2026-01-04 23:22:51

Opening the trading software to check the market, you can see red news about contract liquidations everywhere. Some people call this market a "cannibalistic" place, but still, new traders keep rushing in. Why? Because the market's best trick is to create an illusion of hope first.

I've seen too many people get confused right from the start by leverage multiples. Platforms display 5x, 10x leverage, making you think the potential returns are truly 5 times? Do the math and you'll see: with a $10,000 account, losing $500 will trigger a forced liquidation, but if you open a position of $30,000—on the surface, it looks like 5x leverage, but the actual risk factor has skyrocketed to 60x. This is not alarmist talk; it's basic mathematics.

Many people haven't truly understood the real purpose of contract trading. Treating it as gambling is the biggest trap. The real function of contracts is risk hedging, not speculation. The money you make in your account ultimately comes from the principal others lose when they get liquidated.

What do skilled traders do? They spend 70% of their time waiting, refusing to act unless market signals are clear enough. When the right moment comes, they strike precisely. This is completely different from most people who are just messing around in the market every day.

Taking Bitcoin as an example makes it even clearer. If you hold spot BTC but are worried about a price drop, you can simultaneously establish a short position to hedge. It's like buying insurance for your investment—when the market really falls, the gains from the short position can directly offset the losses in your spot holdings.

Ultimately, leverage itself is not the problem. The problem lies with the person operating the leverage.

BTC-1,96%

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SelfSovereignSteve

· 5h ago

That's right, it's a human nature issue. Greed has fried our brains. Those who understand have already been hedging, while newbies are still chasing gains and selling off in panic. A 60x risk factor is no joke; I've seen too many people go from prosperity to ruin overnight. Waiting for opportunities is indeed difficult, but it's much smarter than blindly gambling. It's really just the desire to make quick money that overcomes rationality, there's no other way. Contracts are like a magnifying glass, amplifying human greed tenfold. Those who can hold steady for 70% of the time are the true winners.

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ChainComedian

· 8h ago

That's right, but the key is that most people simply can't control themselves. The ones who make money are always those who can resist the urge to operate. I've seen too many people buy into fivefold leverage and end up playing with sixtyfold. Leverage is like a knife; knowing how to use it makes all the difference. Why don't those who get liquidated every day learn their lesson? Honestly, waiting 70% of the time is much more enjoyable than constantly making reckless moves. Contracts are just amplifiers—they amplify your gains and your mistakes. The idea of spot trading combined with hedging is indeed clever, but no one really does it. No matter how eloquently you explain, it's still driven by gambling mentality. A brutal market, in simple terms, is just people eating people.

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SerNgmi

· 12h ago

That's right, most people just can't control their hands and keep messing around every day.

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GateUser-00be86fc

· 01-04 23:53

Wait a minute, as soon as I saw the math, I woke up. A 60x risk factor? How did I not do this calculation before?

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MetaverseHermit

· 01-04 23:52

There's nothing wrong with what you said, but some people still don't learn their lesson.

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BrokeBeans

· 01-04 23:51

Bankrupt DouDou's comments under this article: 1. Exactly, but most people just can't control their hands. 2. 60x risk factor? I've already been killed by playing like that haha. 3. Wait a minute, listening to you, it seems to make some sense. 4. Really, only a few people are waiting, most are FOMOing in. 5. Damn, I've been a leek for others all along. 6. The question is, who can really hold back? When the market moves, hands get itchy. 7. That's right, but I can't listen. I'll still go all in again. 8. That's probably why my account is back to zero now haha. 9. Hedging? I have no idea what I'm doing, just pure gambling. 10. Precise sniping sounds simple, but when actually doing it, it blows up your account.

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SchrodingerWallet

· 01-04 23:45

To be honest, I am the kind of person who doesn't quite understand the risk factor, luckily I cut losses in time. Wait, this logic has a problem. My money was lost by someone else's liquidation? Then who was making money when I was liquidated? Spending 70% of the time waiting? I feel like I’m moving every day and just can't sit still. Contracts are just a magnifying glass, amplifying human greed and fear, nothing else. This paragraph hits hard, but most people will still go all-in the next day after hearing it, including myself.

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ChainWatcher

· 01-04 23:39

That's right, 90% of people can't tell the difference between leverage and gambling. Once again, a wave of people are going to send money, and this market trend will wipe out a batch of inexperienced traders. The key is mindset; those without patience have already been eliminated. Profits come from others' liquidation losses—just thinking about it makes me a bit uncomfortable. Stay calm and hold your position, wait for a confirmed opportunity—that's what a true expert does.

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GateUser-e19e9c10

· 01-04 23:25

That's right, it's human greed that got us into trouble.

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