Three years, three times hitting zero, finally relying on a strategy to turn things around.
I still remember that afternoon when my phone vibrated, and another liquidation message came in. The balance on the screen turned into three digits for the Nth time. Starting with 6000 yuan, I repeatedly went through the cycle of 'recharging - liquidation - recharging' over the past three years, feeling like the greenest leek in the crypto world.
At that time, all I could think about was turning things around overnight, but in the end, it was just about continuously pouring in money. Leverage was increased from 10 times to 100 times, frequent trading, staying up late to monitor the market, I didn’t miss a single pitfall.
It wasn't until I fully understood the combination of the KDJ indicator and the 20-day moving average that I truly turned the situation around. Today, I want to talk about how ordinary people can survive in the contract market and even make money.
High leverage is a trap, not a springboard.
My first liquidation was in 2022, when Bitcoin was consolidating. I used 10x leverage, thinking it should be safe with low volatility. But after a sudden drop, I exited. Unwilling to accept that, I deposited again, this time increasing the leverage to 20x, and got the same result.
Leverage, on the surface, can amplify returns, but in reality, it is a risk amplifier. 10x leverage means that a 1% price reversal results in a 10% loss; a 10% fluctuation wipes out the capital. The higher the leverage, the lower the margin for error. This is why beginners should never touch leverage above 5x.
What’s even scarier is that many people overlook transaction fees and spreads. If you trade frequently, just the transaction fees can eat up a large portion of your capital. Trading dozens of times a month, the fees may exceed the final gains.
My core weapon for turning the tide: KDJ + 20-day moving average.
After my third liquidation, I paused to reflect. I realized I had been 'betting on direction' instead of 'trading.' So I began studying technical indicators and eventually found a combination suitable for ordinary people: KDJ indicator and the 20-day moving average.
The KDJ indicator is like a thermometer for the market, measuring whether prices are 'overheated' or 'overcooled.' When the K and D values are below 20, the market is in an oversold state and may rebound; when they are above 80, the market is overbought and may correct.
However, relying solely on KDJ can lead to many false signals. Therefore, I combined it with the 20-day moving average as a trend filter. I only consider going long when the price is above the 20-day moving average and KDJ forms a golden cross at a low level (the K line crosses above the D line); the opposite is true for shorting.
The logic behind this approach is: KDJ provides me with short-term buy and sell signals, while the 20-day moving average helps me judge the direction of the major trend. Combining the two allows me to seize entry opportunities while ensuring I do not operate against the trend.
My practical strategy: specific operations to multiply 25 times in two months.
To be honest, any strategy requires discipline for execution. My previous failures were not due to not understanding the indicators, but because I couldn't control my hands.
Later, I set three iron rules:
Never chase highs: I will not short when KDJ is high (above 80) without a dead cross; I will not go long when it's low (below 20) without a golden cross.
Do not over-invest: each position should not exceed 10% of total capital, leaving yourself enough room for buffer.
Trade infrequently: No more than 3 trades a day, stop when I've made 20%, rest when I've lost 10%.
In terms of specific operations, I mainly wait for two types of signals:
The first type is a trend activation signal: When the price breaks above the 20-day moving average and KDJ forms a golden cross near 50, it indicates that the trend may be starting. At this point, I will enter with a light position and set a stop loss of 1.5%.
The second type is a signal that a pullback has ended: In an upward trend, when the price pulls back to the 20-day moving average for support, and KDJ forms a golden cross at a low level, it indicates that the pullback may be ending. This is a good entry point.
The most important thing is not to enter but to exit. I adhere to the principle of small losses and big gains: set stop-loss at 1.5%, but aim for profit targets of at least over 5%. This way, even with just a 50% win rate, you can be profitable in the long run.
Surviving is more important than anything else.
The cruelest part of the contract market is that after losing 90%, you need to multiply your capital by 9 to break even. This is too difficult. Therefore, protecting your capital is always the top priority.
Now, I only spend a little time each day watching the charts; most of my time is spent learning and reviewing. The money in the crypto world is endless, but your capital may run out.
If beginners really want to try their hand at contracts, I have a few suggestions:
First, practice with a demo account for at least 1 month, achieving stable profits before trading real money. Use only money you can afford to lose, not exceeding 10% of total capital. Choose large platforms and avoid those small exchanges that may 'spike.' Keep a record of every trade and review regularly.
The final piece of heartfelt advice.
Contract trading is not an ATM but a battlefield for cognitive realization. I used to think high leverage could help me make a comeback but almost got completely washed out.
Real transformation comes from cognitive improvement and disciplined execution. When you have a system, trading is no longer about betting on size, but a probability game. You take small risks for big rewards, and by persisting in the long term, you can become one of the 10% who are profitable.
If you are also struggling in the liquidation cycle, consider stopping to learn first before trading. Remember: surviving gives you the chance to catch the next surge.
There are always opportunities in the market, but your capital is limited. Follow A Ke for more firsthand information and accurate insights about the crypto world, becoming your navigation in this space; learning is your greatest wealth!
