Newbies are not advised to trade contracts. At least you should have been in the market for 2-3 years and understand spot trading before considering contracts, or never consider them at all, because this is highly speculative and money can come quickly.

Many people, both newbies and those who think they know a lot,

always talk about how many times their investment is, but in fact, contracts are unrelated to multiples; they are related to the amount of your position.

Another point is that contracts are about making big profits with small investments, not the other way around. Everyone must remember this!

Let’s calculate why contracts are unrelated to multiples:

First: If you have 1000u in your account for contracts.

If you open a position of 10u at 100 times leverage, your position size is also 1000u.

If you open 100u at 10 times leverage, your position size is also 1000u.

If you open 200u at 5 times leverage, your position size is also 1000u.

So stop always referring to multiples.

1. Position management: The essential difference between contracts and spot trading is that

in a bull market,

for spot trading: If you are confident in a coin,

with the same 1000u capital, if you buy one coin entirely,

if this coin rises by 10% in spot trading, you can earn 100u.

Maybe if you are not sure, you might get stuck and not get liquidated.

Secondly: If you are confident in a coin,

you manage your position properly,

with a 1000u capital in the contract account,

opening a 100u position at 20 times leverage is also a position size of 1000u.

This means that this coin only needs to rise by 5% in spot trading for you to gain 100u in profit; a 5% rise in spot trading multiplied by 20 times equals 100%, exactly 100u, with a 100% return rate. A 10% rise can earn you 200u.

You earn as much as it rises, and you will lose the same amount if it falls, and you can handle a loss of 1000u before being liquidated.

In a bull market, after extreme market conditions and bottom-fishing, it generally won't fall by around 50%, so position management and short-term contracts maximize profit.

2. The following is about making big profits. Not managing positions, small funds gambling at hundreds of times leverage is a way to wealth.

Let’s calculate with 100u capital:

1. If you buy spot with 100u, how long do you have to wait for this coin to rise to make a profit? You can also calculate that a 10% rise in a coin only earns you 10u.

2. High leverage without managing positions.

With 100u capital opening a position at 100 times leverage,

if you are confident,

a 1% rise in contracts can earn you 100u. If you are not sure, you can only lose everything in situations where the price is indeed very low.

If this coin rises by 10%, you can obtain a 10 times return,

which is 10% x 100 = 1000u.

So do not mock any dreamer's small investment.

Isn't buying spot with large funds more appealing?