I understand the taste of liquidation - the numbers on the screen turn from green to red, and my heart plummets alongside the K-line, ultimately leaving my account at zero, with only a cold sweat in my palms. You might still be reviewing: 'If I had just held on a bit longer, would it have come back now?'
But the truth is, the market specializes in various forms of 'disobedience'. It never gives you advance notice of which pullback is going to be catastrophic; it only tells you with bloody bills: those who do not set stop-losses will ultimately be taken away by any ordinary pullback.
1. The market goes crazy without rules, and stop-loss is your only 'bulletproof vest'.
Trading is not about risking your life, but about gambling on probabilities. No matter how accurate your analysis is, a sudden policy change or a big whale dumping can instantly reverse the market.
For example, in the October crash, Bitcoin plummeted 8% in 30 minutes, with 1.6 million people liquidated for 19.2 billion. But a whale had set a short position in advance and made 30 million dollars in 20 hours — they relied not on prediction, but on rules.
The essence of stop-loss is admitting 'I could be wrong'. It's like buckling your seatbelt while driving, not cursing yourself to have an accident, but preventing a single mishap from leading to a complete exit.
Second, the three layers of stop-loss training: capital preservation, practicing the mind, improving efficiency.
Capital preservation: Losses should be understood
Fixed stop-loss: Control single trade losses within 2%-5% of the principal. Even if you make 10 consecutive mistakes, your account will only shrink by 18%, but if you are deeply trapped at 50%, you need to make 100% to break even.
Technical stop-loss: If it breaks key support levels (such as moving averages, previous lows), decisively exit, don't fight against the trend.
Practice the mind: Bind the heart demon with rules
During floating losses, human nature always wants to 'wait a bit longer', leading to small losses turning into forced selling. Setting a stop-loss point in advance draws a disciplinary red line for yourself, cutting off the retreat of wishful thinking.
Improve efficiency: Reduce internal friction, focus on opportunities
No longer agonizing over 'whether to run' during the trading session, you only need to judge whether the trend is still there. The simpler the trading, the more stable the mindset.
Third, those who do not set stop-losses ultimately lose to 'this time is different'.
I have seen too many tragedies:
Altcoins rose to 1.7 million dollars without taking profits, and the project team ran away, causing the coin price to drop to zero;
Opening leveraged positions for high returns, fantasizing about recouping losses during a rebound, ultimately leads to liquidation and debt.
They didn't die from a specific crash, but from the habit of being 'defenseless'. The market is like a crocodile pool: when bitten on the leg, a broken leg can survive, but struggling will only lead to being swallowed whole.
Fourth, stop-loss is a badge of professionals, not a label for cowards.
A truly mature trader does not buy at the lowest point or sell at the highest point every time, but decisively cuts losses when wrong, preserving the chips for a comeback.
Capital is bullets, the market is a battlefield. Surviving allows you to wait for the next bull market.
Setting a stop-loss is not admitting failure, but proving that you are clear-headed enough to refuse to gamble on luck for tomorrow.
If you are still in the shadow of liquidation, remember:
The stumble today is to avoid falling into the same pit tomorrow. First, engrave the stop-loss into your DNA, then talk about making money — the market always rewards those who respect the rules and punishes blindly confident gamblers.
Follow Xiang Ge, and let him guide you to understand more firsthand information and precise knowledge about the cryptocurrency circle, becoming your navigation in the crypto world; learning is your greatest wealth!
