Having navigated the crypto world for five years, I have seen too many stories. Some people make enough in one night to equal ten years of wages, while others lose half their life savings in just half an hour. Today, I want to discuss this topic: contract trading. It may seem like a trading tool, but in reality, it’s a battle of human nature.

**Leverage: The stepping stone for the poor’s dreams, and the meat grinder for wealth**

The math is simple: using 10,000 yuan with 100x leverage, as long as the market rises by 1%, your account can gain 10,000 yuan. With this calculation, your monthly salary is instantly achieved. The question is—when will this 1% fluctuation occur? Maybe you’ll wait a day, maybe a week, or maybe in the next second, the market will reverse sharply, causing you to be liquidated.

Remember the market movement in December last year? Bitcoin plummeted 5.9% in a single day, directly causing 190,000 traders to be liquidated, with losses totaling $550 million. Traders holding more than 10x leverage, even if their market direction was correct, would still be wiped out if they couldn’t withstand this fluctuation. Even more absurd, some platforms offer leverage up to 125x, where a mere 1% price movement can lead to instant liquidation—this is no longer investing, it’s pure gambling.

Why do people still flock to it? For small investors, leverage is the only way to turn things around. Working for ten years to save 100,000 yuan, a 10% increase in spot trading only earns 10,000 yuan; but with 10x leverage, the same fluctuation can earn 100,000 yuan in one shot. In an era of widening wealth gaps, many prefer to take a gamble rather than be slowly swallowed by inflation.

How do big funds play? Experts only use 5% of their positions with 3 to 5x leverage, setting tight stop-losses, taking profits without chasing, and not stubbornly holding onto losses. Their goal isn’t to get rich overnight but to hedge spot risks with leverage or engage in arbitrage trading.

**The truth behind contract trading: it’s not about the thrill of making money, but about that “controlled loss of control”**