The futures market is like domestic violence, there are only 0 times and countless times, and I have already washed my hands of it.
In 2015, I first came into contact with the cryptocurrency world, when Bitcoin was only a few hundred dollars. In the past decade, I have had three liquidations in futures trading, the worst being on March 12, 2020, when I watched a position worth 10,000 USDT go to zero in half an hour.
It wasn't until the past two years that I relied on a set of 'anti-human' methods to stabilize my annual earnings at seven figures. Many people often ask me 'Should I hold the position or stop loss', but I increasingly realize that this question itself is a trap.
A true profit master never treats stop loss as a bible, but rather as an option in the risk management toolbox.
One, my love-hate relationship with stop-loss.
In the early years, I treated stop-loss as a 'lifesaver', resulting in frequent stop-loss + fees + slippage, and I lost all $8,000 in half a year. The most ridiculous time was when I had just stopped loss, and the market rushed in the direction I originally planned, leaving me dumbfounded in front of my computer.
This rigid stop-loss habit is reminiscent of many people's weight loss attempts—starving themselves (stop-loss), and once they see weight loss, they binge (chasing gains), resulting in an even unhealthier outcome (losses).
Playing contracts in the cryptocurrency market is essentially a battle of mentality. I have personally witnessed a civil servant make over 60 million by going long on Litecoin in 2017, only to end up with over a million in debt when leaving. Such stories are common in the cryptocurrency market: 'many get rich overnight, but few end well.'
Two, the truth about stop-loss: it's not the Bible, but an alternative plan.
After several lessons from liquidation, I realized one thing: high win-rate trading strategies do not need rigid stop-loss.
This sounds counterintuitive, but it's a fact. The key is whether your trading model has a probabilistic advantage and has been validated by big data.
For different trading targets and leverage, the stop-loss strategy is completely different:
Mainstream coins like Bitcoin/Ethereum: 2-3 times leverage, if the trend doesn't break, you can hold the position. From 2020 to now, Bitcoin has risen from $3,800 to over $35,000, and any mid-way holding as long as the leverage is low enough will eventually profit.
Altcoins: even with 3x leverage, you must set stop-loss. I remember an investor who held EOS from a cost price of 50 yuan all the way down to 20 yuan before liquidating, losing over 4 million.
The core is that leverage is highly related to the target. I once used 10x leverage to hold altcoins, and a big bearish candle wiped me out completely; this lesson has stayed with me for a lifetime.
Three, avoid those 'invisible killers'.
In cryptocurrency trading, the biggest invisible killer is not misjudging the market, but transaction fees and slippage.
Research data from BOSS Wallet shows that the annualized return rate of low-frequency traders reaches 18.5%, significantly higher than the 11.4% return level of high-frequency traders. Frequent adjustments not only risk missing key upward trends but also continuously erode profits due to transaction friction costs.
I currently trade no more than 5 times a month and only make trend trades. For example, I only enter when BTC breaks through a key position; a single profit is enough to cover multiple trial and error costs. This strategy not only reduces trading wear but also stabilizes my mindset.
Four, the 'stupid method' that changed my trading career.
After multiple liquidations, I finally found the only secret to contract trading: strict position management.
Specifically, I divide my funds into two parts: 80% for long-term holding in spot markets, and 20% for contract trading. For the contract part, I insist on 'dynamic half-positionism', meaning I only use half of the funds to open positions, leaving room to cope with emergencies.
For example, when the price of EOS is $3, I would set the liquidation price of the contract at $1.5, so even if the market fluctuates in the short term, I won't be liquidated.
This method seems clumsy, but it has allowed me to maintain stable profits in the recent volatile market. While others pursue 'getting rich overnight', I pursue 'never being liquidated'.
Five, heartfelt words for contract trading beginners.
If you are new to the cryptocurrency market, I would like to give you a few pieces of advice:
First, beginners should not touch high leverage. I've seen a senior student use 1,800 yuan as capital to open high leverage, turning it into over 10,000 in a week, but after three liquidations, it was almost zero. High leverage is a gamble, and 'playing contracts is gambling.'
Second, backtest your strategy using historical data. Before trading live, ensure that your strategy can be profitable with historical data to avoid unnecessary tuition fees.
Third, small positions for trial and error. The cryptocurrency market is always full of opportunities; what it lacks is capital. Some investors even sell their houses to invest 200,000 yuan, only to end up borrowing online loans in an attempt to recover their losses.
Finally, remember one thing: the exchange is always the winner, and you are always at a disadvantage in the game. Those who shout that 'stop-loss is the Bible' mostly want you to trade frequently and contribute fees to the platform.
Conclusion: the real moat in cryptocurrency trading.
In ten years of cryptocurrency trading, I have witnessed too many myths of getting rich overnight and seen even more tragedies of instant zero. A trader named Li Ye revealed the truth: 'it feels like losing two years', ultimately leaving the cryptocurrency market with over 2 million in debt.
The essence of trading is not about who is smarter, but about who is more disciplined. In this 24-hour non-stop global casino, the biggest enemy is not the market, but your own inner demons.
True masters of making money are those who understand the game rules, hold the bottom line, and let profits roll in naturally.
If you find this article helpful, please follow my Twitter account @戊戌散人; I will regularly share more insights and risk alerts about cryptocurrency trading. In this market full of temptations and traps, we walk together, take fewer detours, and protect our capital.
Have you ever experienced the pain of liquidation or stop-loss? Feel free to share your story in the comments section, and let's grow together#巨鲸动向 $ETH .
