Attention all contract traders facing liquidation! Here's some valuable information!
Why do contracts often face liquidation? It's not just bad luck; it's because you haven't understood the essence of trading! This article condenses ten years of trading experience into low-risk principles that will completely change your perception of contract trading—liquidation is never the market's fault, but a time bomb you set yourself.
Three Major Truths that Disrupt Perception
Leverage ≠ Risk: Position size is the lifeline
Using 1% position with 100x leverage, the actual risk is only equivalent to 1% of a full position in #Bitcoin. One student used 20x leverage on ETH, only investing 2% of their principal each time, and has a three-year record without liquidation. Core formula: Actual risk = Leverage multiplier × Position ratio.
Stop-loss ≠ Loss: The ultimate insurance for your account
During the 312 crash in 2024, a common characteristic of 78% of liquidated accounts: losses exceeded 5% without setting stop-losses. Professional trader's iron rule: Single trade losses must not exceed 2% of the principal, equivalent to setting a 'circuit fuse' for your account.
Rolling positions ≠ All-in: The correct way to compound
Laddered position building model: Initial position 10% for trial, increasing position by 10% of profits. With a principal of 50,000, the first position is 5,000 (10x leverage), and every time there’s a profit of 10%, add 500. When BTC rises from 75,000 to 82,500, the total position only expands by 10%, but the safety margin increases by 30%.
Institution-level risk control model
Dynamic position formula
Total position ≤ (Principal × 2%) / (Stop-loss margin × Leverage multiplier)
Example: For a principal of 50,000, with a 2% stop-loss and 10x leverage, the maximum position calculated is = 50,000 × 0.02 / (0.02 × 10) = 5,000.
Three-tier take-profit method
1) Take profit 1/3 at 20% gain 2) Take profit another 1/3 at 50% gain 3) Move stop-loss for the remaining position (exit below the 5-day line)
In the 2024 halving market, this strategy grew a principal of 50,000 to a million in two trends, with a return rate exceeding 1900%.
Hedging insurance mechanism
When holding positions, use 1% of the principal to buy Put options, which can hedge 80% of extreme risks. In the black swan event in April 2024, this strategy successfully preserved 23% of the account's net value.
Deadly trap empirical data
Holding positions for 4 hours: Probability of liquidation rises to 92%
High-frequency trading: Average 500 operations per month results in a 24% loss of principal
Profit greed: Not taking profits in time leads to an 83% profit retracement in accounts
