I just saw many new friends asking about what futures are and how to avoid getting wiped out when trading. Today, I want to share some personal experiences about this type of trading.

Actually, futures, also known as contracts for difference, are a popular leveraged trading method on many exchanges today. Essentially, you place orders based on your price trend predictions — either Long (predicting an increase) or Short (predicting a decrease). If your prediction is correct, you make a profit; if not, you lose. However, this type of trading carries significant risks, especially for beginners.

The most dangerous aspect is leverage. Exchanges allow up to x100 leverage, meaning you can trade with $1 but borrow an additional $99 to have $100 in trading capital. The problem is, if your trade goes against you and results in a loss that reaches your initial capital, your position will be liquidated — meaning your entire initial investment is wiped out. That’s why you need to be extremely careful.

I’ve learned two very useful tools: SL (Stop Loss) and TP (Take Profit). Most exchanges have automatic features to set these points. I recommend always using them when placing orders.

Based on my experience, I have a few small rules for beginners trading futures. If you’re trading BTC, keep the maximum leverage at x5 or below. For ETH and altcoins, x3 is a safer level. Another tip is to split your capital into multiple parts to increase your ability to withstand losses, and pay attention to the liquidation point — try to keep it as far away as possible to avoid sudden liquidation.

Remember, this is just personal experience sharing, not investment advice. Be sure to do your own thorough research before participating in futures trading on any exchange.