The cryptocurrency market never sleeps, but your position will. Behind every liquidation lies an opportunity for reflection.
At three in the morning, the cold light from the phone screen pierced the darkness like a silent knife. The message came from my apprentice Xiao Wang: 'Bro, I've been liquidated again.'
This is already his third liquidation this month. Ten minutes later, the K-line soared, a pillar reaching the sky, as if the recent bloodbath was just a cruel joke played by the market.
I didn't comfort him, but instead said directly: 'Pull out the funding rate records for the last 72 hours and let’s take a look.'
The data quickly came in: the rate remained positive, reaching a maximum of 0.2%/8 hours. Converted, the bulls need to pay the bears a fee of 0.05% per hour, accumulating to as much as 12% over three days—equivalent to paying a 'breathing tax' of 12% before the battle even begins.
I. The Truth Behind Fees: You are not a trader, just a temporary chip in the "casino."
"This 12% is the ticket collected in advance by the dealer." I said to Xiao Wang in the voice chat, "Many people think they are trading, but they are just signing their lives away. In this market, exchanges are the dealers, and most of us are just chips on the table."
The crueler part is the wordplay of the liquidation line. Theoretically, 10x leverage can withstand a 10% reverse fluctuation, but with slippage, fees, and the system's automatic reduction mechanism, an actual fluctuation of about 6% is sufficient to trigger liquidation. Big data has long calculated precisely where each needle should pierce, and even the residual value after your liquidation is calculated to the exact cent.
In the past three months, I have witnessed too many similar cases: a well-known trader went from a floating profit of $70 million to zero, while another lost $25.8 million in just three hours.
These stories are not exceptions but rather the norm in the market. In a hellish bull market, star traders can also lose everything; survivors rely not on luck but on strategy.
II. My Survival Rules: Three phrases to resist black swans.
I gave Xiao Wang an extremely simple system with only three core principles:
Never go all in, and do not exceed 10% of the principal for a single position.
This means that even if a 50% crash occurs, the total capital loss is controlled within 5%. In the cryptocurrency market, which is 4-5 times more volatile than traditional markets, leaving room is equivalent to preserving life.
Abnormal fees, immediately reduce leverage.
When the funding rate continues to deviate from normal levels, it is an important signal of overheated market sentiment. Just like fishermen returning to port to avoid the storm before a typhoon, smart traders will choose to reduce risk exposure at this time.
Withdraw the principal from profits first, and roll over the profits in half.
After making a profit on any trade, first withdraw the principal and only use the profits to continue rolling. This ensures that you never lose your principal and use "market money" to earn more money.
The effectiveness of this method has been validated in practice. When ETH fluctuated around $2900, we established the first batch of positions and set a 3% stop-loss line. The price dropped to $2800, triggering the stop-loss, and continued to dip to $2700. However, because the stop-loss protected most of the funds, we successfully bought back cheaper chips at $2650 and eventually closed the position at $3300 for profit.
III. Emotion Management: The most dangerous "enemy" in a bull market is not the market but oneself.
Xiao Wang later achieved stable profits for three consecutive weeks. He sent me a red envelope to express his gratitude, but I did not accept it. I only replied with one sentence: "Living is the best trade."
Behind this sentence is a profound understanding of the essence of the market. The cryptocurrency market operates 24 hours a day, and opportunities are never absent; what is lacking are rational participants who are willing to wait for signals, dare to miss out, and know when to stop.
Restraint and rationality are the ultimate rules for survival in a hellish bull market. Many investors are actually gambling but mistakenly believe they are trading. The difference is that the former relies on luck and emotion, buying in full at market peaks and panic selling at lows; while the latter has a rigorous strategy: using technical analysis, fundamental research, and stop-loss mechanisms to diversify the investment portfolio and maintain emotional neutrality.
IV. Whale Watching and Copy Trading: The Choice of Smart People.
For beginners, in addition to mastering basic strategies, some tools can enhance the win rate. Copy trading allows you to automatically follow the operations of experienced traders, directly borrowing their strategies and knowledge.
At the same time, "whale watching" is also indispensable—by tracking the movements of "whales" holding large amounts of cryptocurrency, one can often gain insights into market trends in advance. Their trading behaviors often indicate price fluctuations, and mastering this information can help you position yourself early.
But remember, do not blindly follow anyone's advice, including the views in this article. Everyone needs to develop a trading system that suits them, as only they understand their risk tolerance and psychological weaknesses best.
V. Conclusion: The bull market is an amplifier for valuable coins, but it is the "makeup remover" for garbage coins.
In this bull market, which is known for its "hellish difficulty," glory and traps coexist. The cryptocurrency circle is never short of opportunities to make money; what it lacks are investors who possess restraint and rationality. Only they can survive in the tide of greed and laugh till the end.
When an earthquake strikes, it's not about who jumps the highest, but about who stands the firmest. The cryptocurrency market is a continuous earthquake, and our goal is not to predict every tremor but to design a structure that can withstand the tremors.
Remember, holding long-term does not mean stubbornly clinging on; value is the core. Truly promising coins will not miss the bull market but will only be "hot potatoes" that are bought high due to news, making it difficult to break even even in a bull market.
In this market, being out of the market is not resting, but the highest level of waiting. When the screen flickers again, ask yourself: Am I seeing an opportunity, or am I just afraid of missing out?
Because in the end, the market rewards those who can control their greed and remain calm, rather than those who try to catch every fluctuation.
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