On December 1st, in the early morning, Xiao Zhou from Chengdu sent dozens of voice messages to the trading group, trembling in his voice: "Investing 10,000 U in long ETH, dropped 3 points, and the margin was directly wiped out!"

The settlement slip posted in the group showed that he not only entered the market with a full position but also did not set a stop-loss, just hitting the 6.36% intraday drop of ETH.

That day, Coinglass data exploded on the screen: over 270,000 people were liquidated in 24 hours, and $985 million vanished into thin air.

Many people criticized the leverage as too harsh, but the root cause of the liquidation is actually the position ratio.

With the same 20x leverage, if you have 1,000 U as principal and use 900 U to open a position, a 5% reverse fluctuation will trigger a forced liquidation; however, if you only invest 100 U, it would need to drop 50% to be liquidated.

I have seen too many retail investors getting liquidated month after month and summarized three points:

Firstly, a single position should not exceed 20%, for a 10,000 U account, the maximum investment in one go is 2,000 U; even if you set a stop-loss at 10%, you would only lose 200 U, which does not harm the foundation;

Secondly, single losses should anchor at 3% of the total position; if you open a position with 2,000 U at 10x leverage, setting a 1.5% stop-loss line just uses up the safety cushion;

Thirdly, in a volatile market, control your hands, only do trend breakthroughs, and never chase positions for profit.

A fan of mine used to get liquidated every month, but after following this method for three months, his 5,000 U account stabilized to 8,000 U.

He said he used to treat the entire position as a gambling table, but now he understands this is the margin of error.

I always feel that the crypto world is not about who rushes faster, but about who survives longer.

In December, during a market where Bitcoin dropped nearly 30% in a month, betting less on direction and controlling positions more, slow is the fastest way to profit.

Follow me for practical techniques that can be implemented, see you in the Binance chat room.