Why do contracts always lead to liquidation? It's not bad luck; it's that you fundamentally do not understand the essence of trading! This article, condensed from ten years of trading experience, presents low-risk principles that will completely overturn your understanding of contract trading — liquidation is never the market's fault, but a ticking time bomb you've buried yourself.


Three Major Truths That Disrupt Your Understanding
Leverage ≠ Risk: Position is the lifeline
Using 1% position with 100x leverage results in actual risk equivalent to #Bitcoin being 1% of the spot fully loaded. A certain student operated ETH with 20x leverage, investing only 2% of the principal each time, maintaining three years without liquidation. Core formula: Real Risk = Leverage Multiple × Position Ratio.


Stop Loss ≠ Loss: The ultimate insurance for your account
In the 312 crash of 2024, 78% of liquidated accounts had a common characteristic: losses exceeded 5% without setting a stop loss. Professional traders' iron rule: single trade loss should not exceed 2% of the principal, equivalent to setting a "circuit fuse" for the account.
Rolling positions ≠ All-in: The correct way to open compound interest


Ladder Positioning Model: First position 10% for trial, increase by 10% of profits. With a principal of 50,000, the first position is 5,000 (10x leverage), and for every 10% profit, increase by 500. When BTC rises from 75,000 to 82,500, total position only increases by 10%, but the safety margin increases by 30%.


Institution-Level Risk Control Model
Dynamic Position Formula
Total Position ≤ (Principal × 2%) / (Stop Loss Range × Leverage Multiple)
Example: With a principal of 50,000, 2% stop loss, 10x leverage, the maximum position calculated is = 50000 × 0.02 / (0.02 × 10) = 5000
Three-Stage Take Profit 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 breaking the 5-day line)
In the 2024 halving market, this strategy increased a principal of 50,000 to a million across two trends, yielding over 1900%.
Hedging Insurance Mechanism
Use 1% of the principal to buy Put options while holding positions; tests show it can hedge 80% of extreme risks. In the April 2024 Black Swan event, this strategy successfully salvaged 23% of the account's net value.


Empirical Data on Fatal Traps
Holding positions for 4 hours: liquidation probability increases to 92%
High-Frequency Trading: Averaging 500 operations per month incurs a loss of 24% of the principal
Profit Greed: Not taking profit in time led to an 83% account profit return
Four, Mathematical Expression of Trading Essence


Profit Expectation = (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 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 in cash waiting


The essence of the market is a probability game; smart traders risk 2% to seize trend profits. Remember: control losses, and profits will run. Establish a mechanical trading system to replace emotional decision-making with discipline, which is the ultimate answer for sustainable profitability.

$NEIRO $TURBO #MemeWatch2024