Crypto Contract: Why Are People Lining Up to Lose Money?
Understand These 3 Points to Survive
Do you know why the liquidation rate in the crypto contract market exceeds 90%, yet there are still a steady stream of people rushing in?
Today, I will reveal three bloody truths to you; after reading, you will thank me.
1. Leverage is not the "safe zone" you think it is
Those who boast "only using 5x leverage is very conservative" will never tell you
When Bitcoin's daily volatility exceeds 10%, 5x leverage = betting 50% of your principal on your life. Real professional players understand this formula:
Actual Risk = Leverage × Volatility × Position Size
For example, if you use 20% of your principal with 5x leverage, in extreme market conditions, it’s equivalent to 100% of your principal evaporating. This is why I insist on three iron rules:
Single position ≤ 10% of principal
Total leverage ≤ 3x
Stop-loss must be set at ±5% of the opening price
2. Contracts and spot trading are two different creatures
In spot trading, you can play dead for three years, but contracts are a time-bomb with a countdown.
3. 80% of profits come from 20% of market movements
Those who shout "catch every fluctuation" have grass two meters high on their graves. The secret to my 7-fold return last year is actually:
90% of the time in cash observing
Only entering during significant changes in the BTC weekly chart
Using hedging strategies
Now do you understand why ordinary people always lose when trading contracts?
Here’s a piece of wisdom that helped me avoid three major liquidations: "When you feel that not betting means missing out on a billion, that is exactly when you should go to sleep"
In a bull market, don’t be the fuel; if you must, be the one picking up the fuel
