The truth learned only after being liquidated: Contract traders who do not set stop losses are destined to become cash cows for the market makers!
Why do 90% of contract traders end up losing everything? Because they don't know how to set stop losses!
Just today, a friend in crypto opened a position without a stop loss and got liquidated, so I’ll take this opportunity to give everyone a lesson.
I have seen too many people grow their account from 100,000 to 1,000,000, only to lose everything due to one bad hold.
Today, I will share all the stop loss secrets that I learned from multiple liquidations!
In March 2023, BTC surged from 26,000 to 32,000, and I shorted with 5x leverage, thinking: "I’ll close it if it pulls back". As a result, it went all the way up to 35,000, and I got liquidated!
In January 2024, SOL broke through 120, and I chased it with 10x leverage, thinking, "I’ll exit if it breaks the previous high". It then spiked to 90 and went to zero!
Bloody lessons:
Holding once might keep you alive, but holding ten times will definitely lead to death.
All liquidations start with "just a little longer".
1. Stop Loss Techniques (Life-Saving Version)
1. 3-Second Stop Loss Rule (A must-learn for beginners)
You must set a stop loss within 4 seconds of opening a position.
Stop loss range: The inverse of the leverage ratio (20x leverage 👉 5% stop loss)
Example: Open 10,000 USDT with 20x leverage, set stop loss at 500 USDT, 5%
2. Dynamic Stop Loss Technique (Essential for Advancement)
Profitable by 5% — Move stop loss to breakeven.
Profitable by 10% — Move stop loss to a profit of 5%.
Profitable by 20% — Move stop loss to a profit of 15%.
(Like saving your game in a video game, the profitable portion must never be given back.)
3. Emotional Stop Loss Method (Psychological Control)
Three consecutive losses — Close the software and go work out for 1 hour.
Feeling euphoric after profits — Immediately withdraw 50%.
(Decisions made when euphoric are 99% wrong.)
2. Practical Case: How to Use Stop Loss to Capture Entire Market Movements
May 2024 ETH operation:
Open long at 3600, 20x leverage, initial stop loss at 3520 (2.2%).
Price rises to 3700, move stop loss to 3720 (locking in 3% profit).
Ultimately, it surged to 4100, capturing the entire price increase while only assuming a 2% risk.
3. Stop Loss is a Warning
Stop loss is not admitting defeat; it is a tactical retreat.
All big players have been liquidated; the difference is that they set their stop losses quickly.
The crypto market will always have opportunities; what is lacking is your capital to survive until the next opportunity! The reason you can sit at the table is that your capital is still there; without capital, you can only observe.
