In my ten years in the crypto world, the most painful memory was that 800,000 loss—staring at the screen while holding a position for 4 hours.
Watching my account slide from floating profits to liquidation, with only a four-digit balance left, I almost left this market for good.
Now my account is stable in the tens of millions, and I understand better than anyone:
The ability to crawl out of the mire relies not on luck, but on this strategy system soaked in blood and tears, validated by data.
Every piece of advice hides lessons learned from losses, helping you avoid the pitfalls I've encountered.
1. Three major truths that overturn perceptions: Survival logic understood only after losing 800,000.
1. Leverage ≠ Risk: Position is the line between life and death.
When I first entered the crypto world, I feared leverage like a tiger, thinking that 10x leverage was gambling. It wasn't until after a margin call that I realized: the risk lies not in the leverage ratio, but in position control. With 100x leverage using 1% of the position, the actual risk is only equivalent to 1% of a full spot position.
I had a student who traded ETH with 20x leverage, investing only 2% of the principal each time, and over three years, he never faced liquidation, achieving an annualized return three times higher than spot trading. The core formula is simply: Real risk = Leverage ratio × Position ratio. If I had understood this back then, my loss of 800,000 could have been cut by at least half.
2. Stop-loss ≠ Loss: The ultimate insurance for your account.
In the '312' crash of 2024, back-end data gave me chills: 78% of accounts were liquidated due to losses exceeding 5% without setting stop-losses. My loss of 800,000 also stemmed from the fantasy of 'it will always rebound,' dragging my floating loss from 3% to 20%, ultimately leading to forced liquidation.
Now I have equipped my account with a 'fuse': a single loss will never exceed 2% of the principal, like an automatic power cut in case of overload. In the black swan event of April 2024, this tactic saved 3 million of my principal.
3. Rolling positions ≠ Gambling: The correct way to open up compound interest.
In the early years, I always wanted to 'make back everything at once,' adding to positions whenever I made a profit, resulting in profits that came and went quickly. Later, I discovered the laddering position strategy: start with 10% to experiment, and only use 10% of the profit to add to the position.
With a principal of 50,000, the initial position is 5,000 (10x leverage), and for every 10% profit, use 500 to add to the position. In 2024, when BTC rose from 75,000 to 82,500, the total position only expanded by 10%, but the safety margin increased by 30%, earning more than a full position.
2. Institutional-level risk control model: From 'passive liquidation' to 'active control'.
1. Dynamic position formula: Calculate clearly before placing an order.
Before opening a position, always calculate: Total position ≤ (Principal × 2%) / (Stop-loss range × Leverage). For example, with a principal of 50,000, a 2% stop-loss, and 10x leverage, the maximum position is 5,000.
In the 2024 halving market, I used this formula to accurately control the rhythm, growing 50,000 into a million across two trends, with a return rate exceeding 1900%.
2. Three-stage profit-taking method: Let profits be secured.
Profit of 20%: Close 1/3 to secure real money;
Profit of 50%: Sell 1/3 to lower the holding cost;
Remaining position: Exit if the 5-day line is broken.
Last year, with one cryptocurrency, I used this tactic to preserve 80% of my profit before the pullback, while friends who held onto it saw their profits dwindle to nothing.
3. Hedging insurance mechanism: Give positions a 'bulletproof vest.'
When holding a position, use 1% of the principal to buy Put options, which has been tested to hedge 80% of extreme risks. In April 2024, during the black swan event, the market dropped 30%, and my account only lost 5%, all thanks to this tactic. Remember: black swan events in the crypto world are inevitable; don't go out without wearing a 'bulletproof vest'.
3. Fatal trap data evidence: The pitfall guide gained from an 800,000 loss.
1. Holding a position for 4 hours: The probability of liquidation skyrockets to 92%.
Looking back at the loss of 800,000, I lost control within the first 30 minutes of holding the position. Data does not lie: after holding a position for more than 4 hours after a loss, the probability of liquidation increased from 15% to 92%.
Now, if a loss exceeds 2%, I immediately cut the position—opportunities are always there, but once the principal is gone, it’s truly gone.
2. High-frequency trading: Monthly average of 500 operations costs 24% of the principal.
When I first started, I traded over 20 times a day, thinking 'more operations mean more profits.' Later I discovered that with an average of over 500 operations a month, fees and slippage would consume 24% of the principal.
Now I conduct no more than 20 trades a year and instead earn more steadily.
3. Profit greed: 83% of accounts that did not take profits gave back their gains.
I have seen too many people go from floating profits of a million to losses, all because they 'waited for a higher point.' Data shows: failing to take profits in a timely manner after making a profit results in 83% of accounts giving back all their profits within a month.
My principle: once I reach my expected outcome, I exit in batches; it doesn't matter how much I earn; what matters is that it's in my pocket.
4. The mathematical expression of the essence of trading: Using probability to defeat the market.
The formula for expected profit should clearly explain the truth: (Win rate × Average profit) - (Loss rate × Average loss). When I set a 2% stop-loss and a 20% take profit, even with a win rate of only 34%, I can still make money in the long run.
In recent years, I have relied on strict stop-losses (average loss of 1.5%) and capturing trends (average profit of 15%) to keep my annualized return stable above 400%.
The ultimate rules boil down to four:
Single loss ≤ 2% (to stay alive);
Annual trades ≤ 20 (to make fewer mistakes);
Profit-loss ratio ≥ 3:1 (earn more);
70% of the time is spent waiting with no positions (waiting for opportunities).
The essence of the market is a probability game; smart traders never bet their entire fortune but rather risk 2% to seize trend profits.
Just like my comeback from an 800,000 loss to a fortune in the millions, it was not about predicting the market but controlling losses— as long as I survive, profits will naturally follow.
But always remember: the risks in the crypto world far exceed your imagination. Use spare money to play; don't bet your life on it. Follow @趋势猎手老金 for more detailed strategies to help you make money steadily.
