Contract trading may seem simple, but in reality, the vast majority of beginners get wiped out as soon as they enter. I've seen too many stories of people risking less than 1000U trying to dabble in contracts, only to lose everything within two weeks. The problem is never the market itself, but rather that they never truly understand how to survive and make money.

Today, I want to discuss a practical trading approach—actually quite simple at its core, involving just two things: controlling position size and managing your mindset. Following this can help you avoid 90% of the pitfalls.

**Step 1: Don’t be greedy, learn to split your funds**

Never go all-in with 1000U. Divide it into 10 parts, and only use 100U each time for trading. The remaining 900U should go directly into a financial management account, so you don’t see it and it doesn’t bother you. As for leverage, beginners should stick to 20x—20x is enough. Using 100x or 125x will only make your mindset explode.

If you lose that 100U, stop immediately and spend 1-2 days reflecting. Cryptocurrencies like Bitcoin and Ethereum fluctuate daily, with big market moves every month. There’s no need to fear missing out. What you should fear is holding on stubbornly and losing your principal.

**Step 2: Learn to split your profits and lock them in**

After reflection, continue trading by splitting the remaining funds further, controlling each portion to around 90U. This way, even if you get liquidated once, the loss is limited.

Be decisive with profits. For example, if you make 300U, immediately withdraw 200U, leaving only 100U in your account to continue trading. This approach is to prevent black swan events—sudden market moves that wipe out all your profits, which do happen.

**Step 3: Understand the brutality of leverage**

With 10x leverage, if you’re wrong on the direction, a 10% move against you will liquidate your position. Even if 90% of your trades are profitable, one big mistake with full position can wipe you out entirely. Therefore, position management is always the top priority—there are no exceptions.

**Red lines that every beginner must memorize**

If you don’t understand the market, learn first—don’t rush to open positions. Use small funds to repeatedly test and gain trading feel and experience. If your daily loss exceeds 2% of your total funds, be alert. If it reaches 6%, close all losing contracts immediately—don’t wait.

Set take-profit orders at a level that preserves your capital, then rest for 2-3 days to cool down. Chasing gains is exciting, but when adding positions, either do it early in one go or wait for a pullback and add gradually using the pyramid method—don’t add blindly at high levels.

When profits exceed 200%, set half of your position with a 40% retracement stop-loss to lock in most of the gains, and the other half with a break-even stop-loss to protect your principal.

**Mindset is more important than technique**

When you’re in a bad mood or troubled, don’t enter the market. If you’ve lost money within 24 hours, stop and rest—don’t keep fighting. Avoid trading against the trend or making frequent trades; wait for the right opportunity. The correct trading approach is to keep a core position and let it gradually generate profits.

**Final practical tips**

Start with 30-50U, and 20x leverage is enough. Set a stop-loss at the moment of entry, limiting losses to within 20-30 dollars. Use a profit retracement of 30% as your take-profit strategy. Deposit 500-1000U each time, and withdraw profits promptly when you make money.

In the early stage, focus on practicing your feel for the market and honing your skills. Build a solid foundation before considering increasing your position size. A steady, patient trading career will always last longer than rushing for quick gains.