Rules of Survival in Trading: The 'Art of Losing' That Top Traders Are Reluctant to Share
Veteran traders who have immersed themselves in Wall Street for years often say: 'The market rewards correct losses and punishes incorrect profits.'
This statement reveals the core paradox of the trading world; success lies not in the pursuit of winning every battle, but in mastering 'how to fail gracefully'. Below are trading principles validated by hundreds of millions in capital, each word is worth its weight in gold.
1. The Underlying Logic of Loss Control
The 2023 FTX collapse taught us a vivid lesson: those traders who survived kept their average single loss below 1.2%, while those who faced liquidation typically suffered losses exceeding 15%. This confirms the golden rule of trading.
You can choose the manner of your loss, but you cannot choose to avoid loss.
Expectation Management Matrix
Acceptable Loss: 1-2% of total account (psychological comfort zone)
Alert Loss: 3-5% of total account (strategy must be reassessed)
Catastrophic Loss: Over 7% of total account (system has failed)
2. Four Life-and-Death Contracts Before Opening a Position
Professional traders will sign this 'self-contract' before placing an order.
1. Entry Reasons (must meet all criteria)
Technical: Break above the 3-day high and RSI exits the oversold zone
Fundamental: Significant accumulation signals from whales on-chain
Sentiment: Social media fear and greed index < 30
2. Stop-Loss Red Line
Spot: Falls below the previous low or key support level by 3%
Contract: Margin loss reaches 5% of the opening amount
3. Profit Blueprint
First Target: 1:1 risk-reward ratio (if stop-loss is 5%, then profit 5% and reduce position by 30%)
Second Target: 1:3 risk-reward ratio (profit 15% and reduce position by 50%)
Ultimate Target: 1:5 and above (retain 20% of the base position)
4. Doomsday Plan
Black swan event response (e.g., exchange crash, sudden policy changes)
Maximum drawdown control (single-day loss not exceeding 2% of total capital)
The cryptocurrency world is never a battlefield of technology but a Shura field of execution.
Like and bookmark, keep the master safe! In the next bull market, let’s tear open the cracks of wealth!
