Many traders only realize after experiencing one or two big losses that—without a stop-loss in place—trading contracts essentially means giving free money to the market.

Why do most contract traders end up with zero? It seems like the market moved against them, but the real issue is the absence of that critical stop-loss line. Recently, a fan forgot to set a stop-loss and directly blew up their account. Taking this opportunity, I want to share the complete stop-loss experience I’ve accumulated over the years, earned with real money.

I’ve seen too many people go from ten thousand to a hundred thousand, only to be wiped out by a single stubborn position. I’ve also suffered my own losses: in March 2023, I shorted BTC at 28,000, thinking it was just a correction, but the price surged to 35,000, and my account was blown up. In January 2024, I chased SOL at 120, but a sudden spike dropped it to 98, ending the same way—completely wiped out.

These painful lessons taught me two hard truths: holding a position might sometimes keep you alive, but eventually, it will take your life. The root cause of every liquidation event is always that phrase “wait a bit longer.” What can truly save you is not a high win rate, but decisively cutting losses when it’s time.

Now, I follow a three-tier stop-loss strategy:

**First Tier: Beginner Survival Rule.** Set a stop-loss the moment you open a position, calculated as the inverse of your leverage. For example, with 20x leverage, set the stop-loss at 5%; for a 10,000 USDT position, the maximum loss is 500 USDT. Learn how to avoid being wiped out in one go before thinking about how to make money.

**Second Tier: Dynamic Stop-Loss.** Don’t treat unrealized gains lightly; use them to set your defensive line. When your unrealized profit hits 5%, move your stop-loss to your cost basis; at 10%, lock in 5% profit; at 20%, aim to preserve at least 15%. It’s like saving your game progress—each step forward, save; so a mistake doesn’t wipe everything out.

**Third Tier: Emotional Stop-Loss.** This is the most easily overlooked but most damaging. After three consecutive losses, force close the software and walk away from the screen; after making profits, immediately withdraw some of the gains when you’re excited. Many decisions driven by emotion end up leading to bigger losses.

Stop-loss isn’t losing; it’s a tactical retreat. A seasoned trader isn’t someone who never gets liquidated, but someone who can survive after being liquidated and stay in the game, waiting for the next opportunity.

The crypto market never lacks opportunities, but the prerequisite is—you must still have capital to participate in the next round.