A few days ago, I saw a brother's complaint in the community, saying that he went from 100,000 to 1,000,000, but as a result of one 'wait a bit longer' order, he returned to square one overnight. The comments section was full of lamentations, with 90% of them being contract players venting their frustrations. Some said, 'I liquidate more often than I drink water,' while others cursed themselves for 'not setting stop losses.'
As an analyst who has been navigating the crypto space for 5 years and has experienced liquidation 3 times before figuring out the ropes, I understand this feeling all too well! It's not that we have bad luck, nor is the market deliberately targeting anyone; it's that 90% of people have stepped into the most fatal pitfall from the very beginning and simply do not set stop losses! Today, I will share with you the stop-loss secrets that I learned through real money, all practical tips that can save beginners and help veterans level up!
Let me pour some cold water on everyone: holding positions is gambling with your life, you will definitely lose once in ten times.
I've seen the craziest friend, who once relied on 'being bold' to grow from 50,000 to 800,000, boasting to everyone that 'being able to hold is the way to go.' As a result, during a sharp drop last year, he stubbornly held on with the mentality that 'it will definitely rebound,' and when he lost from 800,000 to 200,000, he was still holding on. In the end, he directly went bankrupt with less than 10,000 left. Later, he told me that at that time, his mind was filled with 'just wait a little longer and I'll break even,' completely unaware that he was gambling.
Here I must emphasize my core viewpoint: holding positions is not a skill, it's a suicidal operation. The market is always full of surprises, even if you hold correctly 9 times, as long as you get it wrong the 10th time, all previous profits will be wiped out. All stories of bankruptcy start the same way: 'just wait a little longer, it should come back.' Remember this sentence: stop-loss is the bottom line of trading, and maintaining the bottom line is the only way to survive.
Three major stop-loss methods cover everyone from beginners to advanced (a must-see for survival).
Many people think stop-loss is simple, just set a point, but real stop-loss involves techniques and logic. The following three methods are derived from thousands of trades I've summarized, and whether you are a newbie or an experienced player, you can use them directly.
1. 3-Second Stop-Loss Rule: The first lesson for beginners, specifically for treating 'being flustered.'
For friends who are new to contracts, the most common mistake is forgetting to set a stop-loss after opening a position or being indecisive about how much to set. I set a strict rule for you: you must set the stop-loss within 4 seconds after opening a position; don't hesitate for even one more second!
As for the stop-loss margin, let me teach you a super simple calculation formula: stop-loss margin = the reciprocal of the leverage ratio. For example, if you open a position with 20x leverage, set a stop-loss at 5%; with 10x leverage, set a stop-loss at 10%. To give a specific example: if you open a position with 10,000 capital at 20x leverage, then set a stop-loss at 500 yuan, which means you will automatically exit when your loss reaches 9,500 yuan, without holding on for a single extra penny.
Don't think that a 5% stop-loss is too harsh; high leverage itself carries extreme risk. A small stop-loss can help you preserve most of your capital, and as long as you have the green mountains, you don't have to worry about not having firewood. I've seen too many novices lose everything because they were reluctant to part with that small stop-loss amount; everyone must understand this calculation.
2. Dynamic Stop-Loss Technique: A must-have for advanced players to firmly lock in profits.
If the 3-second stop-loss is for survival, then the dynamic stop-loss is the key to 'making big money.' Many people wonder why they end up losing money despite making profits; it’s simply because they don't know how to lock in profits, and when the market turns back, all previous gains are lost.
My dynamic stop-loss technique is very simple; remember these three points:
1. When floating profits reach 5%, immediately move the stop-loss up to the cost price. This way, even if the market suddenly reverses, you can exit at breakeven without losing a penny.
2. When floating profits reach 10%, move the stop-loss up to the 5% profit position. At this point, you have locked in 5% profit, and the remaining is like 'using profit to gamble'; even if stop-loss triggers, you won't lose.
3. When floating profits reach 20%, move the stop-loss up to the 15% profit position. This step is to preserve most of the profits and avoid 'losing the cooked duck due to greed.'
It's like saving a game while playing; every time you earn to a certain level, you 'save the game.' Even if you lose afterwards, you can still keep the previous gains. I used this method and avoided the risk of market corrections several times, turning originally small profits into big ones.
3. Emotional Stop-Loss Method: The most easily overlooked yet crucial 'psychological defense line.'
Trading is half technique and half mentality. Many people don't lack knowledge of stop-loss techniques but cannot control their hands when emotions run high. I've seen too many people rush to 'recover losses' after losing three trades in a row, making things more and more chaotic; I have also seen people become arrogant after making a profit, thinking they are 'invincible,' and end up losing due to heavy positions.
So I set two 'emotional stop-loss rules' that must be strictly followed:
1. If you lose three trades in a row, immediately close the software! No matter how good the market looks afterwards, do not operate again; go work out, take a walk, or have dinner with friends. In short, leave the market for an hour, and come back when your mindset has calmed down.
2. If you feel excited after making a profit, immediately withdraw 50%! Don’t think 'I can earn more'; decisions made in excitement are 99% wrong. Locking in half of the profit not only reduces risk but also stabilizes your mindset.
Real case: How to use stop-loss to capture an entire market movement while only bearing a risk of 2%?
Talk is cheap; let me share a real case from May 2024 when I traded ETH and show you how I used stop-loss techniques to capture the entire upward movement.
At that time, I opened a long position at 3600 using 20x leverage, and according to the 3-second stop-loss rule, I set the initial stop-loss at 3520, with a stop-loss margin of about 2.2%. This means I would only bear a maximum risk of 2.2%, and even if the market reverses, I would only incur a small loss.
Later, when the market rose to 3700, with floating profits of about 2.8%, I immediately moved the stop-loss up to the cost price of 3600 according to the dynamic stop-loss technique. At this point, I had preserved my capital, and even if the market dropped back, I wouldn't lose. Then the market continued to rise, and when it reached 3800, floating profits reached 5.5%, I moved the stop-loss up to 3720, locking in a profit of 3%.
In the end, ETH rose all the way to 4100, and I exited at 4080, earning about 13.3% profit. Throughout the process, I only bore a risk of 2.2%, yet captured almost the entire upward movement. This is the charm of stop-loss—using small risks to seek big rewards.
Lastly, let me give you a few pieces of advice; remembering these can save you from many detours.
1. Stop-loss is not admitting defeat; it’s a tactical retreat. Many people think that stop-loss means 'admitting they were wrong' and can't bear that shame. But in my view, stop-loss is to preserve capital and wait for the next opportunity. As long as you keep your capital, there is still a chance for a comeback; if the capital is gone, you are completely out.
2. All masters have experienced bankruptcy; the difference lies in the speed of stop-loss. Don't think that those who make money have never lost; in fact, they have gone bankrupt too, but they understand 'quick stop-loss' better than ordinary people. If you're wrong, stop-loss in time; don't hesitate or regret. The time spent hesitating could have been used for the next trade.
3. The crypto market is always full of opportunities; what it lacks is capital to survive until the next opportunity. I remind myself of this every day and hope everyone can keep it in mind. The market fluctuates every day, and there are opportunities to make money every day, but if you go bankrupt because of one holding position, even if there are better opportunities later, they will have nothing to do with you.
Today's stop-loss secrets end here; these are experiences I gained with real money. If you find this useful, don't forget to like and follow @链上标哥 , and I will share more trading techniques and market analysis later. You are also welcome to leave comments in the comment section, sharing your experiences of bankruptcy and the reasons behind it. Let's exchange ideas and avoid pitfalls together!
