Survival Rules of Leverage, Averaging Down, and Stop Loss in the Crypto World
1. The Truth About Leverage
Many people think that 100x leverage is riskier than 1x, but that's wrong. The floating profit and loss of 100x and 1x are the same—the key lies in trend judgment, entry points, and position management. Leverage is just a tool; used well, it’s a miracle tool, used poorly, it’s a noose. Personally, I prefer 100x because the margin ratio is small, allowing for more positions. When the trend is right but the entry point is bad, you can still average down with leverage. Remember: leverage doesn’t kill; it’s blindness that kills.
2. The Art of Averaging Down
Averaging down is not about filling the hole, but about expanding your gains. I usually average down at key support/resistance levels, not by averaging, but by directly entering 2-3 times to quickly lower the average price. Don’t foolishly average down all the way; that’s a slow suicide. In terms of position management, I never enter more than 25% at a time, no matter how big the market is. Full positions? That’s the epitaph of a gambler.
3. Taking Profit and Stop Loss: The Dignity of the Experienced
“You can buy, but it’s the master who can sell” is a saying we’ve all heard, yet 90% of people still hold on stubbornly. Take some profit off the table first and leave some bullets to let the profits run—greedy people end up counting stars on the rooftop. Stop losses must be decisive; don’t fall in love with your trades; market reversals happen faster than an ex.
There’s no holy grail in the crypto world; only those who survive are the winners. Control your hands, manage your positions, and leave the rest to the trend.
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