Recently, I’ve been studying contract trading and found that the fundamental reason many people lose money is that their position management isn’t done well. In fact, as long as you get through position management, ordinary people really do have a pretty good chance to turn things around in the crypto market.

First, the most basic—capital allocation. Based on my experience, you should never put in more than 10% of your total funds into the market each time. For example, if your account has 10,000 US dollars, then your entry for a single trade is 1,000 US dollars. Whether you’re going long or going short, this is the rule. The benefit is that even if you lose a few trades in a row, you won’t be wiped out. Many people go all in or take an oversized position right from the start, and then one wave against them and they get liquidated—there’s no chance to recover.

The core of position management is to have flexibility. Suppose your margin is in the 5-10% range (that is, 500-1,000 US dollars). You can split it into 2-3 entries at different price levels. This way, you can both control risk and gradually build your position. I usually do it like this: the first trade is 10 lots, the second trade is 20 lots, and the third trade is 30 lots—so the position ratio is 1:2:3, and the total position combined should not exceed one-tenth of your total position.

When adding to positions, you also need to do it thoughtfully. If you use the same leverage, then you just adjust the position size; if you want to increase the speed of your returns, you can add leverage on the later trades. For example, the first trade uses 20x, the second uses 50x, and the third uses 100x, but you should do at most three trades—only then can you timely catch up or take profit when the market fluctuates quickly.

Leverage selection depends on the market’s “temper.” When the big trend is clear, use small leverage for long-term positions, which gives you strong risk resistance. If the market is moving fast and opportunities are fleeting, use high leverage for quick entry and quick exit. In general, once you reach 30-50% profit, you should take profit. When the market changes too fast, we need to learn to respect it and know when to stop—don’t be greedy.

Finally, one reminder: the crypto market is full of uncertainty, and opportunities and risks often coexist. If you’re trading contracts, you must fully understand the risks, stay calm and rational, and use a solid position management strategy to respond to market changes. This is the key to surviving long-term in the crypto market.