How difficult is it to turn a small investment into millions with contracts?
If you are prepared to take a small risk for a big gain, it indicates that you have a certain understanding of the risks involved in contracts. You haven't blindly gone for big rewards without proper knowledge. However, making a hundredfold or even several hundredfold profit with a small investment through contracts is still extremely difficult.
This is because, under high leverage, even if you predict the outcome correctly, you might get liquidated due to market fluctuations before reaching that outcome. This phenomenon, known as mutual destruction, is a common tactic used by market makers to harvest retail investors.
You might want to try options contracts. With options, there is no risk of liquidation; as long as your prediction is correct, you will profit regardless of the market's ups and downs during the process. For example, if Zhang San buys a call option for Bitcoin at a price of $11,000, paying $100 for it with a strike price of $11,500, as long as Bitcoin is above $11,600 when the contract expires at the weekend, Zhang San will make a profit. Conversely, if it doesn’t reach that price, Zhang San will lose the $100 premium. Regardless of market fluctuations, Zhang San's maximum loss will always be that $100 premium. Overall, options are relatively more controllable in terms of risk compared to futures, but using them solely as a speculative tool is not advisable. The correct approach should be to use them as a means of hedging risk or for arbitrage. Knowing how to use them is not difficult, but not knowing can lead to significant losses. Also, remember the calculation method for liquidation rate: if you calculate it as 50, when you lose 50% of your principal, it means total liquidation. However, if you profit by 50% based on today’s ETH price calculation with 100x leverage, a 50% profit equals 1.48 times your principal. A loss of around 50% means liquidation, which, based on today’s calculations, translates to about a $2 drop leading to liquidation, with a success rate of 25%. So, don't listen to those fools who casually talk about risking 100 times; it’s all nonsense.
