After experiencing a liquidation once, I finally understood a harsh truth: those who don't cut losses are essentially working for the market manipulators, continuously sending money into their accounts.

Look around, out of ten people trading derivatives, all ten say they ended up losing everything in the end. Some blame the market, others complain about luck, but the real reason is often cruel — they simply don't have a stop-loss string.

A few days ago, a fan came to me crying, saying he was liquidated overnight and his account was wiped out. I looked at his position records, and unsurprisingly, he didn't set a single stop-loss order. Since that's the case, I want to share with everyone the pitfalls I've stepped into and the lessons I've learned over the years.

## My Two Blood and Tears Lessons

During the March 2023 wave, BTC surged from 28,000 to 31,000. I was very confident at the time, using 5x leverage to short, thinking it was just a correction, a buying opportunity at the bottom. But what happened? Each candlestick slapped me in the face, and BTC stubbornly rose to 35,000, wiping out my account completely.

By January 2024, I made the same mistake again. SOL broke above 120, and I was so excited looking at the chart that I chased long with 10x leverage. Who knew a sudden dip would crash from 120 straight down to 98, and my account was wiped out again.

These two experiences made me realize a principle:

**Try to hold on once, maybe luck is on your side and you survive. But try ten times, and one of those will definitely kill you.**

All liquidation stories start the same way — "Just hold on a bit longer, it will come back." But reality is ruthless; no "hold on a bit longer" can truly turn things around.

## It's not the win rate that decides life or death, but the stop-loss

My current stop-loss system has been optimized to be very effective. The logic isn't complicated, but it works:

**First Trick: Beginner's Life-Saving Rule**

When opening a position, don’t think about making money first. Think about surviving. The first thing you must do is set a stop-loss.

How to set it? Simple and straightforward — the stop-loss distance equals the inverse of the leverage.

For example, with 20x leverage, the stop-loss is 5%. For a 10,000 USD position, the maximum loss is 500 USD. What's the benefit? The risk of a total liquidation is completely locked in. Your goal isn't to gamble everything on a single shot to turn around, but to stay alive through each trade.

**Second Trick: Dynamic Stop-Loss (This is the core)**

Floating profits are not for dreaming; they are for protecting your position.

If you make a 5% profit, move your stop-loss up to the breakeven point, eliminating risk.

If it rises to 10%, lock the stop-loss at 5% profit, so even if it falls back, you won't lose.

If it reaches 20%, at least secure 15% profit with your stop-loss.

Markets are alive and can retrace, but your profits shouldn't be wasted. It's like saving your game in a video game — save at safe points to ensure you don't lose everything in one go.

**Third Trick: Emotional Stop-Loss (The deadliest one)**

This is rarely mentioned but most powerful.

If you lose three trades in a row? Close the software and take a break. Your mind is already overwhelmed.

Conversely, if you're making money, celebrate briefly and withdraw half. Don't be greedy; preserve your principal.

Trading in this state is basically gambling. No trade is a rational decision.

## Practical Case Breakdown

During the ETH market in May 2024, I used this system:

Bought long at 3600 USD with 20x leverage, initial stop-loss at 3520, risk controlled within 2% of the account. Even if the stop-loss was triggered, I wouldn't be wiped out.

When ETH rose to 3700, I moved the stop-loss up to lock in profits. At that point, floating profit was stable, with support below.

The market surged to 4100, and I took partial profits along the way. In the end, this trade yielded a handsome profit.

What was the key? The maximum risk was always kept within 2%, but the profit was fully preserved. That’s the correct way to operate derivatives.

## The Heartfelt Final Word

Stop-loss is never about giving up. It’s a tactical retreat.

Opportunities in the crypto world are plentiful; the next market wave, the next cycle, is always waiting for you. But what’s the prerequisite? You have to survive until then. As long as your principal remains, there’s always a chance to turn things around. Those who have wiped out their accounts have lost not just money, but also the right to participate in the next opportunity.