Many people ask me: “With the same trading logic, why can small funds earn, but large funds lose?”
The answer is hidden in two sentences: Small money earns quick profits through speculation, while large money relies on preserving value and compounding interest; when the capital scale multiplies by 10 or 100 times, your trading strategy must be completely rewritten – not optimized, but rebuilt from scratch.
1. Threshold effect: The amount of capital determines your 'execution courage'
Don't overestimate your mindset; the scale of capital will directly rewrite your perception of 'loss':
5000U stage (early 2022): I opened a 10x ETH short position with my entire account, and I didn’t even blink when the stop-loss was triggered – because even if I lost everything, it was just half a year's salary for me, and I could always earn it back. At that time, I was doing scalp trading on SOL, and even if I lost 500U in a single trade, I still dared to open a position according to the strategy the next day, executing with full commitment.
During the 500,000 U phase (middle of 2023): the mindset changed completely. During one trade with a 200,000 U BTC position (40% position), when it reached the stop loss point, I hesitated for 8 minutes while watching the market—my brain automatically calculated: 'this 20,000 U stop loss equals half a square meter of my family home, equals my brother's half-year tuition.' Just because of that 8 minutes of hesitation, the price dropped another 3%, costing me 60,000 U.
Later I realized: the larger the capital, the heavier the anchor point of 'unrealized losses.' Your execution becomes easier to distort. The 'decisiveness' of small funds is not skill; it's low cost. The 'hesitation' of large funds is not weakness; it’s the unavoidable reality pressure you must face.
2. Strategy failure: scale is the 'mirror of win rate.'
I once achieved a 75% win rate through '1-minute scalp trading' (grabbing 3-5 point fluctuations), rolling 5000U to 200,000U in half a year; but when the position size increased from 500U to 5000U, the win rate dropped directly to 45%—it wasn’t that the strategy was wrong; it was the 'slippage' that swallowed the profits.
When dealing with small funds: every scalp trade, SOL's slippage is about 1-2 points, with a 500U position, deducting fees and slippage, I can still earn 3-4 points.
When dealing with large funds: when placing an order with a 5000U position, the slippage directly becomes 5-8 points. A trade that should have earned 200U ultimately lost 150U—equivalent to 'winning direction but losing cost.'
Forced me to switch strategies: from 'intraday short trading' to '4-hour wave trading' (grabbing 20%-50% fluctuations). But new problems arose:
The cycle extends from 'a few hours' to '3-5 days.' The thrill of earning 10% daily is gone, and one must endure the torture of 'holding a position for 3 days without profit.'
Maximum drawdown rose from 10% to 25%. With 2 million U in funds, one drawdown could lose 500,000 U, waking up at night to check the market—this is when I understood that the core of large fund strategies is not 'to earn faster,' but 'to withstand fluctuations.' You must readjust your 'risk tolerance threshold.'
3. The only way out for small funds (5000U-50,000U): master 'intraday short trading.'
Don’t be fooled by people saying 'small funds should do medium to long-term trading.'— the most unbearable for small funds is 'time cost' and 'opportunity cost.' Intraday short trading is the key to breaking through. But the premise is: don’t turn 'intraday' into 'high-frequency gambling orders.'
When I started with 5000U, I only made 2-3 trades a day, holding positions from 5 minutes to 2 hours, strictly adhering to the '75% win rate + 1:1 risk-reward' standard. How did I do it? Here’s a practical case for SOL:
Entry: Look at the 1-minute K-line, BOLL middle band trending upward, price retesting the lower band, and volume increasing by 30% compared to the previous 5 K-lines (confirming funds entering), enter at 120U.
Stop loss: set below the lower band by 0.5U (119.5U), risking 500U (10% position).
Take profit: set near the upper band (120.5U), 1:1 risk-reward, earn 500U and exit.
Result: holding the position for 18 minutes, the price reached 120.5U for profit-taking, netting 480U after fees.
Why not do medium to long-term trading? Small funds doing BTC medium to long-term have 50% margin costs. If there’s a sudden spike gap (like a sudden 8% drop in the early morning), it’s easy to be liquidated; also, waiting a month might only earn 10%, which is less than the 20% monthly return from intraday short trading— the core of small funds is 'accumulating small victories into big victories.' First, roll the fund size up to a level that can withstand fluctuations, then talk about medium to long-term.
4. Four iron rules verified over 28 months: a 'safety rope' from 5000U to millions.
These four rules are not 'techniques'; they are my 'survival bottom line' summarized after losing 300,000 U. Each one has a bloody lesson:
(1) 'Backtest filtering strategies' before opening: do not touch opportunities with a win rate below 75%.
Every day, 1 hour before the market opens, I use the exchange's 'Strategy Tester' (strategy backtesting tool) to pull 6 months of 1-minute K-line data and backtest trading signals for three mainstream coins: ETH, SOL, and XRP (only looking at 'BOLL breakout + volume increase' and 'MACD golden cross + moving average bullish' signals).
Must meet 'backtested over 2000 times, win rate ≥ 75%, risk-reward ratio ≥ 1:1' to post this signal next to the trading software.
Signals that do not meet the criteria, no matter how 'tempting' the market looks, are resolutely avoided.
For example, in November 2023, the backtested win rate for SOL's 'BOLL lower band rebound' signal was only 68%. I managed to hold off trading SOL for 10 days and avoided at least 3 losses.
(2) 'Write a trading will' when placing orders: nail the rules down on paper.
Before each trade, I fill in the 'trading will' in an Excel sheet with a fixed format:
Date Currency Entry Point Stop Loss Point Add Position Point Take Profit Point Position Entry Reason 2024.03.15 SOL 120U 119.5U 121U 120.5U 10% 1-minute BOLL lower band rebound, volume increased by 30%. After filling in, only then place the order. When stop loss/take profit triggers, regardless of market fluctuations, execute according to the table. Once SOL hit 119.5U for stop loss, I had just closed the position, and the price rebounded to 122U, but I had no regrets—if I had changed the stop loss then, I might have lost even more like the previous 500,000U case. The essence of the 'trading will' is to use 'black and white' to fight against your 'emotional hesitation.'
(3) Capital management 'like upgrading a game': position size follows profit.
I set '1000U' as 1 'unit.' The position adjustment rules have only two:
For every 2 units (2000U) earned, increase the next position size by 0.5 units (for example, from 1 unit / 1000U up to 1.5 units / 1500U).
After losing 2 units (2000U), reduce the next position size by 0.5 units (from 1 unit down to 0.5 units / 500U).
Maximum position never exceeds 50% (no matter how much you earn, do not leave full position risk).
For example, starting with 5000U, initially opening 1 unit (1000U), increasing to 1.5 units after earning 2000U, and decreasing back to 0.5 units after losing 2000U—this way one doesn’t lose back profits by 'over-leveraging' after gains and doesn’t miss opportunities by 'under-leveraging' after losses, keeping position sizes aligned with your 'recent profit status.'
(4) 'Post-market review and database building': stop trading for reflection after three mistakes.
I created a 'trading error notebook' in Notion. After the market closes each day, I spend 1 hour reviewing, recording in three categories:
Emotional mistake: for example, impulsively placing an order after seeing calls in the group. Take a screenshot of the chat record and K-line, marking 'exit social software before the next order.'
System bias: for example, not considering the 'non-farm data night' volatility during backtesting led to stop loss triggers. Note: 'pause trading on non-farm data night every month.'
Correct operation: for example, strictly following the 'will' to execute profit-taking, taking screenshots to save and reinforcing my rule awareness.
Once a certain type of error occurs 3 times, I force myself to stop trading for 3 days and rewrite the corresponding rules (for example, after the third emotional mistake, I add the rule 'must turn off WeChat/Telegram before placing an order'). Reviewing is not 'keeping a ledger,' it’s finding 'inevitable errors' from 'occasional losses' to avoid falling into the same pit a third time.
Lastly, I want to say: from 5000U to millions, what I’m most grateful for is not 'how much I earned,' but 'not falling during the scale upgrade.'
When dealing with small funds, do not always think about 'learning large fund strategies.' Master intraday short trading first and roll to a scale that can withstand fluctuations.
When dealing with large funds, do not linger on the 'thrill of small funds.' Accept the reality of longer cycles and larger drawdowns, and prioritize 'preservation of value' over 'appreciation.'
In the end, what matters is not 'who can seize a 10x opportunity,' but 'who can find an adaptive survival strategy at different scales'—after all, surviving means waiting for opportunities to earn big money.
