Contract trading, at its core, is just spot trading with leverage.

It sounds fancy, but essentially it just amplifies both gains and losses. Money comes in fast, but evaporates even faster—want to sit at the table? Learn the rules of the game first.

# Two Common Pitfalls

**Don’t ignore the funding rate.** Positive funding rate? Longs are paying shorts a bonus. If you rush in to buy at this point, you’re just handing your money over. Negative funding rate is the opposite and often signals that the price hasn't dropped enough yet.

**Don’t mess around with leverage.** Leverage is like a magnifying glass—your profits double, but so do your losses. Beginners should stick with 3x to 5x leverage. Anything above 10x? That’s for professionals, not a place for you to gamble with luck.

# Four Steps to Trade Steadily

**Start with the big picture.** Don’t stare at the 1-minute chart all day; only the daily chart tells you the real trend. Moving averages and MACD have something to say—understand them before you make a move.

**Find the right entry point.** Wait for a 4-hour pullback to the middle Bollinger Band with the RSI starting to turn up—those are reliable entry points. If trading volume spikes along with a breakout pattern, that’s even better.

**Set your stop-loss in advance.** Don’t get lucky. Exit immediately if your preset stop is hit—hesitate for even a second, and you might get liquidated.

**Take profits when it’s time.** Up 10%? Lock it in. There’s always another opportunity in the market—greed will only make you give back your gains.

# One Last Word of Advice

Never use more than 30% of your capital on a single position. Contract trading isn’t about who makes money the fastest, but who survives the longest. The market will always come back, and opportunities will always be there—but if you lose all your capital, the game is over for good.