Survival Guide in Extreme Market Conditions: Position Management, Stop-Loss Settings, and Psychological Preparation

When ETH drops more than 5% in a single day and the entire network experiences $1.1 billion in liquidations, the majority of people's first reaction is wrong. This article does not discuss market predictions; it focuses on three things: position management, stop-loss settings, and psychological preparation.

Position Management: Never let a single asset exceed 30%. The correct structure is: BTC + ETH account for 40%-50% of the total position; leading altcoins account for 20%-30%; stablecoins and cash management account for 20%-30%. With this structure, even if ETH drops 10%, the total drawdown is only 3-5%.

Stop-Loss Settings: Trading without a stop-loss is gambling. Whether spot or futures, every trade must have a stop-loss. Spot stop-losses can be set wider, for example, buy ETH at 1750, with a stop-loss at 1650. Futures stop-losses must be set simultaneously when opening the position, recommended not to exceed 5% of the principal.

If you are already deeply trapped and have no stop-loss, do not cut losses at the lowest point. The correct approach is: wait for a rebound (for example, ETH rebounds to 1780-1800), then cut half of the position, and set a hard stop-loss on the remaining position.

Psychological Preparation: Accept that “losses are part of trading.” A 5-10% drawdown is common in the crypto market. What you need to do is: turn off the monitoring software and do something else. Exercise, read, spend time with family. Extreme market conditions are not for panic but for testing your trading system.

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