Do you often encounter liquidation in the contract market? This is not just luck but a cognitive bias regarding the essence of trading! This article distills survival rules based on ten years of trading experience that will completely reconstruct your trading cognitive system—liquidation is never a disaster randomly thrown by the market, but a hidden danger buried by the trader themselves.
Three Major Cognitive Reconstructions
1. Leverage ≠ Risk, Position Management is the Lifeline
The product of leverage multiple and position ratio determines the real risk. For example: with 100x leverage using only 1% position, the actual risk is equivalent to 1% of a full spot position. A student used 20x leverage to trade ETH, investing only 2% of the principal each time, and maintained a zero liquidation record for three consecutive years. Core formula: Real Risk = Leverage Multiple × Position Ratio.
2. Stop Loss ≠ Loss, but the Ultimate Safety Net for the Account
In the March 12, 2024 crash event, the commonality among 78% of liquidated accounts was that they did not set stop losses even after losing over 5%. Professional trading iron rule: set the maximum loss limit for a single trade at 2% of the principal, which is equivalent to installing an 'intelligent circuit breaker' for the account.
3. Rolling Position ≠ All-In, The Compound Magic of Laddered Positioning
Using the '10% trial error + profits to increase position' model: Taking 50,000 yuan as an example, the initial position is 5,000 yuan (10x leverage). Withdraw 10% of profits to add to the position every time profit increases by 10%. When BTC rises from $75,000 to $82,500, the total position only increases by 10%, but the safety margin increases by 30%.
Institutional-Level Risk Control System
Dynamic Position Calculation Formula
Total Position ≤ (Principal × 2%) / (Stop Loss Margin × Leverage Multiple)
Example: For a principal of 50,000 yuan, with a 2% stop loss margin and 10x leverage, the maximum position = 50000 × 0.02 / (0.02 × 10) = 5000 yuan
Three-Stage Take Profit Strategy
① Close 1/3 of the position when profit reaches 20%
② Close another 1/3 when profit reaches 50%
③ Set a trailing stop for the remaining position (exit when it breaks below the 5-day moving average)
In the 2024 Bitcoin halving market, this strategy helped turn a 50,000 yuan principal into one million yuan across two trends, achieving a return rate of 1900%.
Hedging Protection Mechanism
Use 1% of the principal to buy put options while holding positions, which can hedge 80% of extreme risks in practice. During the black swan event in April 2024, this strategy successfully saved 23% of the account's net value.
Deadly Trap Data Warning
Holding a position for more than 4 hours: the probability of liquidation rises to 92%. High-frequency trading (average 500 times per month): the principal loss rate reaches 24%. Failing to take profits in time: 83% of account profits experience significant pullbacks.
Mathematical Deconstruction of the Essence of Trading
Profit Expectation = (Win Rate × Average Profit) - (Loss Rate × Average Loss)
When setting a 2% stop loss and 20% take profit, only a 34% win rate is needed to achieve positive returns. Professional traders achieve annualized returns of over 400% through strict stop losses (average loss of 1.5%) and trend capturing (average profit of 15%).
Ultimate Trading Rule
Single loss ≤ 2% of principal, annual trades ≤ 20, profit-loss ratio ≥ 3:1, maintain 70% time in cash observing.
The essence of the market is a probability game, and wise traders leverage a controlled risk of 2% to tap into trend dividends. Remember: strictly controlling loss margins will naturally lead to profits. Establish a mechanical trading system, replacing emotional decisions with discipline—that is the core secret to sustained profitability.
Trading cryptocurrencies is about repeatedly doing simple things, consistently using one method over a long time until achieving mastery. Trading can be like any other industry, where practice makes perfect, allowing you to make decisions effortlessly.
This year marks my seventeenth year of trading cryptocurrencies. I started with 10,000 yuan, and now I support my family through trading! I can say that I have tried 80% of the methods and techniques in the market. If you want to make trading a second career to support your family, sometimes listening more and observing can help you discover things outside your current understanding, potentially saving you five years of detours!
Follow me@大师兄说币 to keep up with the trend and get rich together! Bulls and bears coexist.
