Treading on the edge of a knife, nine out of ten bets lose.
Last week, a fan excitedly approached me, saying he used the 50,000 he saved from graduation to enter the contract market and turned it into 120,000 in three days, his mind full of quitting his job to trade cryptocurrencies full-time. I just replied with three words: 'Stop it quickly.'
After eight years of struggling in the cryptocurrency market, I helped those around me turn an initial investment of 30,000 into 40 million before completely exiting. I've seen too many of these 'lucky ones'. To speak a harsh truth: contracts are never a shortcut to wealth for ordinary people; they are a sieve, filtering out those who think they can win by luck.
I survived not because the market was kind to me, but because of five iron rules forged with real money.
01 The cruel truth of the contract market.
Do you remember that night in May 2021 when Bitcoin plummeted nearly 13% in a single day? Countless contract players were liquidated in their sleep. There was a young man named Li Xin who had just graduated three years ago and was new to the cryptocurrency world. Encouraged by friends, he tried contract trading.
He initially operated cautiously, using 20x leverage on low-quality coins, making 14.67% in ten seconds. Excited, he raised the leverage to 50x, once again profiting 27.86%. This illusion of quick profits led him deeper into the abyss, and the next day he woke up to find his account completely at zero.
Such stories are being replayed every day. Sometimes in a single day, more than 138,000 people are liquidated, and 7.6 billion yuan disappears into thin air. And this August, Bitcoin fell below $60,000 again, with 78,000 people liquidated within 24 hours, amounting to as much as $198 million.
Contract trading is essentially a gambling game, and the house always wins. Exchanges not only earn huge fees from this, but also cause trading to suddenly halt during market fluctuations through means like 'unplugging the internet', preventing investors from closing their positions in time.
02 My five survival rules.
My trading model back then seemed crazy—splitting the initial capital into ten parts, using only one-tenth at a time for high leverage. If I was right, I would take the profit; if wrong, I would admit defeat directly. This seemingly extreme approach can avoid liquidation, relying on a few rules as a safety net.
First, stop losses must be more decisive than bargain hunting.
When I first entered the market, I also made the rookie mistake of always thinking the market would reverse. Once, having clearly reached the preset stop loss line, I stubbornly thought 'just wait a bit longer', only to watch my position get forcibly liquidated, losing half a month’s profit in a day.
Later, I set strict rules for myself: as soon as the stop loss point is hit, no matter how unwilling I feel, my finger must be faster than my brain, and I must leave immediately. In the contract market, there is only one outcome for 'playing dead'—being completely eliminated by the market. Accepting a 10% loss is always better than losing 100%.
Second, close the computer after five consecutive wrong trades.
Have you ever had this experience? One day, you suddenly lose your touch, buying up when it goes down and buying down when it goes up, and the more you lose, the more you want to recover, until you get deeper and deeper. I call this the 'chaotic period of the market'; during this time, stubbornness is just giving away money.
I once made seven wrong trades in a single day, losing 1.5 million from the 2 million I had earned previously. Later, I set up a 'self-cut mechanism': as long as I made five consecutive wrong trades, regardless of how much time was left that day, I would immediately close the software and unplug the internet. It turned out that in 90% of cases, the market would become clear the next day.
Third, account numbers are virtual; securing profits is real.
Many people stare at the floating profits in their accounts, grinning foolishly, thinking that rising numbers mean profits—too naive. I’ve seen too many people go from floating profits of millions to ultimately losing their capital, all because of greed, always thinking 'just a little more before withdrawing'.
My approach back then was clumsy but effective: every time I reached a milestone profit target, I would immediately withdraw half to a safe account. Don’t think it’s a hassle, and don’t feel it 'affects compound interest'. In this market, being able to transfer money to your own bank account is the real victory.
Fourth, only do 'smooth sailing', avoid 'chaotic whirlpools'.
High leverage is like a knife; if used correctly, it’s a sharp tool; if used incorrectly, it’s self-harm. When to use it correctly? During a one-sided trend. When the market is clearly moving up or down, high leverage can help enlarge your profits; but if you enter a volatile period, with candlesticks jumping up and down like an ECG, entering with high leverage is no different from sticking your head into a meat grinder.
The phrase I often have on my lips: Only those who observe closely are the experts. When the direction is unclear, it's better to sit and drink milk tea than to reach in and enter the market.
Fifth, never put all your eggs in one basket.
The most fatal mistake new traders easily make: going all in. Thinking 'this time it’s definitely stable', they throw all their capital in, only to panic when a small fluctuation occurs, leading to disorderly operations and liquidation.
The rule I’ve never broken over the years: never exceed 10% of your capital in a single position. No matter how certain the market seems, only invest one-tenth. The benefit of a light position is that even if wrong, you won’t feel devastated and can maintain a calm judgment for the next opportunity. In the contract market, mindset is 100 times more important than skill.
03 Don’t let yourself become a lamb to be slaughtered.
In addition to the risks inherent in the market itself, contract players also face various hidden traps. Some small exchanges collude with signal teachers to exploit novices by manipulating prices and causing targeted liquidations.
What’s worse is that when you want to withdraw your profits, the platform will refuse to let you withdraw for various reasons until you are completely wiped out. These are the 'hidden corners' of the contract market, which new players are unprepared for.
Even technical failures on trading platforms can leave you with nothing. During stark market volatility, exchange servers often crash, and at that moment, you can’t do anything, only watch helplessly as your position gets liquidated.
04 Staying alive is more important than anything.
Now I have completely stopped trading contracts, not because I've made enough, but because I've seen through it—this has never been a war of attrition, but a 'life-saving battle'. Every day in the market, there are tales of sudden wealth, but more often, retail investors quietly disappear.
If you really can't resist entering the market, first engrave the above five rules in your mind; if you think you might forget them or are afraid of stepping into pits, follow me. I share market analysis and pitfall avoidance tips daily.
In this market, staying alive is more important than anything. Next time, let’s talk about something more practical—what cryptocurrency investment methods can ordinary people actually engage in.
Follow Xiang Ge, and let him guide you to understand more first-hand news and precise points in the cryptocurrency world, becoming your navigation in the crypto space. Learning is your greatest wealth!#加密市场观察 #巨鲸动向 $ETH
