Why do contracts always lead to liquidation? It's not bad luck; you simply don't understand the essence of trading! This article, condensing ten years of trading experience, presents low-risk principles that will completely overturn your understanding of contract trading — liquidation has never been the market's fault, but rather a time bomb that you buried yourself.

Three Major Truths That Challenge Your Understanding

Leverage ≠ Risk: Position is the Lifeline

With 100x leverage using 1% position, the actual risk is only equivalent to holding a full position in spot trading at 1%. A student operated ETH with 20x leverage, investing only 2% of the principal each time, and has a three-year record without liquidation. Core formula: Real risk = Leverage multiple × Position ratio.

Stop-loss ≠ loss: The ultimate insurance for the account

During the 312 crash in 2024, 78% of liquidated accounts shared a common characteristic: losses exceeding 5% without setting stop-losses. Professional trader rule: single losses should not exceed 2% of capital, equivalent to setting an 'electrical fuse' for the account.

Rolling positions ≠ all-in: The correct way to compound returns

Ladder position building model: Initial position 10% for trial and error, increase position by 10% of profits. Initial position of 5000 yuan (10x leverage) with 50,000 capital, increase position by 500 yuan for every 10% profit. When BTC rises from 75000 to 82500, the total position only increases by 10%, but the safety margin increases by 30%.

Institution-level risk control model

Dynamic position formula

Total position ≤ (Capital × 2%) / (Stop-loss margin × Leverage multiple)

Example: 50,000 capital, 2% stop-loss, 10x leverage, maximum position = 50000×0.02/(0.02×10)=5000 yuan

Three-level profit-taking method

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

In the 2024 halving market, this strategy increased 50,000 capital to one million during two trends, with a return rate exceeding 1900%

Hedging insurance mechanism

Use 1% of capital to buy Put options while holding positions, which can hedge 80% of extreme risks. During the black swan event in April 2024, this strategy successfully saved 23% of account net value.

Deadly trap data evidence

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

High-frequency trading: 500 operations per month with a loss of 24% of capital

Profit greed: 83% of the account profits are given back without timely profit-taking.

Four, mathematical expression of the essence of trading

Expected profit = (Winning rate × Average profit) - (Losing rate × Average loss)

When setting a 2% stop-loss and 20% profit-taking, only a 34% win rate is needed to achieve positive returns. Professional traders achieve an annualized return 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

Profit-loss ratio ≥ 3:1

70% of the time waiting in cash

The essence of the market is a probability game. Smart traders use 2% risk to bet on trend dividends. Remember: control losses, and profits will naturally follow. Establish a mechanical trading system, allowing discipline to replace emotional decision-making, which is the ultimate answer for sustained profits.