In just a few days in the crypto space, over a million can be wiped out! This has happened before, leaving nothing but debris. A life-saving phrase for all newcomers: Lack of experience? Not playing is winning! Act according to your ability, it’s not cowardice; it’s wisdom.

An old saying goes, 'Stand on the shoulders of giants, and you can save ten years of effort.' If this article finds a brother who truly wants to survive in this industry, please read it carefully, digest it, and better yet, save it and review it repeatedly!

Contracts are not prepared for ordinary players! Managing money is a matter of survival! With 0-100x leverage, losing control can happen in a minute. The risk of a single bet should not exceed 2%-3% of your total capital. Novices shouldn’t exceed 5%-8%. Dare to bet 8%-10%? If you hit a bad streak, your account could be halved repeatedly! Most people’s mentality collapses when they lose 50%. If you can't control your hands, you’re seeking death! Many people like to use 5x or 10x leverage, but they’re looking at larger time frames like 4 hours or daily. Stop loss levels at this scale can easily be 5%-15%, and your single trade risk has already soared to 25%! This isn’t playing contracts; this is coffin-making! Want to play with high leverage and still survive? You must lower the time frame! 1 hour, 15 minutes, or even 5 minutes. The smaller the time frame, the more effort is required. 1-4 hours is the limit for ordinary people; 5-15 minutes is the territory of professionals, and 1 minute? Even most professionals can barely manage that!

A trading system is a lifeline, it must be solid! Polishing the system? That takes real money and time! The mark of success is: Only do what fits the model, and the conditions are as clear as cutting with a knife. In this process, you must iterate, experience bull-bear fluctuations, and endure the beatings of mainstream coins. Playing with leverage + T+0 + high frequency? Prepare for 90% tuition! Many people come in and throw in hundreds of thousands. Wake up! No matter how much your capital is, that money is only enough to pay tuition once! There are still eight more times waiting for you! Therefore, you must start practicing with small funds! A few hundred or a few thousand works! Even if you make a profit, don’t rush to increase your bets; take your profits out! Continue rolling with small amounts. At the beginning, both the system and operations are awkward, and there will be many errors. Online posts crying about losing hundreds of thousands? In my view, that loss is worthless! Tuition has been paid, but you haven't even touched the door; the learning curve hasn't improved, and it’s no different from throwing dice in a casino!

Execution is the iron rule! A black swan event like '519'; making a wrong bet on direction once means that all previous gains are worthless! Zero! Strict stop losses are fundamental, but more liquidations occur among those who blindly bottom fish against the trend! Isn’t the recent LUNA+ incident loud enough? Don’t gamble on low probabilities! Don’t think about turning the tables in one go! That’s daydreaming.

Time + experience = armor. If you haven’t gone through a complete bull-bear cycle, haven’t figured out the temperament of different coins at different stages, and can’t adjust your strategy according to the market? Then you’re running naked! Retail investors have limited time and energy; if they plunge into this professional slaughterhouse, how can they avoid being cut? A few ways out:

Try small amounts and learn (say it three times!).

Lock leverage at 2-3x or below! If you see the big trend + do good capital planning, you can consider 'rolling positions' (more on this later).

Only trade on 1-hour, 4-hour, or daily levels! Larger time frames are relatively stable.

If you are not a professional player, do not engage in contract short-term trading! Unless you are in a desperate situation, don’t think about becoming a professional player!

If you haven’t sorted out the previous four points, don’t invest more than 20,000! Treat that money as pocket change that won’t hurt if lost!

To be honest, contracts are a hundred times more brutal than moving bricks or spot trading! Don’t just focus on the few at the top; they are the 'golden bones' luring you in! Who doesn’t know that 'when one general succeeds, countless bones decay'? I hope for fewer tragedies and more wisdom. Light positions, follow the trend, and set stop losses. I hope these can save your wallet from disaster and prevent you from getting stuck in the casino mire. Only have 2000 bucks? Why play contracts? Even if you turn it tenfold in a year, that’s only 20,000; isn’t it better to set up a stall? How many people end up in dead ends, insisting on making it work, when the opportunity cost is too high? Act according to your ability!

I know that many people are struggling and feel that working won't change their fate, and hard work won't improve their lives. They hope to save some money and turn their fortunes around through investment (speculation) trading, like making their first million. There are also those who have some foundation at home, without worries about housing or cars, and just want to climb higher through trading, like reaching A8 (tens of millions). But the reality is, no one accepts 'slowly becoming rich!' They feel that being old with money is meaningless. So young people are anxious and want to get it all at once! What’s the result? Many rush into the crypto space, hoping to get rich quickly through contracts! Is this path feasible? Look at the internet celebrity Liang Xi, who made tens of millions, and now? Online loans, credit cards, and Huabei are all maxed out! It's a complete mess!

The 'poison' and knives of contracts: Crypto contracts are like a shiny meat grinder. The illusion of high returns makes people think wealth is just around the corner! Is it investing or gambling? The positioning of crypto contracts has always been vague. Compared to traditional investments, it has fewer rules and more variables. Playing contracts, at its essence, is betting on price fluctuations, using leverage to amplify wins and losses. Many people come in with overwhelming confidence, believing they have the brains and skills to make money. In reality? Most unknowingly fall into the gambling pit! Placing orders based on feelings and news, and understanding risks? Not a clue!

Risk and return? It's about the thrill! Leverage is a double-edged sword; when the market is good, you earn quickly, but when it turns, liquidation happens even faster! A small fluctuation can wipe you out. That enticing high return is like a drug, luring people to charge in recklessly. They only see others eating meat but are blind to others getting hit. Once greed sets in, it’s a path to destruction.

The bloody struggle of retail investors: The graveyard of educated youths: Many of my friends have high degrees, good jobs, and are knowledgeable, staying away from gambling and drugs, truly ambitious youths. Who would have thought that they are also struggling in the mire of contracts? Continuously losing, but unwilling to accept it! Constantly trying and summarizing, fantasizing about finding the 'holy grail' for stable profits. In front of outsiders, they must maintain the demeanor of financial elites: 'Those who work in finance, the market is an ATM.' When returning home for the New Year, relatives ask: 'What do you do?' 'I work in finance.' In fact, many people don’t understand anything! They were lured in by the myth of getting rich in the crypto circle. To make up for the regret of not getting rich in the stock market, they frantically study knowledge, learn strategies, hoping to make a name for themselves in the crypto space. The result? They chose the dead-end of contracts, being beaten by the market to the point where their mothers wouldn’t recognize them.

A common problem for retail investors: Blind confidence! There are too many such retail investors in the crypto circle! They all feel like they are the chosen ones! Seeing others make money makes them think they can do it too, and they dive in headfirst. They believe they can understand the market and predict prices, completely ignoring the market’s complexity and unpredictability! They place orders relying on superficial technical analysis or 'insider information,' disregarding risks! They always think they are smarter than others, able to seize every opportunity, unaware that they’ve already fallen into a pit! Blind confidence leads them to lose without stopping, instead increasing positions in hopes of recovering, resulting in deeper entrenchment.

Why can’t people climb out? The illusion of high returns: Leverage can double profits, making wealth seem within reach. This illusion, like a drug, makes people addicted. The crypto space is volatile, making it feel like gold is everywhere. Driven by greed, they jump in recklessly, knowing it’s a fire pit. Inner demons at play: Greed and luck are two major killers. When they make money, they want to earn more and refuse to leave; when they lose, they believe it will rebound and refuse to cut losses. The myth of getting rich in the crypto space is their 'spiritual opium,' making them believe they can be the next one, unwilling to let go no matter how much they lose.

Contracts have no chance of winning for most people! The market itself is unpredictable. There are also major players manipulating it, specifically to cut your leeks. After ten years of trading coins, I’ve gained blood-stained insights! How to prevent liquidation in contracts? When the market shakes violently, hide! Play both sides, exchanges pulling the network cable, prices spiking instantly. The best strategy at this point is to hide! If your hands are itching? Use light positions! Small amounts! Minimize risk! Altcoins with low volume spiking? Hide! Near the end of a bull market, BTC reaches peak areas, and altcoins are prone to sharp drops (spikes). Deadly! My principle: Only play BTC or major coins with high trading volume! Coins with low volume are explosively risky at this point! The drawdown red line: 50%! In my trading logic, the maximum drawdown is set at 50%. Always avoid liquidation! In summary: When risk is high, trade small or not at all; when risk is low, trade larger. But this 'degree' is really hard to grasp! Asset isolation! Always use less than 10% of liquid funds to trade contracts! Earn X times profit? Withdraw immediately! At the early stages, you can’t tell whether it’s skill or luck; locking in profits is the way to go! Then continue rolling with small funds. Look at the big names in the contract realm; most started with just a few hundred or a few thousand! If you don’t have a mine at home, don’t compare who has thicker capital!
Finally, I emphasize: It took me half a year to explore contracts myself; those at the front of the leaderboard, who hasn’t experienced a few liquidations? For novices, not playing is the best protection against liquidation! Act according to your ability!

So how to properly open contracts? In the crypto circle, $20 billion in contracts were liquidated in a month! Is the market out of money? Nonsense! What’s missing is the 'cohesive force' that can pull money together! Why is there such a massive liquidation? Is it all small funds gambling? Wrong! Both big funds and small funds want to get rich overnight! $20 billion in liquidations, assuming 1 million retail investors participated (which is not realistically possible for everyone to participate and all be liquidated), that’s an average of $20,000 per person. But over 90% of the recent liquidations are long positions! What does this indicate? It’s not just retail investors who are getting liquidated! Hundreds of billions in liquidations are a warning: 5x, 20x, 100x leverage are all walking on the edge! Risk is indiscriminate!

Why are many people afraid to buy recently? They are scared! Their mindset has collapsed:

'The bullets are all gone' (out of money)

'Continuous decline' (fear of bottom fishing halfway up the hill)

'Worry about gain and loss' (fear of losing yet wanting to win, chasing highs and cutting losses)

'Only watching without practicing' (hesitating and missing out)

'No guts' (fear of the unknown)
The first four points are essentially about insufficient awareness! Only those who truly understand the market have the courage to play. In addition to mindset, it’s crucial to establish your own practical contract system!

Investment master Van Tharp once said: 'What you are actually trading is not the market, but your understanding of the market.' This is your operating system—your understanding of the market and action guidelines. Building this system is hard! First, recognize yourself: Interests? Goals? How much do you understand? How much can you do? Where are your capability boundaries? Then comes: When to enter? When to exit? Which coin to play? How much to bet? What to do if you’re wrong? It’s not about jumping off a building, but about learning from failures! This path is difficult. Playing with coins and getting rich has no shortcuts; you need to learn, practice, reflect, and adjust. Building and validating a mature system requires going through two bull-bear cycles! The stock market may take 6-10 years; the crypto circle is recognized to have a shorter cycle of about 4 years, but it still takes at least 8 years of honing! This is a marathon, not a sprint! Many retail investors spend their whole lives chasing highs and cutting losses without any system. In my view, the root of liquidation comes from two things: Too high leverage + too heavy positions! Leverage and position size are tied together. High leverage must be matched with extremely low position sizes, and vice versa. Don’t blame market volatility; the market moves as it pleases. The only thing you can control is your position safety! Protect yourself within your fortress. You can peek out but don’t expose yourself too much! Therefore, extremely strict position management is the lifeblood of contracts!

For example, if EOS is currently priced at $3, I can push the liquidation price down to $1.5! This way, no matter how crazy the market gets, I can survive. This is called 'As long as the green mountains remain, I need not worry about firewood.' In the crypto space, insist on 'half-positionism' or even 'dynamic half-position.' The only secret to playing contracts? It’s position management! Buffett leaves a lot of cash; shouldn’t we learn from that?

Furthermore, rolling over positions: Wealth often comes from risk, but it can also lead to the coffin. The Federal Reserve lowers interest rates, and a batch of new people is lured in. The crypto circle is not a charitable organization; it's a jungle! Everyone can play, but only a few can make money. Want to get rich quickly through contracts? Wake up! What’s needed is long-term research, accumulation, and learning. The 'rolling position' theory is feasible but not easy, and it's definitely not about frequent trading!

It requires you to take action with appropriate positions when big opportunities arise, rather than engaging in small trades every day. Grabbing a few big opportunities in a lifetime could turn zero into tens of millions. But it requires extremely high vision and decisiveness! Don't just focus on profit numbers, think about how to achieve them! Investing time to study the market is more practical than dreaming. The essence of trading is to identify and seize opportunities, not to get entangled in position sizes. Use small amounts of money for practice in daily trading; when the real big opportunity comes, be mentally all in, but position management doesn't mean going all in. When you grow from a small capital to a million, you will naturally understand the logic of making big money. With a stable mindset, the next step is to replicate success. Want to learn how to roll over positions/move from small money to millions?

Look down: The timing for rolling positions is critical: Rolling positions are not something you can play casually! You need the right timing: Breakthrough after a long period of consolidation: The market lies dormant for a long time, at a new low volatility, and then chooses a direction to break out. Bull market sudden drop for bottom fishing: In a bull market, prices are rising well, but suddenly there’s a sharp drop; you can consider rolling positions to bottom fish, but you also need to assess the actual situation. Weekly level breakthrough: The price breaks through key resistance/support levels on the weekly chart, the defense line is broken. Major events/emotional extremes: When market sentiment explodes or there’s major news. Only in these scenarios is the chance of rolling positions higher! At other times? Be honest! Or give up! Even if conditions are met, you must set stop losses! Don't just think about making money; first, think about where to bury yourself if you die.

Technical analysis—only strike when you are sure: If you decide to roll, first look at the trend! Use moving averages, MACD, RSI, and cross-verify directions with several indicators. Look for key support and resistance levels, check the authenticity of breakouts, and use divergences to catch reversal signals:

Top divergence: Price is at a new high, but MACD hasn't followed? It may decline, consider reducing positions or shorting.

Bottom divergence: Price is at a new low, but MACD hasn’t reached a new low? It may rise, consider adding positions or going long.

Position management (lifeline):

Core three steps: Opening move, scaling up method, exit strategy. Example (assuming capital of 1 million):

Opening move (initial position): Don’t exceed 10% of total capital! For example, with 100,000.

Scaling up method: Add after breaking through key levels! Each time you scale up, don’t exceed 50% of the initial position (for example, 50,000).

Exit strategy (take profits): When you reach the target price, exit in batches! You should leave when it’s time! Each reduction should not exceed 30% of your current holdings.

In simple terms: When a big opportunity arises, you can afford to be bold; if the opportunity is ordinary, be cautious. Earning is life, losing you must accept. But remember: When you make money, withdraw your initial capital first! Use profits to roll! You can afford not to make a profit, but you cannot afford to lose your principal!

Adjusting positions (let’s roll!): Manage your positions well before you 'roll': Wait for the timing: Only take action when one of the above four situations is met. Strike (open position): Enter based on technical signals. Add (scale up): If the direction is correct, gradually scale up. Withdraw (reduce positions): When you reach expected profits or feel something is off, exit in batches. Run (close positions): When you reach the target price or the market shows clear signs of change, liquidate!

My insights on rolling positions: Only scale up when making money: When in profit, costs are reduced, and risks are smaller, add at key breakout points or pullback levels in the trend. Don’t mindlessly add just because you made a profit! Base position + trading: Split money into two parts. One part is held (base position), and one part is traded during fluctuations (trading), to reduce costs. Division methods: Half position rolling: Half held, half traded. Three-part base: Three parts held, seven parts traded. Seven-part base: Seven parts held, three parts traded. (Safer) The goal is to hold onto chips while using fluctuations to lower costs and optimize positions.

Risk management (lifeline): Just two things: lock total positions + diversify investments. Ensure total risk does not exceed your capacity; don’t put all your eggs in one basket! Keep a close eye on the market and technical indicators; if something feels off, run! Or reduce positions! Is rolling positions risky? The key is how to use leverage! If used well, risks can be controlled.

Example: With a principal of $10,000 and a coin priced at $1,000. Using 10x leverage but only putting 10% of the total funds ($1,000) as margin! This is equivalent to actually using 1x leverage. Set a 2% stop loss; you only lose 2% of this $1,000 margin ($20). Even if the worst-case scenario leads to liquidation (requiring extreme market conditions), you only lose this $1,000 margin, not your entire fortune! Those who get wiped out have either set leverage too high or taken on positions too heavy, and a slight shake in the market spells disaster. Using this method, if the market turns against you, your losses are limited. So, whether you use 20x or 30x, 3x or 0.5x, the core is whether you can manage leverage and position sizes! This is the 'blood on the knife’s edge' method of rolling positions. Brothers interested should ponder more. This is just one perspective; don’t feel compelled to agree.

How to turn small money into big money? Compound interest! Compound interest! It's all about compound interest! A coin, doubling every day, how much is it after a month? The number will scare you! This is the magic of compound interest. Start with small capital, aiming for doubling! Don’t always think about making a little pocket money; aim for multiples in single trades! What we want is exponential growth! In terms of position management: First, diversify! Divide the money into 3-4 parts, and only use one part to bet each time. For example, if you have 40,000 in capital, divide it into 4 parts, using only 10,000 for each trade. Leverage: Do not exceed 10x for mainstream coins and 4x for altcoins. Dynamic adjustments: Lost? Bring in an equivalent amount from outside to maintain your principal. Made a profit? Withdraw some profits. No matter what, don’t let yourself be in a losing state! Once your capital grows, gradually increase the amount of each trade, and increase slowly! Be patient and wait for big opportunities; focus on the doubling goal, and small funds can also roll up. (Regarding liquidation: Back then, I still had spot to support me. Don't you believe that the spot in your hands hasn't made any profit? My futures position only accounts for 2% of total funds; no matter how much I lose, it won't be wiped out, and the limit is controllable.) I hope all brothers can make their snowballs grow bigger and bigger!

Essential knowledge points for crypto contracts:

Leverage trading: Borrow money to trade coins, if you win, you earn more, if you lose, you lose everything + possibly owe more. Example: $5,000 capital, 5x leverage borrowing $20,000, total playing $25,000. If it rises by 20%, you earn $5,000, doubling your capital. If it drops by 20%? $25,000 becomes $20,000, and after paying back the borrowed $20,000, you are left with nothing!

Isolated margin: A separate portion of money is allocated as margin for each trade (e.g., total capital 100,000, using 20,000 to trade ETH). If this trade blows up, you only lose this 20,000, and the other 80,000 is safe. Benefits: You know how much you’ve lost, and the risk is controllable. Drawbacks: You need to keep an eye on it; if it's about to blow up, you must manually add money to save it, which is cumbersome when managing multiple positions.

Full margin: All the money in the account is the common margin for all trades. If one trade loses, you can use the earnings from others to make up for it, reducing the risk of individual liquidation. Benefits: No need to constantly add margin manually, makes managing multiple trades easier, suitable for hedging (going long and short simultaneously). Drawbacks: If all trades lose? Your entire account may get wiped out! Weak control over individual trades makes it easy to unintentionally take heavy positions, and risk exposure may not be clear.

Mixed strategy: For example, if you are optimistic about ETH rising (but fear instability), use 30% of total funds to long ETH (losing would only be this 30%). The remaining 70% uses full margin, simultaneously shorting BTC + going long another competing coin Z (hedging, hoping one profit can cover the other’s loss). This requires more delicate management.

Leverage is a magnifying glass, able to magnify returns, but can also magnify risks. Whether to use isolated or full margin depends on your strategy, endurance, and whether you have time to watch the market. The crypto circle’s volatility is like bungee jumping; understanding these is the foundation of survival. Before taking action, study thoroughly! It’s best to ask someone who truly knows the field.