# The Harsh Truth About Contract Trading: One Step Away from Heaven or Hell

Contract trading has never been a gentle game. Some have turned their fortunes around with it, but more people end up losing everything. This is not an alarmist statement; it’s the harsh reality played out in the market every day.

Imagine entering the market with just a few thousand yuan, holding onto the dream of overnight riches. When the market twists and turns, and floating losses appear, your heart starts pounding wildly, and your fingers tremble as you toggle between closing positions and holding on. Many have experienced this feeling, and the vast majority’s outcomes are not very good.

Starting with an investment of 8,000 yuan, enduring countless sleepless nights glued to the screen. Every loss makes you irritable and your fingers tremble, nearly being forcefully swept out by the merciless market multiple times. Only later do you realize: a margin call never happens without reason. There’s always a trail— the root cause is hidden in your own cognitive flaws.

## The True Face of Leverage: Not Wings, But a Trap

Many beginners have an inexplicable illusion about leverage. They think that 3x or 5x leverage is enough to ensure stable profits. But the reality is far more brutal than imagined.

With each additional layer of leverage, the risk doesn’t grow linearly—it explodes exponentially. At the same time, you have to deal with other invisible killers: transaction fees are charged every time you open or close a position, slippage becomes outrageous during volatile periods, and frequent trading makes these costs pile up into a huge black hole. As a result, your principal is gradually eroded, and your account balance declines faster than you can react.

## Turning the Tide: Master the Correct Technical Approach

If I hadn’t delved deeply into the BOLL indicator later on, I might have been completely eliminated by the market.

The beauty of the BOLL band lies in its "opening" and "closing" signals. When these two key patterns appear, they often allow you to catch the early signs of a trend’s initiation—before most people even realize what’s happening, you already see the direction the market is heading. Using this correctly can help you truly escape the quagmire of margin calls.

However, mastering the indicator is just the first step. More importantly, you must understand that no technical indicator can predict the market with 100% accuracy. True trading experts rely on respect for risk and strict control of position sizes. Knowing when to enter the market is crucial, but knowing when to stay away is even more vital.