The knocking at three in the morning wakes you from your wealth dreams more effectively than any alarm clock.
"Bro, I'm done, 200,000 USDT just like that!" Last Wednesday at dawn, my cousin A Qiang stood at my door with messy hair, his eyes red and swollen like a defeated soldier. Looking at the glaring 'liquidation' on his phone screen, I sighed—another victim swallowed by all-in leverage.
In the world of cryptocurrency, going all-in is like walking a tightrope; it seems thrilling but hides deadly risks. How many people misunderstand that 'going all-in' means 'betting everything', only to end up with 'losing it all'. As someone who has been in this game for many years, today I will share three rules that have helped me maintain a zero liquidation record for three years.
01 The Double-Edged Sword of All-In: The Temptation of Profit and the Fangs of Risk.
All-in trading is essentially an act of trading with all available funds. Its charm lies in the fact that when the market trend aligns with expectations, the potential profits can be substantial due to the large amount of capital invested.
But the danger of this operating method is often underestimated by investors. When you operate fully in the market, especially with high leverage, it is equivalent to exposing yourself completely to the hail of bullets in the market. The cryptocurrency market is inherently highly volatile, and all-in trading further amplifies the impact of this volatility on your account.
More critically, trading with all funds may lead to liquidity issues. When the market experiences severe fluctuations, large all-in orders may be difficult to execute, or the execution price may differ significantly from expectations, further exacerbating losses.
Data shows that the maximum drawdown of an all-in betting strategy can reach -54%, with a very low win rate. In the recent Bitcoin crash, about 87% of investors using the all-in margin model lost everything during the crash; some lost their down payment for their wedding home, while others incurred heavy debts.
02 Three life-saving iron rules: The bloody tears of veteran investors.
Iron Rule One: No single trade should exceed 20% of total funds.
Many investors misunderstand the essence of all-in, believing that all-in means betting all funds at once. This is not the case; wise all-in management controls the risk exposure of each trade.
I have an unchanging principle: for a 10000U account, I invest a maximum of 2000U in each trade. This way, even if I make a wrong judgment and stop-loss with a 10% loss, I only lose 2% of the total funds, which will not deal a fatal blow to the overall account.
This is vastly different from traditional full position operations. Full position operations can lead to a passive situation where buying and selling become difficult if there is a decline. Remember, the essence of position management is survival first, profit second.
Iron Rule Two: Strictly control total daily losses within 5%.
In the highly volatile cryptocurrency market, it is not uncommon to make consecutive erroneous judgments. The important thing is not to let consecutive mistakes destroy your account.
I have set a strict rule for myself: when total daily losses reach 5%, immediately stop trading and shut down the computer. This rule has helped me survive through multiple severe market fluctuations.
Why 5%? Because this ratio gives the account a certain space for fluctuation while ensuring that there is enough principal to recover after consecutive losses. If you lose 5% for 5 consecutive days, your account will still retain 77% of the funds, leaving the possibility of recovering the losses.
Iron Rule Three: Do not open positions in a sideways market, do not add to profits.
Most of the time, the market is in a range; truly trending markets are rare. Opening positions recklessly in a range market can easily lead to losses from back-and-forth movements.
My strategy is to only open positions when the trend clearly breaks, and watch patiently during sideways movements; once a position is opened, do not add to it midway to avoid being influenced by emotions.
After making a profit, especially be wary of the temptation to "add to profits." Adding to positions after making a profit often stems from excessive confidence, which can lead to giving back what was originally a considerable profit. Setting clear take-profit points and strictly executing them is key to long-term profitability.
03 Psychological Construction: The Invisible Cornerstone of Successful Trading.
In cryptocurrency trading, psychological factors are often more important than technical analysis. Common psychological pitfalls include FOMO, fear and panic, greed, overconfidence, etc.
When the market rises rapidly or a certain token is hyped, traders are prone to act impulsively due to FOMO (Fear of Missing Out) and buy at high prices. The result is often buying at high levels, followed by price declines leading to losses.
Successful traders need to establish their own psychological defense system:
Develop a clear trading plan: including entry points, stop-loss points, and take-profit points.
Control emotional fluctuations: Avoid being influenced by greed or fear.
Maintain patience and discipline: Avoid frequent trading and impulsive actions.
You can use some tools to assist in decision-making, such as the Fear and Greed Index and social media sentiment analysis tools. When market sentiment is overheated, these tools can remind you to stay calm.
04 Advanced Techniques: How to Make All-In Your Amulet.
If used well, all-in trading can not only reduce risks but also improve capital utilization. Here are a few practical tips:
Building positions in batches is an effective way to reduce risk. Do not invest all your funds at once; instead, gradually build your position step by step. For example, invest part of your funds when the Bitcoin price breaks through a key resistance level and add to your position after confirming a pullback.
Diversifying investments can reduce concentrated risk. Although trading all-in, funds can be allocated to different cryptocurrencies. Of course, this requires in-depth research on the fundamentals of each project, rather than blindly diversifying.
Setting stop-loss orders is the "safety valve" of all-in trading. A stop-loss order is an order to automatically close a position when the market price reaches a predetermined level, which helps manage risk and prevent catastrophic losses.
Closely monitoring the market is also essential. The cryptocurrency market is ever-changing, and closely monitoring the market during all-in trading is crucial. This will enable traders to make quick decisions and adjust positions if necessary.
Conclusion: All-in is not about gambling with your life, but rather an art.
My friend Lao Chen was once a typical representative of "monthly liquidation." Since following these three iron rules, he has grown his 5000U account to 8000U in three months. He said, "It turns out that all-in is to live more steadily, not to gamble bigger."
In the wild world of cryptocurrency, surviving is always more important than making quick money. Bet less on direction, control your positions more, and slow is fast. Remember, those who can survive in the market and still make money are always the ones who dare to reach out first, but the way you reach out determines how far you can go.
All-in trading itself is not the problem; the problem is how we use it. Treat it as a chip on the gambling table, and you may lose everything; treat it as a finely tuned tool, and it may help you stabilize profits.
True trading masters are not those who become famous in one battle but those who survive in the market and can continue to make profits. Risk control is always more important than pursuing profits; this is a lesson learned with real money by every seasoned trader.
Like and follow, in the next issue I will share "How to Predict Big Player Movements through On-Chain Data," let us walk more steadily and further on the investment road!
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