2025-12-30 03:23:10

Having been involved in contract trading for nearly eight years, my biggest takeaway is: those who can survive and make money treat risk control seriously. Stories of overnight riches do exist, but there are always more people wiped out than those who profit.

I've seen too many people jump in and play with 100x leverage, eyes sparkling with dreams of "easy profits," only to have their accounts wiped out much faster than they imagined. It's not bad luck; frankly, they just don't understand the relationship between risk and leverage.

Let's start with a reality: liquidation is essentially one thing—market changes too quickly, you don't have time to add margin, and the system forcibly closes your position, directly losing your principal.

So how to avoid it? It's actually not that complicated.

**Regarding leverage, most people misunderstand it**

Leverage is not a monster; the real danger isn't the multiple, but how much money you're risking. 100x leverage sounds terrifying, but if you only use 1% of your total funds for this trade, the actual risk is even lower than buying spot with all your money. The core logic is simple: real risk = leverage multiple × proportion of your capital used.

Many people come in still thinking like stock traders, or even treat it as gambling. This mindset, combined with unfamiliarity with futures contracts, results in only one outcome: zeroing out.

**Stop-loss is insurance for your account**

Stop-loss is the lifeline of trading. Those who survive big market drops do so not because of luck, but because they are willing to cut losses. Missing a wrong move and losing 5% is always better than risking losing your entire principal in the end.

Many people think, "Just wait, it will come back," but end up waiting until forced liquidation. Ultimately, this is a failure of risk management.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

12 Likes

Reward
12
5
Repost
Share

Comment

0/400

GasFeeCrier

· 13h ago

Eight years of career summary is on point, but I’ve still seen many veterans also blow up. Risk control may sound simple, but when it comes to critical moments, the mentality collapses. Everything in this article is correct, but 99% of people will still continue to play with 100x leverage after reading it. Human nature is like that; greed causes the brain to go offline. The part about stop-loss insurance is well explained, but the problem is how many people are really willing to cut losses? I’ve seen too many people just wait for that one moment, then go to zero. The core still comes down to position management. How many truly understand the risk coefficient formula? Most still gamble more than they think rational. All valid points, but this article is actually useless for beginners. They just want to get rich overnight and won’t listen.

View OriginalReply0

GasGasGasBro

· 13h ago

Eight years of experience really hits hard, but I think what's more difficult than stop-loss is the mindset. Watching multiple times that a 5% loss is acceptable is useless; when it comes to critical moments, it's still hard to cut losses. --- 100x leverage is basically gambler's psychology—forcing yourself to feel like you're playing big, but one pinprick and it's gone. --- Risk control is something we hear about every day, but how many can actually implement it? Most people are still hoping to multiply their money tenfold, only to end up with a negative return. --- The most heartbreaking thing isn't liquidation, but having the opportunity to cut losses before liquidation and not doing it. That's the real test of human nature. --- Exactly, contract trading exposes all greed and fear. The ones making money are the ones who are cold-blooded enough to do so. --- I've now figured out position management—strictly controlling it to a certain percentage of total funds. No matter how tempting the market, it can't exceed that. Otherwise, a crash is inevitable. --- Wait, can anyone really stick to stop-loss? Or are they just talking, and in the end, it's still about luck?

View OriginalReply0

PensionDestroyer

· 13h ago

Eight years of experience honestly, risk control is really a matter of life and death, there's nothing much to say. Wait, but I always feel something's off about the logic of using 1% position with 100x leverage. It's correct to talk about stop-loss, but when the market is crazy, who would be willing to do it? I've seen very strict position management before, but it ended up shaking me out; sometimes you have to risk a little to survive. This article sounds right, but I always feel like something's missing. Are all profitable people really this rational, or is it just survivor bias?

View OriginalReply0

PumpBeforeRug

· 13h ago

An eight-year veteran says it right: being in this industry is what makes you a winner. Those dreaming of getting rich overnight have already quit. Really, I've seen too many people gamble everything with 100x leverage and end up losing it all, not even knowing what they're doing. Stop-loss is easy to say, but very few are willing to actually cut their losses. Most keep thinking to wait a bit longer... and end up losing everything.

View OriginalReply0

FlashLoanLord

· 13h ago

Eight-year veteran Maizi is right. I've seen too many people with red eyes, only to be wiped out within a week. It's no joke. --- It's all about mindset. Even though I know stop-loss is very important, I still find it hard to press the button. I've been through that... --- I agree with the logic of 1% position size with 100x leverage. The risk isn't really high, it's just human nature to worry. --- Oh, I saw someone asking me how I survived in the crypto world, so I just send them this article. No other secret. --- The speed of liquidation is truly incredible. I was dreaming about it yesterday, and today the account is gone. I've seen too many brothers like this. --- Hey, talking about stop-loss is easy, but actually executing it is another story. It's a mindset issue. --- People dreaming of making a fortune with one trade probably haven't seen themselves being forced to liquidate. They wake up fast. --- Risk = Leverage × Position Size. This formula should be engraved in your mind. Many people get wiped out because they didn't calculate it clearly. --- Honestly, futures trading is like gambling. The difference is how much money you bet and how long you gamble. --- Adding margin? Haha, most people can't even react in time. The system has already forced liquidation for you.

View OriginalReply0