Every day, there are liquidations in the contract market. Why do new traders keep pouring in? Frankly, most retail investors simply do not understand the real risks behind leverage.

Exchanges display 5x, 10x leverage, which sounds very attractive, but actual leverage is often seriously underestimated. For example, with a $10,000 account, theoretically losing $500 triggers liquidation, yet you might open a position of $30,000—on paper, 5x leverage, but the actual operational risk is 60x. This misperception is very common among retail traders, who still think their operations are safe, unaware that they are already on the edge of a cliff.

Experienced contract traders understand one thing: contracts are fundamentally risk hedging mechanisms, not gambling tools. Where does your profit come from? To put it bluntly, it’s the funds lost by others when they get liquidated. That’s why professional traders spend a lot of time waiting—if the market isn’t right, they stay on the sidelines. When the right opportunity comes, they strike decisively. Unlike many who spend all day messing around in the market, always trying to make a quick buck.

To survive in the contract market, two words are crucial: against human nature. Stay calm when others are panicking, and take profits when others are greedy. Stop-loss must be executed ruthlessly; a single loss should not exceed 5% as a basic rule. But when it comes to taking profits, be much more decisive—cash out as soon as profits are realized. The take-profit level should be at least twice the stop-loss.

Many beginners say that trading contracts is just gambling. That’s only half true. Yes, getting liquidated can feel like gambling because you rely on intuition; successful traders rely on calculation and logic. Everyone must refine their core trading logic on their own—there are no shortcuts.

If you’re still placing orders based on feelings, I seriously advise you to rest early and stop staying up late—dreams can be anything.

For those who want to accumulate steadily, reflect on whether your stop-loss discipline is truly in place and whether your mindset is stable enough. The contract market is always there; what matters is how you approach it.