# Virtual Currency Contracts: A High-Risk Vortex That Ordinary Investors Should Avoid
Many people have heard that virtual currency contract trading can "gain big with small investments," but few truly understand the terrifying risks hidden behind it. This investment method is completely different from buying spot assets. The leverage of 10x or even 100x is like adding a double-edged sword to trading—a 1% price increase might make you 10%, but a 1% drop will make you lose 10%. If you encounter extreme market conditions, your account funds could be "liquidated" to zero in a matter of minutes. Even more troublesome are the funding rates and forced liquidation mechanisms in contracts. Sometimes, sudden market fluctuations can cause your account to be forcibly liquidated by the system before you even have a chance to react, leaving you with no opportunity to add to your position. Moreover, the virtual currency market lacks strict regulation, and price manipulation by large funds is common. A coin that was rising well yesterday might suddenly "crash" today. In such situations, technical analysis and fundamental research are almost ineffective, making it impossible for ordinary investors to predict market trends.
Most crucially, contract trading is essentially a speculative game that is highly addictive. Watching the numbers in your account fluctuate up and down, many people cannot resist frequent trading. When the market rises, they want to earn more; when it falls, they want to break even. Eventually, they are driven by greed and fear, making it difficult to even preserve their principal. Many friends around me who have tried contracts initially thought they could control the risks, but within a few months, most of them lost a large portion of their savings, and some even ended up in debt after borrowing money to trade. Historical data has already proven that more than 90% of ordinary people who participate in virtual currency contract trading end up losing money. This is not something we can handle. If you are not a professional trader with sufficient funds and psychological resilience, it is best to stay away from contracts. Behind those stories of "getting rich overnight," there is a high probability of countless people losing everything. The most important thing in investment is to preserve your principal. It is wise to stay far away from such high-risk pits.
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