$ETH Why do contracts always lead to liquidation? It's not bad luck; it's because you fundamentally don't understand the essence of trading! This article encapsulates a decade of trading experience with low-risk rules that will completely overturn your understanding of contract trading—liquidation is never the market's fault, but a ticking time bomb you've planted yourself.
Three great truths that overturn understanding.
Leverage ≠ risk: position is the line between life and death.
Using 1% position at 100x leverage, the actual risk is only equivalent to 1% of a full spot position. A certain student used 20x leverage to trade ETH, only investing 2% of the principal each time, with three years of zero liquidation records. Core formula: real risk = leverage multiple × position ratio.
Stop-loss ≠ loss: the ultimate insurance for the account.
In the March 2024 crash, 78% of liquidated accounts shared a common characteristic: a loss exceeding 5% without setting a stop-loss. Professional traders' iron rule: a single 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 position building model: first position 10% for trial, increase position by 10% of profits. For a 50,000 principal, the first position is 5,000 (10x leverage), adding 500 for every 10% profit. When BTC rises from 75,000 to 82,500, total position only increases by 10%, but safety margin increases by 30%.
Institution-level risk control model.
Dynamic position formula.
Total position ≤ (principal × 2%) / (stop-loss range × leverage multiple).
Example: 50,000 principal, 2% stop-loss, 10x leverage, calculating the maximum position = 50000 × 0.02 / (0.02 × 10) = 5000 yuan.
Three-step take-profit method.
① Close 1/3 at 20% profit ② Close another 1/3 at 50% profit ③ Move stop-loss for the remaining position (exit if below the 5-day line).
During the 2024 halving market, this strategy increased a 50,000 principal to one million during two trends, with a return rate exceeding 1900%.
Hedging insurance mechanism.
When holding positions, use 1% of the principal to buy Put options, which can hedge 80% of extreme risks based on tests. In the April 2024 Black Swan event, this strategy successfully saved 23% of account net value.
Deadly trap data empirical evidence.
Holding a position for 4 hours: liquidation probability increases to 92%.
High-frequency trading: an average of 500 operations per month with a loss of 24% of the principal.
Profit greed: failure to take profit in time leads to an 83% profit drawdown in the account.
4. The 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, a win rate of only 34% is needed to achieve positive returns. 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 trading ≤ 20 trades.
Risk-reward ratio ≥ 3:1.
70% of the time, stay in cash and wait.
The essence of the market is a probability game. Smart traders use 2% risk to seize trend dividends. Remember: control losses, and profits will naturally run. Establish a mechanical trading system to let discipline replace emotional decision-making; this is the ultimate answer for sustained profits.
I've finished writing, keep going! I am Xiao Qi, a sincerely wishing you to get rich in the crypto circle old investor.
Continue to pay attention to BTC, ETH, BNB.
Cows have their strategies, bears have their ways of playing.
Xiao Qi won't lead fans to liquidation, nor will they blindly open positions.
It's all about seeking victory steadily, taking a solid approach. Those who want to profit, keep up with Xiao Qi's ride!
