I am 32 years old and now live in Guangzhou. Two houses, a Maserati, and a GLS — all of this was earned in 8 years of real practice in the crypto world. I started with 300,000, which dropped to 60,000 at the lowest point, and I managed to grow it to tens of millions using the most 'foolish' methods. In the most intense period, I turned my base capital into 400 times the profit in 4 months, directly pocketing 20 million.
Sounds like a joke? But behind this is 2880 days of practical blood and tears. In the contract market, you can leverage small amounts for large gains, and it can lead to rapid liquidation — 90% of losses are not due to poor skills, but because of falling into the 'human nature trap' and 'rule loopholes.' The following 8 iron rules, each carrying the bloody lessons of myself and those around me, if you understand them, you can avoid most liquidation pitfalls.
I. 8 iron rules for surviving in contracts: Avoid 90% of fatal pitfalls.
1. Don't rush to rebound after a stop loss! Stop trading after consecutive stop losses.
When I first started trading contracts, the most common mistake I made was 'immediately trying to recover after a stop loss.' Once, I shorted Bitcoin and lost 800U in two consecutive stop losses. I thought 'the third time will definitely work' and leveraged heavily, resulting in a total loss of my capital.
I later found out: 78% of liquidation cases occur during impulsive trading after consecutive stop losses. Now I have established a 'double stop-loss circuit breaker': If I have two consecutive stop losses, I immediately close the software and review — was it a wrong trend view? Or was the stop-loss level set incorrectly? If I can't find the problem, I'll stay out for a day.
Remember: The market is never short of opportunities. If you lose your capital, no opportunity will matter to you. Stop-loss is about controlling risk, not 'failure.' Rushing to rebound will only lead to more losses.
2. Never exceed 10% of your capital in a position! Don't believe the nonsense of 'getting rich overnight.'
Statistics from a certain contract platform sent chills down my spine: 92% of users who make a full position trade will see their assets go to zero within 3 months. Beginners often treat contracts as 'ATMs,' thinking 'going all in will make them rich,' but leverage is a double-edged sword — under 10x leverage, a 5% fluctuation can lead to liquidation.
The worst case I've seen: A brother took 50,000 U and fully invested in altcoins. When it rose by 5%, he was overly excited, and when it dropped by 5%, he panicked and held on, resulting in liquidation in half an hour, leaving him with less than 1,000 U.
Now I'm stubborn about position sizes: each trade should not exceed 5%-10% of my capital. With 50,000 U, I would only open a position of up to 5,000 U. Even if I miss 10 market opportunities, as long as I can avoid one liquidation, I win over most people. Contracts are a marathon, not a sprint; only steady and small flows can help you survive.
3. Trading against the trend = going against your money! Never hard fight a one-sided trend.
Last week, Bitcoin dropped 15% on the 4-hour chart. Someone in the community shouted 'it's bottomed out' and fully invested in a long position, resulting in 3 liquidations within 3 hours, crying that 'the market is unreasonable.' But is the market really unreasonable?
There is a golden rule for judging one-sided trends: Look at the 1-hour candlestick chart. If there are 5 consecutive bullish (or bearish) candlesticks, and the moving averages are diverging (the short-term moving average is significantly apart from the long-term moving average), this is a strong trend signal. At this time, don't think about 'buying the dip' or 'shorting on the rebound,' following the trend or staying out is the right way.
Last year, Ethereum rose from $1,800 to $4,000. Following the 'do not go against the trend' principle, I only went long and did not short, and even though there were pullbacks in between, I did not make random trades, steadily earning 3 times my investment.
4. Don't open a position with a risk-reward ratio of less than 2:1! Don't be a fool who 'earns small and loses big.'
The pitfall of countless retail investors: They quickly take profits after earning 1,000 U but can only bear to cut losses after losing 2,000 U. Over time, they end up 'earning not enough to cover the losses.'
The scientific trading logic is: before opening a position, you must set at least a 2:1 risk-reward ratio — for example, if the stop-loss is set at 500 U, the take-profit must be set at least at 1,000 U. If this standard isn't met, don't touch it.
Last year when trading SOL contracts, I initially wanted to go long at $100, calculating a stop-loss at $95 (losing 500 U) and a take-profit at $105 (earning 500 U), which gave a risk-reward ratio of 1:1. I decisively gave up. Later, when it pulled back to $90, I set a stop-loss at $85 (losing 500 U) and a take-profit at $100 (earning 1,500 U), entering only when the risk-reward ratio was 3:1, and steadily made 1,500 U.
Remember: Trading is not about 'making the right call often,' but rather 'earning more when right and losing less when wrong.'
5. Frequent trading = working for the exchange! Experts wait for the right timing.
Data from a leading exchange is heart-wrenching: Ordinary users trade an average of 6.3 times a day, while the top 10% of profitable traders only trade 2.8 times a week.
When I first started trading contracts, I also loved to 'establish my presence,' opening 10 trades in a day, paying a lot in fees, but my capital kept shrinking. I later understood that 90% of fluctuations are 'ineffective noise'; experts wait for 'high certainty opportunities' — for instance, trend breakouts and key support/resistance levels resonating.
Now I only watch the market 2 times a day (half an hour after opening, half an hour before closing), and do whatever I need to do during other times. Last year, Bitcoin was sideways for 10 days, and I didn't make any trades, watching others lose money in the sideways market. I entered after the breakout, and made more profit from one trade than others did from ten.
6. You can't earn money outside of your understanding! Only trade the cryptocurrencies you know well.
When Dogecoin surged 300% due to a tweet from Musk, someone in the group followed suit and chased it high, only to be liquidated when it crashed. Their loss wasn't due to luck but ignorance — they didn't even understand Dogecoin's market value or chip distribution, so why would they think they could make money?
I now only trade 3 cryptocurrencies: Bitcoin, Ethereum, and SOL. I have thoroughly researched their volatility patterns, major player habits, and key price levels. I won't touch unfamiliar coins, no matter how much they rise, because money made through luck in the short term will eventually be lost through skill. Staying within my circle of competence helps me avoid the deadly trap of 'trading based on feelings.'
7. Holding positions is walking into the abyss! If you're wrong, admit it; only by staying alive do you have a chance.
The most brutal truth about leverage markets: Holding positions = betting your capital on luck. Under 10x leverage, price fluctuations are amplified 10 times, and a floating loss of 5% during a hold can lead to liquidation. Statistics from a certain contract community show that users who hold positions 3 times in a row have a liquidation probability as high as 91%.
I've seen the most stubborn brother: He went long on Ethereum and set a stop-loss at $3,000. When it fell to $2,900, he thought 'it will rebound,' removed his stop-loss, and held on, resulting in a liquidation at $2,500, losing 200,000 U.
Now I always set a stop-loss when I open a position. When the time comes, I cut it off, never 'wait a bit longer.' If I'm wrong, I admit it; a stop-loss of 5% is always better than a liquidation loss of 100% — as long as I'm alive, I can earn it back in the next trade.
8. Don't get carried away after making a profit! Withdraw half your capital, and treat the rest as 'game currency.'
Human weaknesses are most easily exposed when making profits: After making money, they make random trades or leverage, resulting in profit erosion and even losses. I have suffered this loss before: I once made 50,000 U, felt like 'I am a god,' and fully invested in an altcoin contract, losing all my profits in 3 days, and even losing 20,000 in capital.
Now I have a strict rule: after every profit, I immediately withdraw 50% of my capital. For example, if I earn 10,000 U, I first transfer 5,000 U to my bank card, and the remaining 5,000 U is treated as 'game currency,' and I won't feel bad even if I lose it. This way I can lock in profits and maintain clarity — trading with 'profits' keeps my mindset stable.
II. 15 core principles for stable profits (condensed version)
A market crash is a true test: When the market drops sharply, if your assets drop less, it indicates that the market maker is protecting the price, so you can hold on with confidence.
A simple tip for beginners: For short-term trades, look at the 5-day line (sell if it breaks); for medium-term trades, look at the 20-day line (sell if it breaks); sticking to this will help you outperform most people.
Cleverly entering the main upward wave: If the main upward wave does not have obvious volume, buy decisively; if the volume drops and breaks the trend, reduce your position.
Be decisive with short-term stop losses: If there is no volatility for 3 days and you lose 5%, stop-loss unconditionally, don't stubbornly hold on.
Signal for a rebound after a sharp decline: If it drops more than 50% from a high position and has fallen for 8 consecutive days, it enters an oversold channel, consider buying.
Trade the leaders: Leaders rise sharply and fall slowly; don't be afraid to chase highs (buy at short-term peaks, sell at even higher peaks).
Follow the trend and don't be greedy: Don't touch garbage coins; the trend is more important than the price.
Review to find methods: If you made money, don't get carried away; review whether it was luck or skill, and finding a stable system is key.
Staying out is also a skill: If you are not confident, don't open a position. Only those who can stay out are the real experts; first protect your capital before making money.
Use a fixed system for steady operations: Use a fixed trading system to respond to changes, as random operations are the easiest to get wrong.
III. Turning over small capital: Rolling over is not gambling; it's a skill of dancing on the edge of a knife.
In the crypto world, trying to turn over small capital by rolling positions is indeed a harsh path, but this path is paved with blood and tears. Last year's crash saw Liangxi turn 10,000 into 10 million by shorting, but no one tells you he had been liquidated over thirty times; earlier, the expert Tony turned 50,000 into 20 million in a year, relying on the 'three iron rules of rolling positions.'
I've seen a mining farm owner test rolling positions: He broke $300 into 30 parts, investing only $10 each time with 100x leverage. If the direction was correct, a 1% fluctuation would double his money. He would immediately withdraw $10 in profit after earning $20, and continue rolling the remaining $10. In this way, he rolled it up to $20,000 in two months — the key was that when he made $50,000, he decisively switched to spot trading, and later when that coin went to zero, he was the only one who preserved his profits.
The three biggest fears of rolling positions are:
Getting anxious and making random trades: Tony only tries 3 directions each day; if he is wrong 3 times, he turns off his device. If Bitcoin is sideways for 7 days, he will stay out and watch for 7 days.
Greed leads to losses: Last year's crash on March 12, a brother rolled from 5,000 to 800,000 without taking profits, wanting to reach a million, only to be liquidated in the middle of the night. In the morning, he posted a screenshot of his registration as a delivery person.
Stubbornly holding onto a wrong position: Liangxi succeeded because he quickly recognized his mistakes, going long and being liquidated 20 times. On the 21st time, he switched to short and instantly turned the tables, saying 'being liquidated 20 times proves that the bulls are dead.'
Lastly, I want to say...
Contracts are not gambling; they are a 'probability game with controllable risks.' The core of these 8 iron rules and 15 principles is one: use rules to manage human weaknesses.
Minimizing losses is earning; staying alive is the key to waiting for real opportunities. May you walk steadily and earn long in the crypto world with these experiences.
