At three in the morning, a brother in Fujian watched his 6000 yuan account go to zero overnight. He invested all 5800 yuan without a stop-loss, which was the core reason for his liquidation.
Clarification of Misunderstanding: The real risk lies in position size, not leverage.
Many people mistakenly believe that high leverage equals high risk. In reality, position management is the key to survival. Take an account of 800 yuan as an example:
· If 750 yuan is invested at 5x leverage, a 6% adverse market movement will lead to liquidation.
· If only 75 yuan is invested at 5x leverage, a movement of 86.7% against the position would be needed to harm the principal.
The same leverage can result in over 12 times the difference in risk tolerance based on position size. The young brother at the beginning invested 96.7% of his principal, and under 5x leverage, a 3% fluctuation was enough to be fatal. This was not bad luck, but rather the predetermined outcome from the moment he went all in.
Three Iron Rules for Survival: Protect Your Principal
I have learned these three iron rules through painful lessons, which help the account grow steadily:
1. Single investment ≤ 7% of total capital: For a 6000 yuan account, the maximum single investment is 420 yuan. Even with a stop-loss, the loss is negligible.
2. Single loss ≤ 1.1%: Taking 420 yuan at 5x leverage as an example, set a 1% stop-loss; a loss of 8.4 yuan means decisively exiting. A stop-loss is a safety valve, not a sign of defeat.
3. In uncertain markets, do not act: Avoid participating in ambiguous fluctuations. Patiently wait for clear breakthroughs on daily charts and opportunities where both price and volume are rising.
A fan from Shenzhen used to face monthly liquidations, but after adopting this method, he increased his account from 3200 yuan to 55000 yuan in four months. He said: "I used to think going all in was seizing an opportunity, now I understand that surviving steadily is the way to have a future."
The crypto market is not short of wealth myths, but silent zeroing out is the norm. Those who can survive and profit in the long term are not the most daring gamblers, but the ones who understand risk control the best. Remember: steady and gradual progress, survival first.
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