Rules are more important than being smart, survival is more important than making money
I stared at the account balance on the screen that had returned to zero once again, my fingers cold. This is my seventh year in the crypto world, starting with a principal of eight thousand, experiencing the instant evaporation of assets, and also feeling the solid sense of stable profit. Today, I want to share the lessons learned over the years with the most straightforward words.
Liquidation is not about whether it will happen, but when it will happen
Many people think liquidation is a low-probability event, but let's do a harsh math calculation: assuming the probability of liquidation for each trade is only 0.1%, this probability seems small, right? But after trading a thousand times in a row, the probability of at least one liquidation soars to 63%; after two thousand trades, this probability reaches an astonishing 87%.
The higher the leverage, the more this probability grows exponentially, not linearly. I remember the craziest night when I got liquidated three times in a row; when I closed my eyes, my account was left with just a screenshot.
Data shows that high-leverage accounts are extremely fragile during severe fluctuations across the network. For example, during a Bitcoin flash crash in July 2025, the total liquidation amount across the network reached $465 million within 48 hours, and many high-leverage accounts were instantly wiped out. This is why leverage is called 'a magnifying glass for profits and a shredder for capital.'
The transaction fee is an invisible knife, quietly cutting into your profits.
If you think a 50% win rate can keep you afloat, you are too naive. If the transaction fee is only 0.1% each time, after 1,000 trades, the fees will eat up 10% of your capital.
My true record from 2022: That year, the actual trading profit was 8%, but the transaction fees were as high as 11%, resulting in a final loss of 3%. Later, I completely changed my strategy, trading only about thirty times a year, and then I started to retain money.
Many people do not understand how the contract fee is calculated—it is based on the position value, not your margin. If you use 10 times leverage, the actual fee cost relative to your capital is magnified by 10 times. It’s like acne; it doesn’t show on the surface but is constantly eroding your account.
The road to recovering losses is several times more difficult than imagined.
Mathematics is cruel: If you lose 50%, you need to earn back 100% to break even; if you lose 90%, you need a 900% return to return to the starting point.
Leveraged trading turns cliffs into abysses. Many people initially only incur small losses, but due to emotional loss of control, they start trading frequently and holding large positions, resulting in accelerated falls. In my experience of nearly going to zero, the biggest lesson was: emotions are the number one killer for leveraged traders.
What did the 3% of continuous profit-makers do right?
Over the past seven years, I have observed that those around me who can continue to profit mainly fall into three categories:
Small funds for short-term gains: Strictly limit capital, operate with only 100 USDT each time, take profit at 5%, and exit, with a maximum of two trades per day, decisively shutting down regardless of profit or loss. This may seem simple, but it requires strong discipline.
Masters of risk-reward ratio: They do not pursue a high win rate but focus on the risk-reward ratio. Their win rate may only be 40%, but a single profitable trade can cover five losing trades. This is the path I ultimately chose—single trade risk ≤ 2%, risk-reward ratio ≥ 1:3; if you don’t understand the market, stay out.
Miracle creator of rolling positions: Such people are rare; they usually play small, but during a major market event that occurs once every five years, they may go all in, possibly rolling from 50,000 directly to 10 million. However, this is a one-in-a-thousand probability, something you cannot seek.
Heartfelt advice for newcomers.
Practice with spot trading first: If you can steadily profit in the spot market for over six months, then consider using leverage. Leverage is an amplifier; it will only magnify your abilities (or incompetence).
Divide the capital into 20 parts: Only invest one part each time, so you have at least 19 chances to turn things around. Experienced traders recommend that total risk capital should not exceed 10% of liquid assets.
Keep writing trading notes: For each trade, write down the reasons for opening the position, the plan for closing it, and your insights, and review weekly. Don’t make money from holes you can’t find.
The final advice.
Contracts are neither a natural disaster nor a cash machine; they are more like a mirror reflecting the greed and fear deep within you.
The market never shows pity for novices; it only rewards those who play by the rules. If you still fantasize about getting rich overnight, leverage will help you return to zero at lightning speed; but if you are willing to spend a year building a system and honing your discipline, perhaps there will be a place for you among the 3% of profit-makers.
Rules are more important than intelligence; survival is more important than making money.
I have walked this path for seven years, and I have paid enough tuition. I hope that after reading these heartfelt words, you can decide more clearly whether to jump into this 'fire pit'. The crypto space is not short of opportunities, but it lacks those who can survive to the next bull market.
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