🚀🚀🚀 The golden rules of contract trading honed over ten years of practical experience!!!
—— Taming market volatility with discipline
I. Core Iron Rules that Disrupt Cognition
1. The Truth of Risk: Leverage × Position = Lifeline
Using 100x leverage with a 1% position, the risk is equivalent to 1% of a fully invested spot position. A certain trader used 20x leverage to trade ETH, investing 2% of capital in a single trade, and avoided liquidation for three years. The formula reveals: risk is controlled by position, not by leverage itself.
2. Stop-Loss Rule: 2% Circuit Breaker Mechanism
78% of liquidated traders held their positions when losses exceeded 5%. The professional iron rule: single trade loss ≤ 2% of capital. Like a circuit breaker, 2% is the critical threshold for system survival.
3. Rolling Position Wisdom: Profits Feed Positions
Initial position of 10% for trial and error, reinvest 10% profit into the position. With a 50,000 capital, the initial position is 5,000 yuan (10x leverage). When BTC rises from 75,000 to 82,500, reinvest 500 yuan of profit, total position increases by 10% but volatility resistance improves by 30%.
II. Institutional-Level Practical Tools
- Position Formula: Total Position ≤ (Capital × 2%) / (Stop-Loss × Leverage)
Example: 50,000 capital, 2% stop-loss, 10x leverage → Maximum position 5,000 yuan
- Three-Stage Take Profit: ① Profit 20% reduce by 1/3 ② Profit 50% reduce by another 1/3 ③ Remaining position exit when breaking the 5-day line (achieving 19x return during the 2024 halving market)
- Black Swan Protection: Buy Put options with 1% of funds to hedge against 80% of extreme risks (saving 23% net worth during the April crash)
III. Blood and Tears Data Warning
- Holding positions for over 4 hours → Liquidation rate 92%
- 500 trades per month → Erosion of 24% of capital
- Failing to take timely profits → 83% profit retracement
IV. Mathematical Deconstruction of Trading Essence
Expected Profit = (Win Rate × Profit Rate) - (Loss Rate × Loss Rate)
Setting a 2% stop-loss / 20% take profit, a 34% win rate is enough to be profitable. Professional players achieve annualized returns of over 400% with a 1.5% stop-loss + 15% take profit.
V. Eternal Discipline
1. Single loss ≤ 2% (Lifeline)
2. Annual trades ≤ 20 times (Characteristics of top hunters)
3. Profit-loss ratio ≥ 3:1 (1 yuan risk for 3 yuan profit)
4. 70% of the time in cash (waiting is more important than trading)
The essence of the market is a probability game; top traders capture trends with 2% risk. Remember: controlling losses is the foundation of survival, and profit is a byproduct of discipline. Establish mechanical rules that make discipline replace emotion—this is the ultimate answer to navigating bull and bear markets.
