Leverage is like a double-edged sword; while it amplifies gains, it also ruthlessly magnifies human weaknesses.

I've seen too many lamentable cases: an account doubling from tens of thousands to hundreds of thousands in just half a year, looking unstoppable, only to be wiped out within a few hours by a single operation without a stop-loss. This is not some internet joke, but a real tragedy that happens almost every day in the market.

Many traders think liquidation occurs because of misjudging the market trend, but the truth is often more painful—most of the root causes of liquidation are buried long before. When opening a position, they never consider where to set the stop-loss; once losses start to accumulate, they comfort themselves with "wait a bit longer, maybe it will rebound," but small losses turn into big ones, and eventually, all hope is lost.

I’ve also paid my tuition in this regard. There were times I stubbornly held against the trend, hoping for a correction even when I knew the trend was wrong. There were moments of greed too—knowing the direction was right but wanting to squeeze out a little more, only to give back all the profits I had painstakingly earned. Honestly, the market doesn’t shortchange anyone; it’s those who refuse to cut losses decisively that suffer.

Later, I realized a principle: the essence of contract trading isn’t about how many times you win, but about how much loss you can endure each time.

Stop-loss, to put it simply, is your survival line. It’s a mandatory exit mechanism that ensures a single loss doesn’t eat up too large a portion of your capital. With leverage, market reversals can trigger forced liquidation; setting a stop-loss in advance is like drawing a red line for your maximum loss.

Now, my approach is: before placing each order, ask a vital question—if the market moves against me, what’s the maximum I can lose? This number isn’t just guessed randomly; it’s calculated using a clear formula. Usually, I keep the maximum loss per trade within 1% to 2% of my total account funds.

The stop-loss point is determined at the moment I open the trade. Once the price hits it, the system automatically executes the exit—no hesitation, no fantasies, no changing the order. It’s that simple, but also that effective.