Everyone, before you press the place order button, take a moment to pause. Let me spend two minutes explaining the contract trading lesson thoroughly.

Many beginners get scared at the word "contract" and think it's some kind of mysterious financial black magic. In reality, it's simply adding leverage to spot trading. When you make money, it happens quickly, but when you lose, the speed is just as fast.

If you really want to play with this, first focus not on how much you can earn, but on understanding the game rules thoroughly.

**Don’t mess around with the fee rates**

Funding rates determine the direction of money flow. When the rate is positive, longs are sending money into the shorts’ wallets. Do you still blindly chase longs at this point? Basically, you're adding fuel to the rising trend at its top. Negative rates mean the opposite: shorts are paying longs, usually indicating the market hasn't bottomed out yet and sentiment is still in the release phase.

Leverage is even more ruthless. It’s a magnifying glass—you get doubled when you're right, and nothing when you're wrong. Beginners should honestly stick to 3 to 5 times leverage. Over 10x? That’s a playground for professional players, not for gambling on luck.

**So how can you trade contracts properly?**

I summarize it into four steps. The method is simple but very effective.

*Step 1: Look at the big picture*

Don’t just stare at the 1-minute K-line for a feel; at least check the daily chart. Moving averages, MACD indicators—they tell you where the current trend is heading. If the overall direction is wrong, no matter how perfect the technical details are, it’s useless.

*Step 2: Choose the right entry point*

On the 4-hour chart, when the price retraces to the middle band of the Bollinger Bands and RSI starts turning upward, that’s a good signal. If trading volume suddenly spikes and breaks out of consolidation patterns, even better. Don’t expect to always buy at the lowest point; making money isn’t about bottom fishing, it’s about direction and rhythm.

*Step 3: Set stop-loss first*

This is the easiest step to overlook. Before opening a position, ask yourself: what if I’m wrong? Pick a stop-loss price and stick to it—don’t leave room for self-deception. Liquidation doesn’t happen overnight; it’s the result of repeatedly refusing to cut losses, snowballing into disaster.

*Step 4: Know when to take profit*

Take profits and cash out, even if it’s only 10%. Market cycles will always repeat, and the next opportunity won’t be missing. Greed only causes the profits you’ve already earned to slip away from your hands.

**And one bottom line for safety**

Use no more than 30% of your capital on a single position. Once your position size increases, your mindset can quickly spiral out of control. The market isn’t about who earns the fastest, but who can survive long enough.

Market trends will come, opportunities are always there. What’s most precious? Whether you can hold onto your principal until your moment arrives.