Under high leverage operations, getting rich overnight and losing everything are often separated by just a price fluctuation. To be honest, many people have entered the market, but only a few can walk away unscathed in the end.

"Five days to turn 2,000 yuan into 60,000!" Not long ago, a novice friend called me, and I could hear his excitement through the phone — he had already mentally spent the money several times. His voice was full of confidence, as if he had just unlocked some secret code.

And what happened? Before a week passed, the nightmare began. "60,000 yuan, in the blink of an eye, turned into just a few hundred." The other end of the line was silent for a long time. He said he now spends every day staring at the market from dawn to dusk, unable to eat, unable to sleep.

I've heard this kind of story so many times that I'm tired of it. Having been in this circle for so many years and analyzing countless cases, I have to say a harsh reality that everyone can't ignore: for most ordinary people, contract trading is a one-way street with no return.

**What’s the difference between contracts and spot trading?**

First, you need to understand what contract trading really is. Simply put, what you are trading is not the actual cryptocurrency, but a "contract."

Spot trading is straightforward — if you buy Bitcoin, you truly own Bitcoin, stored in your wallet, and you can handle it however you like. Contracts are different; you're just betting whether the price of the coin will go up or down. You don't actually own the underlying asset.

The two most attractive features of contracts are: the ability to operate in both directions and the use of leverage.

Bidirectional operation means you can profit whether the price rises or falls — as long as you judge the right direction. Going long is betting on the price going up, going short is betting on the price going down. No matter how the market moves, you have a chance.

Leverage is even more incredible; it amplifies your fighting power directly. For example, what does 10x leverage mean? With 1,000 yuan, you can control a position worth 10,000 yuan. Sounds awesome, right?

But this thing is like holding a double-edged sword. When you make money, it happens incredibly fast; when you lose money, it can happen in the blink of an eye. With 5x leverage, if the coin price rises by just 2%, your account can make a 10% profit. Conversely, if the price drops by 2%, you lose 10%. If it continues to fall, there’s no buffer — your account will be wiped out instantly due to the 'forced liquidation' mechanism.