After staying in the currency circle for a long time, you will find that: it is difficult to make money, and it is even more difficult to survive. 70% of liquidations are due to extreme market conditions, and 90% of novices fall into contract gamblers.
Mentality, more than 2,000 scam projects each year make investors lose their money.
Today, I will analyze the 3 most fatal risks in the currency circle, from cases to response strategies. Each one contains the core logic of "living".
- Understand these, and you can avoid 90% of the loss traps.
1. Market Volatility Risk: Extreme market conditions are "harvesters", and position control and stop loss are "bodyguards".
The 24-hour continuous trading mechanism of cryptocurrency makes volatility the norm - daily gains and losses of more than 20% are common, 2024
In March, Bitcoin even plummeted by 35% in a single day, and countless leveraged accounts were instantly cleared. This "no limit on price increases and decreases" characteristic makes "waves
Dynamic risk" has become the number one killer in the currency circle, and more than 70% of liquidations are due to this.
The essence of risk: unlimited volatility, leverage is an amplifier
The zeroing disaster of the LUNA coin* in 2022 is still frightening: it fell from $119 to $0.0001 in just 7 days. Countless people added
Investors with 10x and 20x leverage were liquidated in the fantasy of "bottom-fishing" and "carrying orders", and some even owed money to the exchange. This is it
Is the terrible thing about volatility risk: you never know how deep the market will fall, and leverage will amplify this risk by 10 times or 100 times.
Practical response: 3 tricks to lock in volatility risk
1. "Double upper limit" for position + leverage to insure the account.
The position of a single transaction must not exceed 10% of the principal: even if you think "100% will rise", don't go all in - 100,000U principal,
Invest up to 10,000U per coin, and lose up to 10,000U in extreme market conditions without hurting the foundation;
The leverage ratio is firmly nailed within 5 times: a leverage of more than 10 times is "betting on life", 5 times leverage + 10% position, which is equivalent to using
50% of the principal is used to gain profits, even if the market fluctuates by 10%, it will not be liquidated (under 5x leverage, 10% fluctuation corresponds to 50% of the account equity
Change, leaving 50% safety margin).
2. Dynamic stop loss system to make losses "have a ceiling"
Spot stop loss: set a -15% hard stop loss line (for example, if you buy a coin for 100U and it falls to 85U, immediately cut the meat), don't believe that "long-term holding will
Rebound" - LUNA holders lost all their money while "waiting for the rebound";
Contract stop loss: In addition to price stop loss, you must also monitor the funding rate - when the funding rate of a certain currency is continuously > 0.1% for 3 hours (such as
In 2023, the PEPE contract + rate reached 0.5%/8 hours), indicating that the bulls are overheated, reduce the position by 50% in advance to avoid "the longer you hold the position,
The more you lose in handling fees.
3. Volatility hedging, "stable + risky" combination to resist shocks
Divide funds into "stable pool" and "volatile pool": 70% of positions buy mainstream coins such as BTC/ETH (low volatility, resistance to falling
Strong), 30% position is used to deploy high-volatility shanzhai coins (to gain high returns). When Bitcoin plummeted by 35% in 2024, my mainstream coin position
Although the position fell, it was not liquidated, and the loss of the shanzhai coin position was controlled through stop loss. The overall account retracement was only 15%, which was far lower than the market average.
2. Contract Trading Risk: 90% of newbies die from a "gambler's mentality". Discipline is more important than technique.
Contracts were originally tools to hedge risks, but most people regarded them as "shortcuts to get rich". Data shows that 90% of contract novices will have 3 months
Internal liquidation, the core is not poor technology, but falling into the "gambler's mentality trap" - wanting to double the profit, wanting to recover the loss, and finally being countered by leverage.
Backlash.
Risk traps: funding rate arbitrage pits + liquidation black holes
1. The "hidden reaping" of funding rates.
When the funding rate of a certain currency is continuously positive (such as PEPE contract rate of 0.5%/8 hours), it means that the long seller has to pay the short seller every 8 hours
The short seller pays 0.5% of the principal. If you hold the position for 1 week (21 8-hour periods), you will lose 10.5% in handling fees alone, and long-term holding
Must lose. In 2023, many retail investors held long orders for a long time because they were "bullish on PEPE", but as a result, the market did not rise, and the handling fees wiped out the principal.
2. "Liquidation nightmare" in extreme market conditions.
In the "519 crash" in 2021, many exchanges failed to automatically reduce positions due to violent market fluctuations, resulting in "penetration" of user accounts.
Position" - not only the principal is lost, but also the exchange is owed money. A certain investor went long Ethereum with 500,000U, and after being liquidated, the platform demanded 20
10,000U, just because they didn't calculate the "liquidation risk under extreme market conditions". Practical strategy: Use discipline to fight against gambling and return the contract to
"Tool Essence" 1. Anti-leverage ratio rule: Add leverage when profitable, and reduce leverage when losing money.
When profitable: use 3x leverage to roll the position (for example, after earning 10,000U, use the profit to open 3x leverage, without moving the principal) to let the profit run;
When losing money: immediately switch to 1x leverage or close the position, never use "add leverage to recover the capital" - countless people have fallen into "wanting to add leverage to earn back 10,000 when losing 10,000
Return", resulting in a loss of 100,000.
2. Time cycle "curse": Holding period does not exceed 4 hours.
Data shows that if the contract position exceeds 6 hours, the liquidation rate will increase by 3 times. My iron rule is: short-term contracts should not be held for more than 4 hours,
Close the position at the time whether it is profit or loss. This can not only avoid the "overnight market risk", but also prevent the "carrying order mentality" from developing - 2024
That night when Bitcoin plummeted in 2014, I closed my position 3 times in 4 hours. Although I didn't make a lot of money, I protected my principal.
3. Reverse Indicator Hedge: Operate in reverse when the long/short ratio exceeds 3:1.
When the long/short ratio of the exchange contract is > 3:1 (for example, 3 long positions correspond to 1 short position), and the position volume reaches a 30-day high, it means that retail investors are in
"Collective long position", at this time, open a short position in reverse (or reduce the long position), and the historical accuracy rate is 68%. In 2023, the SOL contract long/short ratio reached
At 4:1, I decisively closed the long position and opened a short position, avoiding the subsequent 20% decline.
3. Project fraud and zeroing risk: 2000 + scams every year, 3 verification to screen out "real projects"
The most disgusting thing in the currency circle is not losing money in the market, but losing money in scams. There are more than 2,000 projects running away every year, rug pull + (market pull and smash),
Fake DeFi protocols + emerge in endlessly. In 2023, DeFi fraud losses exceeded $4.2 billion, and countless investors "bought coins and returned to zero".
Scam types: from "pulling up and smashing the market" to "code backdoors"
1. Rug pull (team running away)
The TOMO project in 2024 is a typical example: the team sold 90% of the tokens at a high price after the private placement, falling from $2 to
US$0.1, and the market value evaporated by 95%. The common points of such projects: anonymous team, no actual implementation, marketing to attract
Once retail investors take over, the team immediately smashes the market and runs away.
2. Fake DeFi protocols
Imitation projects are best at "hiding backdoors in the code": the surface is a "pledge mining" agreement, but the contract code hides the "transfer right
Limit", after users pledge tokens, the project party transfers all assets with one click. In 2023, a certain "imitation Aave" protocol was launched for 3 days, taking away
Users pledge $120 million in assets, and the code audit report is actually fake. Screening criteria: 3 verification + position limit to prevent scams
Opportunity 1. Three-step method for project "physical examination" to avoid 99% of scams
Check the contract audit: It must pass the audit of top institutions such as Certik+ and PeckShield+, and focus on Chapter 3 of the report, "Risk Vulnerabilities".
--Never touch the "high-risk vulnerabilities" projects marked in red, no matter how popular the marketing is;
Check the team background: The core members of the project must disclose real-name information, and LinkedIn can check their blockchain work experience (such as former Google engineers
Teacher, former Ethereum core developer), anonymous team "99% is a scam";
Monitor on-chain data: It must be listed on the top 50 exchanges by market value (such as Binance, OKX+), and the 24-hour trading volume > the circulating market value
10% (avoid the "air coin" with a market value of 100 million but a daily trading volume of only 1 million).
2. Shanzhai Coin "Position Iron Law": No more than 5% for a single coin, and reduce positions immediately after a surge.
The holding of a single shanzhai coin must not exceed 5% of the total funds: even if you are optimistic, don't put all your eggs in one basket - 50,000U principal,
Invest up to 2500U per coin, even if it goes to zero, you will only lose 5%;
Sell 70% forcibly after a 5-fold increase: If a shanzhai coin rises from 1U to 5U, immediately sell 70% of the principal (take the money), and the remaining 30%
Profit "accompanying run" can lock in profits and avoid greed for the last wave of gains.
Finally, I want to say: The core of survival in the currency circle is "respecting risks".
From market volatility to contract traps to project scams, risks are everywhere in the currency circle, but the way to deal with them is actually very simple: use position control
Limit the risk, lock the loss with stop-loss discipline, and avoid scams with screening criteria. 90% of the losses are not because of "bad luck", but because
"No rules" - full position, leverage, trusting anonymous projects, these are the root causes of losses.
Remember: The currency circle does not lack opportunities, but lacks the principal and mentality of "living to wait for opportunities". Control positions, strictly abide by stop losses, and carefully select projects. This
These three seemingly simple rules are precisely the "survival code" for crossing the bull and bear markets. I hope you will step on fewer pits and make more money from now on, and walk steadily and live long in the currency circle. Technical is king in the currency circle operation. Follow @钱包守护者 Polish the operation system, from the order placement skills to the trend judgment, and the details hide the opportunities. Use technology as the background.
