills cannot be learned by others, because once everyone knows it, it will not work.

We traders must learn to study the ecological development and construction of a currency, and now it is a bull market!

If you are confused now, you can follow the top and actively find me,

I will try my best to help you. I can't guarantee how much money I can make, but at least I can help you avoid detours.