Why do contract trading cause people to suffer losses?

Ultimately, it's about using small amounts of money to leverage larger sums. You invest $10 but are actually controlling a $100 position; any market fluctuation can directly wipe out your principal. Even worse, after losing your capital, you still owe the exchange money—that's the true face of leverage.

Simply put, contracts are like gambling with borrowed money. Once the market moves against you, you're not just losing your own initial investment, but also the borrowed funds. Many people are confident, believing they have good judgment and luck, and want to quickly turn their fortunes around through contracts. Little do they know, leverage is a double-edged sword—it can amplify small gains into big profits, but also turn small losses into a margin call and liquidation. Plus, the crypto market itself is highly volatile, making it impossible even for seasoned traders to predict every rise and fall accurately.

What’s the final outcome? Many people just want to "give it a shot," but end up being forcibly liquidated, losing everything, and owing a huge debt instead of turning their fortunes around.

Contracts are fundamentally not suitable for ordinary traders, let alone beginners. The crypto market is already risky enough, and adding leverage is like pouring gasoline on a fire. A slight mistake can leave you penniless. If you really enjoy trading cryptocurrencies, it’s better to use spare funds to do spot trading steadily—don’t dream of getting rich overnight, at least you can sleep peacefully at night.

If you lack skills and no one guides you, I advise you not to touch contracts. It’s a game with no certainty, and the cost of participating is too high.