Why do you always get liquidated?
It's not bad luck, but rather that you fundamentally don't understand the essence of trading! This article, which condenses ten years of practical experience into low-risk rules, will completely overturn your understanding of contract trading—liquidation has never been the market's fault, but rather a time bomb you've set yourself.
Three Major Truths that Disrupt Understanding
Leverage ≠ Risk, Position is the Lifeline
Using 1% position with 100x leverage, the actual risk is only equivalent to 1% of a full spot position. One student operated ETH with 20x leverage, investing only 2% of the principal each time, and has had three years without liquidation. Core formula: Real risk = Leverage multiplier × Position ratio.
Stop-loss ≠ loss, it is the ultimate insurance for the account
During the crash on March 12, 2024, the common feature of 78% of liquidated accounts: losses exceeding 5% without setting stop-loss. Professional trader's iron rule: Single loss must not exceed 2% of the principal, which is equivalent to setting a "circuit fuse" for the account.
Rolling positions ≠ all-in, the correct way to open compound interest
Ladder position building model: First position 10% for trial and error, use 10% of profits to add positions. 50,000 principal, first position 5,000 (10x leverage), add 500 for every 10% profit. When BTC rises from 75,000 to 82,500, the total position only expands by 10%, but the safety margin increases by 30%.
Institution-level risk control model
Dynamic position formula
Total position ≤ (Principal × 2%) / (Stop-loss margin × Leverage multiple)
Example: 50,000 principal, 2% stop-loss, 10x leverage, calculating the maximum position = 50000 × 0.02 / (0.02 × 10) = 5000.
Three-step profit-taking method
① Take profit 1/3 at 20% profit, ② take profit another 1/3 at 50% profit, ③ move stop-loss for remaining position (exit if below the 5-day line). In the 2024 halving market, this strategy increased a 50,000 principal to a million during two trends, with a return rate of over 1900%.
Hedging insurance mechanism
When holding a position, use 1% of the principal to buy Put options, which can hedge 80% of extreme risks based on testing. In the April 2024 black swan event, this strategy successfully saved 23% of the account's net worth.
Empirical data on deadly traps
Holding a position for 4 hours: The probability of liquidation increases to 92%. High-frequency trading: An average of 500 operations per month results in a 24% loss of principal. Profit greed: 83% of the account's profits are given back due to failure to take profits in time.
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% take-profit, only a 34% win rate is needed to achieve positive returns. Professional traders achieve annualized returns of over 400% by strictly enforcing 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 is spent waiting with no position.
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 run naturally. Establish a mechanical trading system to let discipline replace emotional decision-making, which is the ultimate answer for sustained profitability.