Sharing some insights with friends who keep taking hits in the crypto world.

I know a guy named Zhang Hao. Two months ago, he only had $3,000, and his account had been liquidated more than 20 times. He was numb. Now? He has over $20,000 in his account and makes a steady profit of about $1,000 a day. This isn’t luck; it’s a method he’s figured out through exploration.

**Leverage is a double-edged sword. Without the right approach, it’s self-harm.**

What did Zhang Hao start doing? Like 99% of people—high leverage chasing hot spots. When Bitcoin surged to $126,000, he went long on the trend; when it dropped to $86,000, he tried to buy the dip, resulting in multiple liquidations. Leverage can double your gains but also double your risks—under 10x leverage, a 10% price move against you can wipe out your principal.

My first hard rule: do not open a position larger than 1% of your account. With $3,000, Zhang Hao invests at most $30 each time. Even with 100x leverage, that’s only a $3,000 position. This way, even if he’s wrong about the direction, the loss won’t be catastrophic.

**Stop-losses must be strict; surviving is the key to turning things around.**

The most common phenomenon in crypto is stubbornly holding on. Zhang Hao once had a long position when Bitcoin broke below support, but he kept adding to lower his average cost, ending up liquidated and losing $2,000. The market never cares where your cost basis is; stop-loss isn’t about being timid—it’s about survival.

Second hard rule: set your stop-loss level in advance and stick to it. When going long, place the stop-loss 2% below support; when shorting, 2% above resistance. Don’t entertain thoughts like “It’ll bounce back if I wait a bit”—liquidation often happens just like that.