Still getting liquidated repeatedly in contracts? 3 painful lessons + practical formula, teaching you step by step to say goodbye to the 'ATM' mentality! Leverage is not the monster; position size is the deadly key!
Truth: 100x leverage ≠ high risk. Real risk = Leverage × Position ratio
Correct posture: Use only 2% of capital to open positions with 20x leverage (for example, with a capital of 50,000, only use 1,000U), the risk is lower than fully invested spot trading! Case study: An experienced trader used 20x leverage for 3 years without liquidation, relying on 'position control'.
Stop loss is a lifesaver, not a loss acknowledgment!
Deadly misconception: 78% of liquidated traders hold on when losing 5%. Iron rule: Single loss ≤ 2% of capital (providing insurance for the account). Practical formula: Maximum position = (Capital × 2%) ÷ (Stop loss range × Leverage). Example: 50,000 capital + 2% stop loss + 10x leverage → maximum position of 5,000U.
Rolling positions is not gambling; it is a compound interest accelerator!
Incorrect action: Doubling the position directly after profit (risk increases dramatically). Winning posture:
First order: 10% of capital for trial position (50,000 capital uses 5,000U)
After profit: Use 10% of the profit to add to the position (if you earn 10%, add 500U)
For every 10% increase in position size, tighten the stop loss by 1%
Take profit in 3 steps, refuse to ride the roller coaster!
20% Lock-in: First sell 1/3 of the capital to secure basic profit
50% Re-throw: Sell 1/3 again, reduce holding cost
Follow the 5-day line: Sell all if the last 1/3 breaks below the 5-day line (trend reversal signal)
These 3 pitfalls will definitely incur losses!
Holding for over 4 hours: 92% probability of liquidation (the market won't wait for you to break even) Monthly trades over 500 times: transaction fees directly consume 24% of the capital. Greed without taking profit: 83% end up in losses (earning 100% is not difficult; the challenge is to hold on)
Finally, here's the money-making formula:
Profit expectation = (Win rate × Average profit) - (Loss rate × Average loss) Set 2% stop loss + 20% take profit, a win rate of 34% can ensure profit. Professional players rely on '1.5% small loss + 15% big gain', annualized 400%+
Must remember the iron rule:
Single loss ≤ 2% of capital
Annual trades ≤ 20 times (selecting opportunities)
Profit and loss ratio ≥ 3:1 (profits must be 3 times greater than losses)
80% of the time in cash (only seize certain opportunities)
Trading contracts is not about luck; it's a zero-sum game based on rules and discipline! Engrave this article in your DNA, next time you won't be the one liquidated. For questions, see the comment section, I will teach you how to customize a trading plan using this formula!
