Beginner’s Practical Guide to Crypto Contract Trading: Must-Read for Newcomers—Avoid Pitfalls Before Profiting

Many beginners are highly interested in contracts, but due to a lack of understanding of the rules and missing risk controls, they get taught a harsh lesson by the market right after entering. Today, using straightforward and practical logic, we’ll clarify the essence of contracts, how to trade, and the core of avoiding liquidation. Newcomers can reference this directly.

I. Core Definition of Contract Trading

Core Logic: No need to actually hold the crypto asset. You can profit simply by judging whether the price will rise or fall—profit if your direction is correct, lose if it’s wrong. The core is earning from price fluctuations, not from holding the asset.

1. Bullish → Go long
2. Bearish → Go short

II. Two Main Types of Contracts

1. Perpetual Contracts: No expiration date, can be held long-term, anchored to spot prices via funding rates, with long and short positions paying each other.
2. Delivery Contracts: Have a fixed expiration date; settled at expiration according to spot price (or physical delivery). Commonly available as current quarter and next quarter contracts.

III. Basic Core Concepts (Must Understand)

1. Contract Size: The smallest trading unit of a contract; value per contract varies by trading pair.
2. Leverage: Amplifies both profits and losses. With 10x leverage, a 10% drop can easily lead to liquidation.
3. Open Position: Buy to go long (bullish), sell to go short (bearish).
4. Close Position: End the trade and lock in profit/loss; supports both market and limit orders.
5. Forced Liquidation: When margin is insufficient, the system automatically closes your position to prevent your account from going negative.

IV. Essential Risk Control Points for Beginners

1. Prioritize trading mainstream coins (BTC/ETH): Harder to manipulate, more stable trends, lower risk of flash crashes. Small coins are extremely volatile—beginners should avoid them.
2. Focus on daytime trading (9:00-18:00): Around 3:00 AM is a high-risk period for liquidations and unpredictable movements—beginners should strictly avoid.

V. Practical Core Advice

Contracts can make fast money, but long-term profitability doesn’t rely on luck. The core depends on three things: directional judgment + trading discipline + strict risk control. Beginners should first practice “not losing skills,” build a solid risk control foundation, and then gradually explore profit logic in order to gain a stable foothold.
$BTC