Perpetual contracts are like a double-edged sword. Leverage can quickly amplify gains on small accounts, but it can also wipe out your capital in an instant. Here's a shocking statistic: over 90% of contract traders end up liquidated due to risk mismanagement. This is not alarmist talk, but the harsh reality of the market.

To survive in this game for the long term, you need to build a three-layer defense system. First is position management, which is fundamental to life and death. The principle is simple—never risk more than 5% of your total account on a single trade. For example: if you have $10,000, the maximum amount for one trade is $500. It sounds conservative, but this is the price of staying alive.

Add positions gradually. Don't throw everything into one direction all at once. The correct approach is pyramid-style entry: invest 30% of your position initially, then add another 20% when the price moves 3% in your favor. This way, you can participate in the trend without risking a complete wipeout due to a single misjudgment. Also, set a daily loss limit—usually 10% of your account—and once reached, forcefully exit the market. Never let emotions shake this line.

Next is the stop-loss strategy. It should be based on two factors: technical analysis and volatility. Place your stop-loss outside key support or resistance levels. For example, if Bitcoin drops below the 4-hour MA60, you should exit decisively. Incorporating the ATR indicator (Average True Range) is more scientific—set your stop-loss at 2 times the ATR value. This helps avoid being stopped out by daily fluctuations. After realizing profits, don’t be greedy; when profits exceed 20%, move your stop-loss to the breakeven point. This is called a trailing stop, a key move to protect your gains.

Leverage should match your capital size and risk tolerance. Large accounts (over 50,000 USDT) can consider 2 to 5x leverage. Small accounts should never use more than 10x. Why? Because Bitcoin’s daily volatility is usually 5-8%. Using 10x leverage means a 10% adverse move will liquidate your position immediately. But with 3x leverage, a 33% move is needed for liquidation—this is a risk at a completely different level.

Finally— the ultimate goal of risk management is to stay alive. Whenever there are extreme events like Federal Reserve rate decisions or major policy announcements, reduce leverage in advance, close positions if necessary. Don’t rely on luck or gambling mentality to take a shot; that will quickly get you out of the game.