Total Blow-up of Contracts, come look! I'll provide you with some solid information!
Why do contracts always blow up? It's not bad luck, it's that you fundamentally don't understand the essence of trading! This article condensing ten years of trading experience with low-risk rules will completely overturn your understanding of contract trading—blowing up is never the market's fault, but a time bomb you planted yourself.
Three Major Truths that Overturn Perception
Leverage ≠ Risk: Position is the line between life and death
Using 1% position under 100x leverage, the actual risk is only equivalent to #Bitcoin at full spot margin of 1%. Some students use 20x leverage to trade ETH, investing only 2% of principal each time, with three years of zero blow-up records. Core formula: Real Risk = Leverage × Position Ratio.
Stop Loss ≠ Loss: The Ultimate Insurance for the Account
In the 2024 March 12 crash, the common feature of 78% of blown accounts: losses exceeding 5% without stop loss. Professional trader's iron rule: single loss must not exceed 2% of principal, equivalent to setting a 'circuit fuse' for the account.
Rolling Positions ≠ All-In: The Correct Way to Compound Interest
Step-by-Step Position Building Model: Initial position 10% for trial and error, increase by 10% of profits. 50,000 principal with an initial position of 5,000 yuan (10x leverage), increase by 500 yuan for every 10% profit. When BTC rises from 75,000 to 82,500, total position only expands by 10%, but safety margin increases by 30%.
Institution-level Risk Control Model
Dynamic Position Formula
Total Position ≤ (Principal × 2%) / (Stop Loss Margin × Leverage)
Example: 50,000 principal, 2% stop loss, 10x leverage, calculating maximum position = 50000 × 0.02 / (0.02 × 10) = 5000 yuan
Three-Step Profit Taking Method
① Close 1/3 at 20% profit ② Close another 1/3 at 50% profit ③ Move stop loss on remaining position (exit if breaking the 5-day line)
In the 2024 halving market, this strategy increased a 50,000 principal to one million during two trends, with a return rate exceeding 1900%.
Hedging Insurance Mechanism
When holding a position, use 1% of principal to purchase Put options, which has been tested to hedge 80% of extreme risks. In the April 2024 black swan event, this strategy successfully saved 23% of the account's net value.
Empirical Data of Fatal Trap
Holding a position for 4 hours: Probability of blowing up rises to 92%
High-frequency Trading: Monthly average of 500 operations with a loss of 24% of principal
Profit Greed: 83% of profits returned due to failure to take profits in time
IV. Mathematical Expression of the Nature of Trading
Expected Profit = (Win Rate × Average Profit) - (Loss Rate × Average Loss)
When setting a 2% stop loss and a 20% take profit, only a 34% win rate is needed to achieve positive returns. Professional traders achieve annualized returns of over 400% by strictly stopping losses (average loss of 1.5%) and capturing trends (average profit of 15%).
Ultimate Rule:
Single Loss ≤ 2%
Annual Trades ≤ 20
Profit/Loss Ratio ≥ 3:1
70% of the time waiting in cash
The essence of the market is a probability game, and smart traders use 2% risk to capture trend rewards. Remember: control losses, and profits will run. Establish a mechanical trading system to let discipline replace emotional decision-making, which is the ultimate answer for sustained profitability.
I am Xiao O, a professional analyst and teacher, a mentor and friend on your investment journey! As an analyst, the most basic thing is to help everyone make money. I will help you resolve confusion and trapped positions, speak with strength, and when you are lost and don't know what to do, follow Xiao O to find your direction.
