Strictly adhering to discipline is the only way to become one of the 5% survivors in the leverage game.
I remember when I first entered the crypto world, I was also that naive investor dreaming of overnight wealth. When I first encountered contract trading, I saw someone say, 'Using 5000 yuan as capital to open 10x leverage to long Bitcoin can turn into 100 times in 7 days,' and I was so excited, as if financial freedom was just within reach.
So what happened? Reality is harsh. I blew up my account twice and paid a lot of tuition.
Later, I gradually realized a truth: the contract market is not a casino. True experts do not have a 100% win rate, but rather use strict discipline to ensure that the money earned exceeds the money lost. With the following five iron rules, I stepped from 3000U to 280,000U.
Rule 1: If you are wrong, cut the loss, never hesitate to fight.
When I first entered the market, I also made the same mistake. Clearly setting a stop loss, but when the price actually falls to that point, I always think, 'Just wait a little longer, maybe it will rebound.' What was the result? Liquidation.
Stop loss is not about cutting losses, but about using a 10% loss to protect 90% of the principal. The market will never show mercy to those who take chances. When Bitcoin crashed 30% in 2024, users who set a 10% stop loss only lost 10% of their principal, while those who did not set a stop loss went directly to zero.
My principle is simple: as long as the price hits the stop loss point, I leave immediately without hesitation. Accepting a loss is not scary; what is scary is losing the entire battle because of one unwillingness to accept a loss.
Rule 2: If you make five mistakes in a row, take a mandatory break.
In the crypto world, you will find that sometimes no matter what you do, it's wrong, like entering a death loop. At this time, stubbornly holding on is just throwing money away.
There was a day when after making three wrong trades in a row, I lost my composure, started trading frequently, and ended up tripling my losses that day. Since then, I have set a 'circuit breaker' for myself: as soon as I make five consecutive wrong judgments, I immediately turn off the computer and take a break.
Data shows that the median survival time of accounts with high leverage (≥20 times) is only 6 hours. When the market is chaotic, stepping back to cool down often helps avoid greater losses. The next day, the market often regains clarity.
Rule 3: Profits must be withdrawn, securing the gains.
The numbers in the account are all virtual; only the money in the wallet is real. I have seen too many people with substantial profits on paper, only to lose everything in a single liquidation.
My rule is: for every 3000 U earned, at least half must be withdrawn. This has two benefits: one is to truly lock in profits, and the other is to force myself to control my position, so I won't lose everything due to a single mistake.
Many people are greedy, thinking 'holding on can earn compound interest,' but the volatility in the crypto world is too great. After Bitcoin broke $100,000 at the end of January 2025, it suddenly fell sharply, with a single day's liquidation amount reaching $2.3 billion, affecting over 300,000 people.
Rule 4: Only trade trends, avoid fluctuations.
There is an old saying in the crypto world: 'The trend is your friend.' In a one-sided trend, high leverage is like a rocket booster; in a fluctuating market, it is a meat grinder that harvests funds.
70% of the time the market is fluctuating, frequent trading will definitely lead to losses. My strategy is: when there is no clear direction, it's better to play dead and wait for the trend to become clear before striking.
How to judge the trend? I mainly look at the relationship between the 50-day moving average and the 100-day moving average. When the 50-day moving average crosses above the 100-day moving average (golden cross), I am bullish; when it crosses below (death cross), I am bearish. I only act decisively when the trend is clear.
Rule 5: Position control is the key to survival.
This is also the most important rule. Don't think about going all in; to win, you must first survive.
My trading method is very extreme: I split one hand of 300 U into ten parts, taking only 30 U with 100 times leverage each time. If the direction is right, one point can double; if wrong, this amount goes directly to zero. Although it seems highly risky, the loss in a single trade is completely controllable.
Data shows that 72% of liquidated accounts used leverage of more than 10 times, while only 3% of investors with less than 5 times leverage were liquidated. My iron rule for myself is: position should not exceed 10% of the principal. A lighter position allows for a steady mindset and calmer operations.
Written at the end.
Crypto contracts are like a leveraged marathon; those who run fast may fall midway, while those who run steadily can laugh to the end. In 2025, as market volatility increases, a single crash could obliterate $19 billion, forcing liquidation of 1.6 million trading accounts.
The true masters of the crypto world are not those who post single instances of huge profits, but those who can survive in this market for three, five, or even longer years. When you open your trading software to increase leverage, remember: every opportunity the market gives you has a hidden price.
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