Cryptocurrency Practical Risk Control Guide (Core Considerations)

1. Must have defense: Take profit and stop loss are the bottom line

Before each trade, mandatory set take profit and stop loss, for example, set the stop loss at 5%-10% of the position amount, and set the take profit according to the preset target (such as 15%-30%), to avoid missing the exit opportunity due to emotional fluctuations, or incurring significant losses due to market reversals.

2. Absolutely do not hold onto losing positions: Don't 'bet on a rebound' when losing

When the market is against the position direction and triggers the stop loss, exit immediately without the lucky mentality of 'waiting for a pullback to sell'. Holding onto losing positions can turn small losses into liquidation (especially in contract trading); once the direction is wrong, timely stop loss is necessary to preserve the principal.

3. Control position size: Never go all in

In spot trading, the position size for a single trade should not exceed 30% of the total funds, and in contract trading, it should not exceed 10% to avoid too much capital being allocated to a single cryptocurrency or operation. In extreme market conditions, being fully invested can lead to complete loss of principal.

4. Do not chase highs and sell lows: Stay away from 'hype traps'

Do not blindly follow the trend to chase cryptocurrencies that have surged in the short term, nor panic sell those that have plummeted. Surges are often followed by pullbacks, and drops may have rebounds; assess the trend before operating, rather than being swayed by real-time market emotions.

5. Diversified operations: Spread risks and do not 'bet'

Do not invest all funds into a single cryptocurrency; instead, allocate funds according to a ratio of 'mainstream coins (such as BTC, ETH) + potential quality coins', as mainstream coins have strong risk resistance and quality coins have growth potential, reducing the impact of a single cryptocurrency's collapse.

6. Watch the market without greed: Take profit and don't cling to the battle

Exit decisively after reaching the profit target, without pursuing 'selling at the highest point'; during extreme market fluctuations, if no take profit is set, consider manually reducing the position in batches to avoid giving back profits. The cryptocurrency market changes rapidly, and securing profits is the real gain.