#加密市场下跌15万人爆仓 Why do you always get wiped out with heavy positions? Here's the lesson I learned from investing 30k yuan.

The previous article talked about how to defend yourself with tools; today, let's discuss a more painful topic: position sizing.

I've blown up my account before. Not just once. After reviewing, I found that only about 30% of each zeroing out was due to technical reasons, while the remaining 70% was all about position management.

I summarized three ways I’ve died in trading, and how I changed afterward. Not all of them are perfect, but every one is earned with real money.

First way of dying: Going all-in with full position
Seeing someone in the group shouting about a hundredfold password, I impulsively went all-in. Winning made me feel like a god; losing meant I went back to zero. I once turned 3,000 yuan into 30k yuan, then gave it all back to the market in one day. It wasn’t the market that killed me; I handed my life over to luck. Going all-in is basically betting your life; if you win, you'll keep betting until you lose everything.

Second way of dying: Adding to losing positions
Falling in price and feeling stubborn, I thought I could buy a little more to lower the average cost. The more it fell, the more I bought; the more I bought, the heavier the position became, until I was stuck in a trash position with no way out. This isn’t strategy; it’s throwing a tantrum. The market doesn’t care about your cost; it only cares if your margin is enough.

Third way of dying: No stop-loss
Even though I set a stop-loss level, I would lie to myself when the price dropped: “Hold on a bit longer, it will come back.” Manually moving the stop-loss down, eventually leading to liquidation. The more times I held on and recovered, the more confident I became in holding. Until one day, I never looked back and took everything in one go.

How I changed
After experiencing a blowout and getting scared, I set three strict rules for myself. Since then, my account has never gone to zero again.

First rule: No single trade exceeds 10%
No matter how optimistic I am about a target, I only risk at most one-tenth of my total funds on a single trade. Even if I lose that trade completely, I still have 90% of my capital left.

Second rule: Total position size no more than 50%
Always keep half of my funds in cash. It might seem like I’m missing out on gains, but when a crash comes, having money in hand is a different life from risking everything and losing it all.

Third rule: Accept the stop-loss once set
When the stop-loss is hit, I walk away. No moving or holding. If I get stopped out, I can earn it back next time; if my principal is gone, I have nothing left.

These three rules are simple, but very hard to follow. Because they go against human nature—against the greed of wanting to turn things around overnight, and against the impatience to recover losses immediately.

But it’s these three rules that turned me from a gambler who could lose everything every month into someone who can survive in this market. Position management isn’t for making big money; it’s for ensuring you never get kicked out of the game.

As long as you’re still at the table, there’s still a chance. Once you’re out, it’s all gone.