In the contract trading market, the unchanging iron rule of 'one profit, two break-even, seven losses' means that the vast majority of traders ultimately face liquidation. The root cause is not their lack of technical analysis skills, but rather the initial inversion of the logic between 'profit' and 'survival.' The premise of long-term profitability in contracts is never about how to seize a doubling trend, but rather how to survive through countless market fluctuations. As veteran trader Wang Lu noted, eight years of bull and bear markets have made her deeply understand that the limitations of a one-sided market can destroy any seemingly perfect fundamental analysis. Only by establishing a robust risk defense line can one create the possibility for profit.
The first step in building a survival defense line is to tame the 'double-edged sword' of leverage. Many retail investors pursue short-term profits by recklessly using leverage of more than 10 times, while ignoring the amplifying effect of leverage on risk; when the market fluctuates in the opposite direction by 5%, a 10-fold leverage will directly trigger a liquidation. A rational approach is to adopt a dynamic leverage strategy: using 2-3 times leverage to capture opportunities in the early trend, reducing to 1.5-2 times for steady positions in the mid-term, and then closing positions or defending with low leverage in the late stage. At the same time, it is essential to set a red line for positions, like Wang Lu, strictly controlling the closing position within 70% to leave room for error in case of black swan events or margin hikes.
The key to survival lies in establishing a triple stop-loss mechanism. Technical stop-loss can be set in conjunction with support levels, Bollinger Bands, and other indicators, such as setting the stop-loss 2% below the 20-day moving average; capital stop-loss is the core bottom line, with losses in each trade controlled within 1%-2% of the account capital, where a loss in a 100,000 yuan account should never exceed 2,000 yuan; time stop-loss can help avoid ineffective positions, where if day trading does not reach expected returns within 2 hours, one should actively close the position. More importantly, stop-loss must be 'unity of knowledge and action'; many traders delay stop-loss due to speculative psychology, ultimately turning small losses into large losses, which is precisely the fatal erosion of trading by human weaknesses.
When survival becomes the norm, profit naturally follows. Those who can truly profit in the contract market for a long time understand the need to give up the obsession of 'grabbing all the market movements' and only engage in trades they can comprehend. They realize that the market is never short of opportunities; what is lacking is the ability to survive to wait for those opportunities. From controlling leverage to strict stop-losses, from position management to mental training, every step is aimed at allowing oneself to stay in the market for one more day, and it is precisely these countless 'days' that ultimately accumulate into the miracle of long-term profit through compounding.
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