After playing in the crypto market for so many years, I’ve come to realize that perpetual contracts are essentially a psychological battle. People who make money aren’t necessarily the most technically skilled—they’re the ones with the steadiest mindset.

To be honest, when I first started trading perpetual contracts, I also went through the despair of consecutive liquidations. At that time, I placed orders purely on instinct. When I lost, I thought about trying to win it back, and it only pulled me deeper into the trap. Later, I understood that the core of trading perpetual contracts isn’t about predicting the market with perfect accuracy—it’s about trading within a framework of controllable risk.

I’ve read a lot of traders’ experience summaries, and I’ve stepped into plenty of pitfalls of my own. Slowly, I figured out a logic. First is the mindset. Many people treat losses as failure, but losses are actually part of trading. The key is to stay rational when you’re losing and not let emotions take control. Second, you need your own trading system. This doesn’t mean having complicated indicators—it means having clear rules across dimensions like entry, take-profit, stop-loss, and position management. The biggest taboo in trading perpetual contracts is operating randomly.

I especially want to emphasize risk management. Never go all-in—this is the most basic principle. My approach is to split my capital into several portions based on the maximum loss I can tolerate. For example, if you have a $200k account and your maximum loss is 20%, I’d divide it into three parts, with each loss capped at no more than 5% of the total capital. That way, even if you keep making mistakes in a row, you still have a chance to turn things around. As long as you still have ammunition, you still have opportunities.

As for technical analysis, the one I use most is MACD combined with candlestick patterns. When MACD forms a golden cross above the zero axis, it usually indicates that a new high is likely coming; when it shows a death cross below the zero axis, it typically suggests a new low. But the most important thing is learning to read divergences. When the coin price makes a new high but the MACD red histogram doesn’t reach the previous high, this is often a signal to escape the top. And vice versa. In my own experience, using MACD together with the Bollinger Bands and moving averages can improve the probability of catching trends by quite a lot.

There’s another issue in trading perpetual contracts that’s easy to overlook—entry timing. You can trade 24 hours a day, but that doesn’t mean you should trade 24 hours a day. I generally wait for the second dip or a move higher after a bigger fluctuation before entering, because at that point the market is relatively stable and the risk coefficient is lowest. When indicators aren’t aligned, I decisively don’t place orders. This kind of self-discipline is very important for long-term profitability.

One more thing to remind you: perpetual contracts do carry liquidation risk. The higher the leverage multiple, the lower the tolerance for adverse price movement. With 10x leverage, an adverse move of 10% can liquidate you; with 100x leverage, an adverse move of 1% can liquidate you. Pin-action moves are also a problem. The market may swing violently for a moment and then quickly recover, which can easily trigger your stop-loss. There’s also the grind of funding fees—although each instance seems small, the total cost can add up significantly over long-term holding.

My advice is: when trading perpetual contracts, you must have discipline for take-profit and stop-loss. Each stop-loss should not exceed 5% of your total capital, and each winning trade should be greater than 5%. Keep your win rate at 50% or higher, and over the long run you can achieve profitability. Rather than trading constantly, wait for high-probability opportunities. Many beginners trade every day; but once you overtrade, you’ll inevitably make mistakes. After making mistakes, your mindset worsens, and in the end it often turns into a chain reaction of errors.

At the end of the day, the most stable way to trade perpetual contracts is to pick the right direction, control risk, and stick to discipline. In an uptrend, choose to go long on the stronger coins; in a downtrend, short the weakest coins. Once you’re in profit, take some off the table first, and set the remaining position with a break-even stop-loss. That way, you can participate in the move while also protecting your principal.

In the crypto market, the winners in perpetual contracts aren’t the ones who predict the market best—they’re the ones who live the longest.