Having spent ten years in the futures market, experiencing countless liquidations and losses, I gradually realized a fundamental truth: contract trading is never about high-end techniques or mysterious indicators; at its core, it tests one’s mastery over human nature.

My first liquidation happened in 2017. Watching my account’s 10,000 USDT quickly wiped out was a moment I’ll never forget—the despair still lingers. I spent the entire night tossing and turning in bed, palms sweating. Subsequent liquidations came one after another like dominoes, and at my worst, I seriously considered quitting the market altogether.

But today, ten years later, I finally achieve consistent profits, with last year’s annual return reaching seven figures. This isn’t because I discovered some “ultimate winning secret” or black-tech indicator, but because I truly understood the logical rules behind contract trading.

**Most people misunderstand the concept of stop-loss**

When I first started trading futures, I was also told that “setting strict stop-losses is essential.” So I mechanically placed stop-loss orders everywhere, but the result was quite ironic—over half a year, just due to frequent stop-losses and slippage, I lost 8,000 USDT.

Later, I realized that stop-loss is merely one option in the risk management toolbox, and shouldn’t be blindly executed as an end in itself.

If your trading strategy has a high win rate, validated by extensive backtesting with positive expected returns, sometimes you don’t even need to pre-set fixed stop-loss levels. The key is whether your model is truly profitable.

But there’s a very important prerequisite: you must trade with small positions on mainstream coins. If you hold Bitcoin or Ethereum, leverage below 2x, and the trend line isn’t broken, you can give the price more room to move.

But it’s a different story with altcoins. Even with just 10x leverage on altcoins, not setting a stop-loss is basically suicide—an extreme market move can wipe out your account instantly. The liquidity and risk profile of these small coins are on a completely different level.

**A simple principle I’ve summarized: When trading Bitcoin and Ethereum with leverage below 2x, you can be more patient if the trend isn’t broken; but when it comes to altcoins, no matter how low the leverage, not setting a stop-loss is gambling with your life.**