Currency circle contract trading is a derivative trading method that uses a small amount of funds to control assets with larger value. It allows traders to speculate on the price trends of crypto assets without actually owning them. Entering the contract market requires understanding its basic operations and related concepts.

How to open a position in the currency circle contract market

1. Choose a cryptocurrency trading platform that provides contract trading services and complete account registration and real-name authentication.

2. Transfer funds to the contract account, which is the margin for the transaction.

3. Select the cryptocurrency contract you want to trade in the trading interface, such as BTC perpetual contract.

4. Set the leverage multiple. Leverage can amplify potential gains and also significantly increase potential losses .

5. Select the opening direction. If you think the price will rise, choose Buy Long; if you think the price will fall, choose Sell Short.

6. Choose the order type. Common ones include Market Order and Limit Order. The market order will be sold immediately at the current optimal price, while the limit order will need to set a specific price and will only try to complete the transaction when the market reaches this price.

7. Enter the opening quantity or margin amount, and confirm placing an order to complete the opening operation.

What does a perpetual contract mean?

1. Perpetual contract is a special futures contract in the currency circle. It does not have traditional expiration date or settlement date.

2. It anchors the contract price to the spot price through a mechanism called "funding rate". When the contract price is higher than the spot price, the long-direction holder needs to pay the capital fee to the positioner in the short-direction; when the contract price is lower than the spot price, the short-direction holder needs to pay the capital fee to the positioner in the long-direction. This rate is exchanged regularly.

3. Unlike traditional futures, holding a perpetual contract does not have the pressure to close positions when expiration. Traders can freely choose the closing time according to market conditions, unless they are forced to close positions due to insufficient margin due to losses, that is, "loss of position".

4. This design makes perpetual contracts one of the most popular contract types in the currency circle, providing a high degree of flexibility .

The teaching guide for beginners in contract trading

1. Understanding and mastering risk management is the primary step in conducting contract trading. Never invest money that exceeds your ability to trade.

2. Be familiar with the working principle of leverage. High leverage means high risks, and a slight price fluctuation may lead to huge losses or even liquidation of positions . It is recommended that novices start with low leverage.

3. Learn to use Stop-Loss orders. Stop loss orders can help you automatically close your position when your losses reach a preset level, limiting the maximum loss . This is an important tool for risk control.

4. Use small amounts of funds to conduct simulated transactions or actual transactions first, accumulate experience gradually , and do not rush to achieve success.

5. Understand the uses of different order types and choose the order type that suits your trading strategy. For example, a limit order can help you complete transactions at the expected price, while a market order ensures rapid transactions.

6. Continue to learn market knowledge and trading strategies. The complexity of contract trading is higher than that of spot trading and requires more expertise and experience.

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