From an 800,000 liquidation to a 10 million account, the core of survival in the crypto world is this group of hard-earned formulas.
In ten years in the crypto world, the most painful memory is that 800,000 loss — holding a position for 4 hours, watching the account go from floating profit to liquidation, and ultimately ending up with a four-digit balance.
Now that my account is stable at the tens of millions level, I know better than anyone: it's not luck that allows one to climb out of the mire, but this set of strategies validated by blood and tears.
1. Three major truths that disrupt cognition: survival logic learned only after losing 800,000
Leverage ≠ risk: position is the line of life and death
When I first entered the crypto world, like most people, I was afraid of leverage, always thinking that 10x leverage was gambling. It wasn't until after experiencing liquidation that I understood: the risk lies not in the leverage multiple, but in position control. With 100x leverage using 1% of the position, the actual risk is only equivalent to that of being fully invested in spot. One of my students used 20x leverage to trade ETH, only investing 2% of the principal each time, and maintained a three-year record without liquidation, achieving an annualized return three times higher than spot trading. The core formula can be summed up in one sentence: Real risk = Leverage multiple × Position percentage. If I had understood this back then, the 800,000 loss could have been reduced by at least half.
Stop-loss ≠ loss: the ultimate insurance for your account
On the day of the 312 crash in 2024, I felt a chill looking at the backend data: the common problem among 78% of liquidated accounts was that they did not set a stop-loss even after losing over 5%. My 800,000 loss was also due to clinging to the illusion of 'it will always bounce back', dragging a floating loss from 3% to 20%, and ultimately being forcibly liquidated by the system. Now I’ve installed a 'fuse' for my account: a single loss must not exceed 2% of the principal, just like a household circuit that automatically cuts off in case of overload; this tactic helped me avoid the black swan event in April 2024, preserving my 3 million principal.
Rolling position ≠ going all in: the correct way to open up compound interest
In the early years, I always thought about 'recovering all at once', so whenever I made a profit, I would go all in, only to find that profits came quickly but left even quicker. Later, I developed a stepped position-building model: the first position is 10% for trial and error, using only 10% of the profits to add to the position. With a principal of 50,000, the first position is 5,000 yuan (10 times leverage), and I add 500 yuan to the position for every 10% profit. Just like the wave from 75,000 to 82,500 in 2024, the total position only expanded by 10%, but the safety margin increased by 30%, ultimately earning more than if I had gone all in.
2. Institutional-level risk control model: from 'passive liquidation' to 'active control'
Dynamic position formula: calculate clearly before placing an order
Before opening a position, I will definitely take out my calculator: Total position ≤ (Principal × 2%) / (Stop-loss range × Leverage multiple). For example, with a principal of 50,000 and a 2% stop-loss, using 10x leverage, the maximum position is 50000×0.02/(0.02×10)=5000 yuan. This formula acts like a ruler, helping me accurately control the rhythm in the 2024 halving market, turning 50,000 principal into a million across two trends, with a return rate exceeding 1900%.
Three-tier take profit method: secure your profits
Close 1/3 of the position at a 20% profit; what I hold in hand is real money; close another 1/3 at a 50% profit to reduce the cost of holding; for the last part of the position, use a trailing stop — exit if it breaks the 5-day line. Last year, with a certain cryptocurrency, I used this tactic to preserve 80% of my profits before a pullback, while my friends who held on ended up with barely anything.
Hedging insurance mechanism: give positions a 'bulletproof vest'
While holding a position, I use 1% of my principal to buy Put options, which have been proven to hedge 80% of extreme risks. During the black swan event in April 2024, when the market dropped by 30%, my account only lost 5%, thanks to this tactic. Remember: black swan events in the crypto world are not accidental; they are inevitable. Don't go out without a 'bulletproof vest'.
3. Deadly trap data evidence: A pitfall guide earned from an 800,000 loss
Holding a position for 4 hours: probability of liquidation increases to 92%
I've reviewed my trading records; that 800,000 loss began to spiral out of control from the 30th minute of holding. Data doesn't lie: after holding a losing position for over 4 hours, the probability of liquidation skyrockets from 15% to 92%. Now, as soon as I incur a loss of over 2%, I will immediately cut my position, even if there is a rebound afterward, I won't regret it — opportunities are always there, but once the principal is gone, it's truly gone.
High-frequency trading: 500 trades per month waste 24% of principal
When I first started, I could trade over 20 times a day, thinking 'more trades mean more money'. Later, I found that accounts with an average of over 500 trades per month lose 24% of their principal due to fees and slippage. Now, I strictly control my trading frequency, limiting annual trades to no more than 20, and I earn more steadily instead.
Profit greed: accounts that do not take profits in time have 83% of profits returned
I've seen too many people go from floating profits of a million to leaving with losses, all because they 'wait for a higher point'. Data shows: accounts that do not take profit in time after making a profit, 83% will return all profits within a month. My principle is: when expectations are met, exit in batches, it doesn't matter how much you earn, what's important is to pocket it.
4. The mathematical expression of trading essence: defeating the market with probability
Profit expectation formula has long revealed the truth: (Win rate × Average profit) - (Loss rate × Average loss). When I set a 2% stop-loss and a 20% take profit, even with a win rate of only 34%, I can still make money in the long run. Over the past few years, by strictly controlling my stop-loss (average loss of 1.5%) and capturing trends (average profit of 15%), I've stabilized my annualized return at over 400%.
The ultimate rules are these four:
Single loss ≤ 2% (stay alive)
Annual trades ≤ 20 (make fewer mistakes)
Profit-loss ratio ≥ 3:1 (earn more)
70% of the time, stay out of the market and wait (for opportunities)
The essence of the market is a probability game; smart traders never bet their entire fortune, but risk only 2% to seize trend rewards. Just like my comeback from an 800,000 loss to a net worth of tens of millions, it's not about predicting the market, but controlling losses — as long as you survive, profits will run. But always remember: the risks in the crypto world far exceed imagination; play with spare money, don't gamble your life away.
In the crypto world, technology is king. Focus on refining the operational system, from order placement skills to trend analysis; opportunities are hidden in the details. Don't want to rely on luck? Follow me and use technology as your foundation.
