Last week, while 12 trillion funds in the crypto market vanished, 87% of people in my fan group were profitable — not because I predicted the market, but because we locked the risk within controllable limits through position management. Today, I will thoroughly explain this set of practical strategies for Binance contracts, enabling newcomers to avoid pitfalls and veterans to enhance efficiency. By the end, there will be a unique risk control table to collect.
Let me reveal a harsh truth: 90% of liquidations are not due to incorrect direction, but rather due to positions being against human nature. Last month, a fan with a capital of 100,000 opened a full position with 50x leverage, dreaming of doubling their investment with just a 3% increase, but was wiped out by a 1.2% retracement. Remember this: In the futures market, the oxygen for survival is position size, not predictions.
The core of position management in Binance contracts comes down to three things:
I. Choosing the right margin mode is equivalent to insuring your account.
Newbies must use the 'per-position mode', where losses are limited to the margin of the current position, preventing impact on other funds. Experienced traders can use the 'full-position mode' to increase capital utilization when trends are clear, but global take-profit and stop-loss must be set. Last week, I placed a long position at ETH 1800 points using full-position mode with 20% of my capital, gaining 300 points while avoiding weekend spikes.
II. Position size formula: calculate using volatility, don’t rely on intuition.
Let me share a practical insight: I always follow the rule 'single position size = principal × reciprocal of leverage × volatility coefficient'. For example, if BTC has a current volatility of 5% and I use 10x leverage, the single position cannot exceed 2% of the principal. The Binance app can pull up 7-day volatility data; if you don’t know how to view it, you can directly use the table I organized (comment '1' in the comments section to get it).
III. Hedging positions are a lifesaver for advanced traders.
When the market is sideways, I open a 10% long position in BTC while also opening an 8% short position in ETH, using the correlation between the two assets to arbitrage the price difference. This 'hedged position' operates well in Binance's cross-asset contracts, reducing risk while profiting from price fluctuations. Last month, I managed to achieve a 15% profit during a sideways market using this strategy.
Finally, highlight this: The ultimate goal of position management is 'to keep every loss within the plan'. I have engraved the 'three principles of position management' derived from three years of practical experience on the screen:
Single asset positions must not exceed 30% of the principal.
Total leverage multiplied by total position ratio must not exceed 5.
After two consecutive losses, forcibly reduce position size by 50%.
Tomorrow at 10 AM, I will demonstrate position simulation for Binance contracts in the fan group, guiding everyone to simulate operations with a capital of 10,000 over a week. Students who followed my guidance have averaged a stable monthly return of 22% over the past three months. Remember, profit from contracts is not luck, it’s systematic profit — set up your position table tonight, and when the market opens tomorrow, you will find that trades without liquidation can allow you to wake up smiling.
Click to follow, and I'll remind you before the big market moves, so we can turn position management into a money-printing machine together.
