$BTC Why do contracts always get liquidated? It's not bad luck; you simply don't understand the essence of trading! This article condenses ten years of trading experience into low-risk rules that will completely overturn your understanding of contract trading - liquidations are never the market's fault but a time bomb you planted yourself.

Three truths that overturn cognition

Leverage ≠ risk: position is the life-and-death line

Using 1% position under 100x leverage, the actual risk is only equivalent to 1% of a full spot position. A student used 20x leverage to trade ETH, investing only 2% of principal each time, with three years of no liquidation. Core formula: real risk = leverage multiplier × position ratio.

Stop loss ≠ loss: the ultimate insurance for the account

In the 2024 312 crash, 78% of liquidated accounts shared a common feature: losses exceeded 5% without setting stop losses. Professional trader's rule: a single loss should not exceed 2% of the principal, equivalent to setting a 'circuit fuse' for the account.

Rolling positions ≠ all-in: the correct way to compound interest

Ladder position building model: the first position is 10% for trial and error, using 10% of profits to add positions. With a principal of 50,000, the first position is 5,000 (10x leverage), and for every 10% profit, 500 is added. When BTC rises from 75,000 to 82,500, the total position only expands by 10%, but the safety margin increases by 30%.

Institutional-level risk control model

Dynamic position formula

Total position ≤ (principal × 2%) / (stop loss range × leverage multiplier)

Example: 50,000 principal, 2% stop loss, 10x leverage, the maximum position is calculated as 50,000 × 0.02 / (0.02 × 10) = 5,000.

Three-stage profit-taking method

① Close 1/3 at 20% profit ② Close another 1/3 at 50% profit ③ Move stop loss for the remaining position (exit if breaking the 5-day line)

During the 2024 halving market, this strategy increased 50,000 principal to a million through two trends, with a return rate exceeding 1900%.

Hedging insurance mechanism

Using 1% of principal to buy Put options while holding positions can hedge against 80% of extreme risks. This strategy successfully saved 23% of the account's net value during the April 2024 black swan event.

Deadly trap data evidence

Holding a position for 4 hours increases the probability of liquidation to 92%

High-frequency trading: an average of 500 operations per month consumes 24% of principal

Profit greed: failure to timely take profits led to an 83% drawdown of the account

Four, the mathematical expression of the essence of trading

Expected profit = (win rate × average profit) - (loss rate × average loss)

When setting a 2% stop loss and a 20% profit target, only a 34% win rate is needed to achieve positive returns. Professional traders achieve annualized returns of over 400% through strict stop losses (average loss of 1.5%) and trend capturing (average profit of 15%).

Ultimate rule:

Single loss ≤ 2%

Annual trades ≤ 20 times

Profit-loss ratio ≥ 3:1

70% of the time in cash waiting

The essence of the market is a probability game, and smart traders use a 2% risk to capture trend dividends. Remember: control losses, and profits will run. Establish a mechanical trading system to replace emotional decisions with discipline, which is the ultimate answer for sustained profitability.