Contract trading may seem simple and straightforward, but in reality, it is a dual test of skill and psychology. Many newcomers rush in to play short-term, and after one or two trades, they get washed out. Today, I want to talk about how to survive longer in this market and avoid some obvious pitfalls.

First, it must be recognized that short-term trading in cryptocurrencies is the easiest way to go bankrupt. Especially for beginners, who often rely on luck to make a little profit, only to be wiped out after a single retracement. The problem with this approach is—volatility is too fast, and emotions are too easily affected. So the first thing to learn is not how to make money, but how to stay alive.

This leads to the second key point: take profit and stop loss must become habits, not options. The market is highly volatile; a price move can be several points. You need to decisively cut your position when conditions are unfavorable to prevent small losses from turning into big ones. Conversely, after making a profit, set a take profit point—don't wait for a reversal and watch your profits disappear—this feeling is even worse than losing money.

But all of this depends on having trading discipline. This is the hardest part. We always say to follow the plan, but when you actually lose money, your mind heats up—thinking about making one more trade to recover, and then you end up going deeper. So before each trade, set your take profit and stop loss levels and don’t change them. Also, set a daily trading limit to control your frequency. Greed is the biggest killer in this market.

Next is technical analysis. The market generally falls into two types: trending and ranging. Weekends are often ranging markets, and trading long-term during these times is like asking for trouble—take profits quickly when you see some gains. The real opportunities appear in trending markets, where buying on dips and shorting on highs can yield better profits. The key is to identify what kind of market you are in, rather than blindly chasing rallies or panic selling.

Trend identification is also very important—looking at daily and weekly candlestick charts can help you decide whether the next phase is up or down. If you rush into the market without understanding the trend, you’re basically gambling. The chance to turn the situation around is also half the battle won. Many traders end up leaving the market in poor shape because they chase rallies and sell in panic.

Finally, talk about position sizing and leverage. This is the core to avoiding liquidation. For example, if your account has $1,000, keeping margin ratio between 5%-10% is most reasonable, meaning using $50-$100 per trade, so you’re less likely to be wiped out in one sweep. Leverage should be adjusted based on market conditions—use high leverage for trending markets to enter and exit quickly for fast gains; but when the market is unclear, reduce leverage. When profits reach 20%-50%, consider taking profits; greedy traders often end up with poor outcomes.

The overall principle is: use high leverage for short-term trading to pursue efficiency, and low leverage for long-term trading to seek stability. Tie these points together—risk control is the priority, making money comes second. Living in this market is more important than how much you make.