High-leverage contract trading may seem like a golden opportunity for quick wealth, but in reality, it is a place where countless retail investors see their fortunes disappear.

Not long ago, I heard about a trader who just graduated from college, using 50,000 yuan to enter the contract market. Within three days, their account doubled to 120,000 yuan, and they started thinking about quitting their job to become a professional crypto trader. Honestly, stories like this happen every day, but very few actually succeed in the end.

Having been in this industry for many years, I’ve seen many people grow their small accounts into millions, but I’ve also seen far more lose everything. Those who survive are not because they have extraordinary skills, but because they know what to give up.

**Why are leveraged contracts a trap?**

The volatility of the cryptocurrency market is far greater than traditional finance. Events like Luna’s collapse and UST’s de-pegging are quite common in this market. Contract trading is like magnifying this volatility — you might see your position go from profit to liquidation overnight.

Many beginners are attracted by promotions of "10x leverage" and "get rich overnight," but they don’t consider the other side of the risk. Even top coins can experience intense fluctuations, and a moment of carelessness can lead to huge losses. Once, I made 7 wrong trades in a single day; I had worked hard to earn 200,000 yuan, only to lose 150,000 yuan in the end. Only those who have truly experienced it understand that feeling.

**Traders who survive understand these points:**

First is setting stop-losses. Many people fall into the trap because they can’t bear to set a stop-loss. They keep thinking, "The market will rebound soon," but what they get instead is even bigger losses. Stop-loss should not be optional; it’s as essential as breathing.

Second is risk management. The size of each position and the leverage used should be calculated before entering a trade. Not based on feelings, and definitely not all-in.

Finally, mindset is crucial. The most destructive thing in this market is human rational judgment. Watching the account balance fluctuate easily leads to impulsive decisions. The more volatile the market, the more important it is to stay calm.

Contract trading itself is not the problem; the issue lies in whether participants truly understand what they are doing.