Teaching 【Experience Q&A】

Question: In your opinion, if you only have $20k and want to focus solely on Bitcoin, how much leverage would you use? How much capital would you allocate per trade? I want to understand what the best possible scenario I can achieve with my current funds is. I hope you can answer me, thank you.

Our dear member asked a good question about fund management.
Suppose we have $20k and want to profit from it.
First, please specify the details. For example:
From 100% of the funds, if you want to make a 25% profit per month, then on $20k, that means nearly $5,000 in profit each month.
Now I will break it down for you step by step:

The first thing is fund management:
We divide the funds into 4 parts:
$5,000 per account.
The remaining three accounts serve as reserves. Unless the first account is severely trapped, I wouldn’t use the other accounts.
If someone makes a living from trading, this can help them survive long-term in the market.

Many members ask how much leverage to use.
It’s very simple.
We only use 3 to 5 times leverage, and only with isolated margin accounts.
For example:
On a $5,000 account with 4x leverage = a $20k position.
If I short BTC around $82k and the price drops about 20%, then with 4x leverage, my position would profit nearly 80%.
That means a single BTC trade could make close to $4,000 in profit.
With proper risk management, this plan is almost risk-free. Only exchange manipulation or major mistakes could disrupt the account.

Next is a key point many traders fail to truly understand:
Stop-loss.
For me, a stop-loss is like this example:
Imagine I am in a forest, no one can help me, and suddenly I find one of my fingers infected and worsening, slowly spreading to other fingers.
The first thing I would do is cut off that finger before the infection spreads to the whole hand or body.
Because cutting off one finger is better than losing the entire arm.
Trading is exactly the same.
Small losses are better than losing the entire account.
Now we also need to set daily stop-losses.
For example:
On a $5,000 account, I only risk about $200 to $400, with target returns close to $2,500 to $3,500.
So risk management is the real key.
First, we protect the funds (the portfolio). Then, we use stop-losses to protect the principal.

Next is the next part, which is also the most important.
For example:
If I make $4,000 from a $5,000 account:
I would take $2,000 for household expenses.
The remaining $2,000 I would lock away for future expenses.
If next month I make another $4,000:
Again, $2,000 for expenses.
The remaining $2,000 I would allocate to reserves.
This way, the reserve account gradually grows:
$5,000 → $5,500 → $6,000, and so on.
If we can repeat this process continuously for a year, then a single account can easily reach about $25k.
And within 3 years, through proper compound interest and discipline, this strategy can expand significantly.
Members, there are actually many other methods, but this is one of the personal approaches I have used myself, so I wanted to share it with everyone.