experienciapersonal

Imagine you think BTC is going to rise. You open a long. The price goes up by 5%, but your account ends up dropping by 40%. Does that sound familiar? It's not as unusual as it seems.
After several years of operating and reviewing cases shared by traders in forums and social networks, I have noticed a pattern: it's not just about getting the direction right. There are other factors that greatly influence the final outcome.
Observation 1: Leverage can work against you
I have seen cases where someone with 1,000 USD in their account opens a long with 10x leverage. If BTC rises by 2%, they might think they made 200 USD on paper. But if they put a very large part of their capital in a single trade, a simple 5% pullback (something normal in the market) can cause the exchange to close their position before the price resumes its rise. The analysis didn't fail; the margin management did.

I've seen a lot of traders use stop loss, but not everyone gets the same results. Some set them so close that the market noise takes them out early. Others leave them so far that a single trade can impact a significant portion of their account.
Over time, I've tried different approaches. What works best for me is not setting the stop at an arbitrary round number, but rather observing the actual behavior of the market.
What I used to do before
At first, I would set my stop at a fixed percentage, like -2% from my entry, regardless of the market's volatility at the time. The issue was that, on normal days, the price would move that 2% just from simple noise and would take me out of trades that later went in my direction.