I see many newcomers to crypto often ask what futures are and whether they should participate. Today, I want to share some practical experiences on this topic.

Basically, futures are a leveraged trading method that almost all coin exchanges support. Its essence is predicting whether the price trend will go up (Long) or down (Short), then placing an order based on that prediction. If you're correct, you make a profit; if you're wrong, you incur a loss. It sounds simple, but in reality, the risks are quite high, especially for beginners without experience.

The most dangerous aspect is leverage. Exchanges allow you to use leverage up to X100. For example, if you have $1, using X100 means you can borrow an additional $99 to trade with $100. It sounds attractive, but when you lose, all your principal will be liquidated, wiped out completely. That’s why many people lose money in futures trading.

So, how can you control risks when trading futures? I have a few tips based on my personal experience.

First, you must use SL (Stop Loss) and TP (Take Profit). Most exchanges have automatic features for these two. When placing an order, always set these two points in advance; never leave them at default.

Second, regarding leverage, I recommend: if trading BTC, do not exceed X5. If trading ETH or Altcoins, X3 is reasonable. The higher the leverage, the greater the risk, and the closer the liquidation point.

Third, split your capital into multiple rounds. Instead of putting all in one order, divide it into parts to increase your ability to withstand losses. Also, try to keep a distance from the liquidation point as far as possible, so you don’t get liquidated just by a quick glance.

In summary, you now understand what futures are, but the important thing is to clearly understand the risks and how to manage them before participating. This is just sharing experience, not investment advice. Do your own research and think carefully before making decisions.