Why Do Accounts Keep Burning Out, Yet Players Still Rush into Contracts?

Leverage in contract trading is like a double-edged sword: it can elevate you to the top in an instant, but it can also pull you straight down into the abyss in the blink of an eye. Many have witnessed their accounts being “blown up,” yet the flow of people entering this market has never stopped. I have been among them. On my first day trading contracts, I had 10,000 USDT in hand. I confidently thought: “Using 5x leverage should be safe.” But in less than three days, my account balance was less than 2,000. Looking back, I realized: although I only opened 5x on paper, my entry methods and capital management made the actual risk no different from 40–50x. The market just experienced a slight shake, and I became a victim of liquidation orders. After a series of account blowouts, I had to change. Not by luck, but through strict rules and discipline. This article will help you understand: why contracts are deadly attractive, why most people lose money, and how to survive long-term if you still choose this path.

1. The Deadly Attraction of Contract Trading The biggest appeal of contracts lies in the ability to “take small risks for big gains.” With $1,000, just using 100x leverage, you can trade a volume equivalent to $100,000. A 1–2% price increase is enough to make many people dizzy with profit. Compared to traditional markets, this is rare. In stocks, doubling your account usually takes months or even years. But in contracts, a short-term fluctuation can bring huge profits — or wipe out your capital entirely. Additionally, contracts allow for two-way profit. Whether the market goes up or down, there are opportunities, as long as you guess the right direction. During a downtrend, this becomes even more attractive for those who don’t want to “sit and watch their accounts vaporize.” In the right perspective, contracts also serve as risk hedging tools. For example: if you hold Bitcoin long-term but worry about short-term corrections, opening a short position to hedge your portfolio is perfectly reasonable. The problem is: most traders don’t use contracts for protection but for betting.
2. Contracts Are Not Gambling – What Do Rational Traders Do Differently? I once knew a veteran trader. He spent over 70% of his time observing, not entering trades. But whenever he did, his orders were neat, decisive, and well-planned. This was completely opposite to most beginners — who always want to “have a position in the market.” Professional traders don’t rely on feelings; they rely on trading systems. That system includes: Entry and exit rulesClear stop-loss pointsReasonable risk/reward ratio (R:R)Risk management of position size and leverage Regarding analysis, they combine multiple factors: Technical: candlestick patterns, support-resistance zones, RSI, MACD…Fundamental: industry trends, macro news, market flow Most importantly, they control risk. Each trade only risks 1–2% of total capital. With a $10,000 account, the maximum loss per trade is about $100–200. This way, they can lose many consecutive trades and still have capital to continue.
3. The Truth Behind Account Blowouts: Why Do Most Become “Paying Tuition”? The root cause of account blowouts is price volatility exceeding margin capacity. The higher the leverage, the narrower the “safety zone.” Common mistakes include: Overusing leverage Just using 10x, a 10% adverse move nearly wipes out the account. In crypto markets, 5–10% fluctuations happen very frequently. Not setting stop-losses Hoping for a price reversal is the trader’s number one enemy. When the market moves against you, “holding the position” only makes losses grow until liquidation. Trading on emotion After a few losing trades, many increase leverage to “recover.” From 10x jumping to 50x, then 100x. Behind this are greed and loss of control. Extreme short-term volatility (wick, spike) Rapid price sweeps may not affect long-term holders much, but with high leverage contracts, even a small fluctuation can trigger liquidation.
4. Anti-Blowout Guide: Building a Personal Trading System To survive, you need a comprehensive risk management system. Scientific capital management Beginners should only use 5–10x leverageRisk per trade should be no more than 1–2% of total capital Clear stop-loss Possible methods: Set stop-loss at fixed price levelsStop-loss based on support-resistance levelsStop-loss as a percentage of account Monitoring and alerts Use price alerts, especially when major news hits the market. Don’t let emotions decide when to close a position. Psychological discipline Accept losses as part of tradingSet daily loss limits (for example 3%), and stop when reachedAvoid FOMO and revenge trading For beginners, demo trading is extremely important before using real money.
5. Long-Term Survival Path in Contract Trading Contracts are not a sprint race but a long-distance journey. Good traders don’t boast about big wins; they showcase steady capital growth. To go far, you need: Continuous learning: from macroeconomics to market behaviorRecord and review each tradeOnly use money that doesn’t affect your life In this market, surviving longer is more important than making quick money. Discipline is the biggest competitive advantage. Conclusion Many say contract trading is gambling. Actually, it’s not entirely true. Those who blow up their accounts are betting, while those making money are calculating. Knowing the theory is easy, but when faced with real volatility, maintaining calm and discipline is the greatest challenge. If you want to go far in the crypto market, build your own system, stick to principles, and see learning as the biggest investment. Finally, the most important question remains: are you ready to face your greed and fear?