Tutorial on contract speculation

Contract trading is a method of leveraged trading that allows traders to magnify returns and risks. It is divided into two types: delivery contract and perpetual contract. The principle of contract speculation is to use small amounts of funds to leverage larger market positions through contract multiples, margins and underlying assets. The operation steps include opening, holding and closing positions. Contract currency speculation involves leverage risks, liquidation risks and market fluctuation risks. Therefore, you need to carefully select the contract multiple and margin, stop losses in a timely manner, and understand the risk-return mechanism.

Tutorial on contract speculation

1. The concept of contract speculation

Contract speculation is a method of leveraged trading that allows traders to leverage larger market positions with small amounts of funds, thereby amplifying returns and risks .

2. Types of contract currency speculation

• Delivery contract: Settled into spot assets on the contract expiration date, such as Bitcoin or Ethereum.
• Perpetual Contract: There is no clear expiration date and can be held indefinitely.

3. The principle of contract speculation

• Contract multiple: indicates the leverage ratio, for example, 5 times means that the transaction size can be enlarged by 5 times.
• Margin: Used to resist market fluctuations. When the loss exceeds the margin, the position will be forced to be liquidated.
• Underlying asset: The underlying asset of the contract transaction, such as Bitcoin or Ethereum.

4. Operation steps for contract speculation

1. Open a position: Select the contract type, contract multiple, margin and direction (long or short).
2. Position: Adjust margin or close position according to market conditions.
3. Close the position: Close the position and exit the contract when the expected profit or loss is reached.

5. Risks of contract speculation

• Leverage risk: Leverage magnifies the size of the transaction and also magnifies the risk.
• Liquidation risk: When the loss exceeds the margin, the contract will be forced to be liquidated, resulting in a total loss.
• Market fluctuation risk: The contract market fluctuates greatly, which may lead to unpredictable gains or losses.

6. Precautions for contract speculation

• Choose the contract multiple and margin carefully.
• Stop losses in time to control risks.
• Understand the risk and return mechanism of the contract.
• Use professional trading platforms and tools.
• Continuously learn and improve your trading skills.

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