Why do futures contracts always get liquidated? It's not bad luck; it's that you fundamentally don't understand the essence of trading!
Three major truths that overturn cognition
Leverage ≠ Risk: Position is the lifeline
Using 1% position with 100x leverage, the actual risk is only equivalent to 1% of the full spot position in Bitcoin. A student used 20x leverage to trade ETH, investing only 2% of the principal each time, with three years of no liquidation. Core formula: Real risk = Leverage × Position ratio.
Stop loss ≠ Loss: The ultimate insurance for the account
In the 312 crash of 2024, the common characteristic of 78% of liquidated accounts: losses exceeding 5% without setting a stop loss. Professional trader's iron rule: single trade loss must not exceed 2% of the principal, equivalent to setting an 'electrical fuse' for the account.
Rolling positions ≠ all-in: The correct way to open compound interest
Step-by-step position building model: First position 10% for trial, use 10% of profits to increase position. 50,000 principal first position 5,000 yuan (10x leverage), increase position by 500 yuan for every 10% profit. When BTC rises from 75,000 to 82,500, total position only expands by 10%, but safety margin increases by 30%. #新闻交易
Institution-level risk control model
Dynamic position formula #币安Alpha上新
Total position ≤ (Principal × 2%) / (Stop-loss range × Leverage)
Example: With a principal of 50,000, a 2% stop loss, and 10x leverage, the maximum position = 50000×0.02/(0.02×10)=5000 yuan.
Third-level profit-taking method $ETH
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 when breaking the 5-day line)
In the halving market of 2024, this strategy increased a principal of 50,000 to a million through two trends, with a return rate of over 1900%.
Hedging insurance mechanism $BTC
When holding a position, use 1% of the principal to buy Put options; it can hedge against 80% of extreme risks based on actual tests. In the April 2024 black swan event, this strategy successfully saved 23% of the account's net value.
Deadly trap data evidence $XRP
Holding position for 4 hours: liquidation probability increases to 92%
High-frequency trading: an average of 500 operations per month results in a 24% loss of principal
Profit greed: failing to take profit in time results in an 83% account profit drawdown.
IV. 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 a positive return. Professional traders achieve an annualized return of over 400% through strict stop-loss (average loss of 1.5%) and trend capturing (average profit of 15%).
Ultimate rule:
Single loss ≤ 2%
Annual trades ≤ 20
Profit and loss ratio ≥ 3:1
70% of the time waiting in cash
The essence of the market is a probability game, and smart traders use a 2% risk to capture trend dividends. Remember: control the losses, and the profits will come running. Establish a mechanical trading system that replaces emotional decision-making with discipline; this is the ultimate answer for sustained profitability.
If you are also a tech enthusiast and are delving into technical operations in the cryptocurrency space, feel free to check out my articles on the Gongzhong account (Crypto Circle Sunny Day), where you will get the latest cryptocurrency intelligence and trading techniques.
