How to quickly understand the logic of making money in the crypto world, and how to earn the first 1 million in the crypto world?

Recently, many novice crypto enthusiasts are interested in contract trading but don’t know where to start. Today, I will share some basic knowledge about contract trading and some practical tips for beginners. Newbies, make sure to take note!
1. What is contract trading?
In simple terms, contract trading is when you and your trading counterpart agree to buy or sell a certain amount of digital currency at a specific price at a future point in time. You do not need to actually own this digital currency; as long as you correctly judge the price trend, you can make a profit. For example, with Bitcoin, if you think it will rise in the future, you can open a long position; if you think it will fall, you can open a short position.

2. What types of contracts are there?
1. Perpetual Contracts: There is no expiration date, and they can be held indefinitely. Their price is anchored by the funding rate and the spot price, with the funding rate settled every 8 hours, where long and short parties pay fees to each other based on the rate.
2. Futures Contract: Has a fixed expiration date, and at expiration, it will be settled at the spot price or through physical delivery. For example, current season contract, next season contract, etc.

3. Core Concepts and Operations
1. Contract size: The minimum trading unit of a contract. Each contract of different cryptocurrency may represent different values, for example, in the BTC/USDT perpetual contract, 1 contract may equal 0.001 BTC.
2. Leverage: You can use a small amount of capital to control a large investment, but both returns and risks are magnified. For example, with 10x leverage, a principal of 1000 yuan can operate a contract value of 10000 yuan. However, the higher the leverage, the greater the risk of forced liquidation.
3. Opening a position: It is divided into buying long (bullish) and selling short (bearish). For example, if the current price of BTC is 50000 USDT, you buy 10 long contracts with 50x leverage, occupying a margin of 10 USDT.
4. Closing Position: It means ending the contract trade and locking in profits or losses. You can choose to close at market price or at limit price.
5. Liquidation: When your margin rate falls below the maintenance level, the system will automatically liquidate your position to prevent further losses.

4. Risk Control
1. Control leverage: Beginners should try to keep it within 5 times. The lower the leverage, the smaller the risk of liquidation. With 10 times leverage, a 10% drop in the coin price could lead to liquidation; with 5 times leverage, a 20% drop in the coin price would lead to liquidation.
2. Set stop loss: The stop loss for a single trade should not exceed 3% of the principal. For example, with a principal of 100,000, the stop loss for each trade should not exceed 3,000. This way, even if you make three mistakes, you can still retain most of your principal and have a chance to turn things around.
3. Choose mainstream coins: Mainstream coins (such as BTC, ETH) have high manipulation costs by the whales, making their prices relatively more stable and experiencing fewer spike events.
4. Pay attention to trading times: Try to avoid the "liquidation peak period" around 3 AM, and choose to trade during the day (9:00 - 18:00).

Although contract trading in the crypto world has the opportunity for high returns, the risks are also significant. Crypto friends must first learn the basic knowledge, practice more with a simulated account, and then invest small amounts in real trading. Gambling is prohibited, and investment should be done with caution. The above is my personal opinion, and I wish everyone can gain something in the crypto world.