📜 Futures Trading Opening Discipline Manual on Position Management

(Opening Position, Take Profit and Stop Loss, Moving Break-even, Forced Liquidation Analysis)
Core Concept: Futures are a game of risk management, not gambling. The primary task is to preserve the position, and only then to make a profit; holding onto a position is a major taboo. Follow the trend; even if the price eventually returns, the fluctuations during the process may trigger a forced liquidation through leverage.

Most Futures Trading Career End Process:
First order: 10x → Small profit
Second order: 20x → Earned again
Third order: 50x → liquidation
It's not the technology that's lacking, but the baseline for placing orders. Establish trading discipline with three phases of solid content and a set of executable rules.

1. Position Management: Never Over-leverage — This is the first rule among all the rules, and it is a hard rule.
Total Position Principle:
The total funds invested in Futures Trading should not exceed 10%-20% of your total cryptocurrency assets. This is your "tuition fee" and "ammunition"; losing it will not affect your mood and life.
Always earn money from Futures Trading to buy spot or withdraw. Only keep a fixed 10%-20% of funds in the Futures Trading, and never sell spot to do Futures Trading.

Single Position Opening Principle:
Each time a position is opened, only 1% - 5% of the total contract funds can be used.
For example: If the futures trading account has 10,000U, the amount for a single position should be between 100 - 500 U.
Why? A light position keeps your mindset stable. Even if you incur five consecutive losses, you will only lose 5% of your total funds, and there will still be plenty of opportunities to turn the tables. A heavy position can lead to a total loss in one go, resulting in an immediate exit.

2. Take profit and stop loss: Must be set before placing an order.

"Opening a position without a stop-loss is like driving without a seatbelt."

Stop Loss: The "maximum acceptable loss amount" set for this trade. Once the price reaches this point, the system will automatically close the position, helping you lock in losses and prevent further losses from expanding.
How to set it?
Technical stop loss: Set below key support level (long position) or above resistance level (short position). For example, open a long position at support level 111,500, and the stop loss can be set at 111,000.
Amount Stop Loss: Calculate based on your Position. For example, if you opened a long position of 500U and decided that you can afford to lose a maximum of 50U (10%), then you can calculate your stop loss point based on this.
Discipline: It is strictly forbidden to remove stop-loss orders and to hold onto positions. A single lucky hold can lead to irreparable consequences.

Take profit: The "target profit point" set for this trade. Once reached, it will automatically close the position, securing the profit.
How to set it?
Risk-Reward Ratio Principle: The "potential profit" should be at least 1.5 to 3 times the "potential loss." For example, I am willing to lose 50U to aim for a profit of over 100U; this is a trade worth taking.
Partial profit-taking: This is a good habit. For example, when the price reaches the first target level, close half of the position, recover the principal and part of the profit, and then move the stop-loss to the opening position (move to break-even), allowing the remaining position to seek greater profits.

3. Move to Breakeven: When the market moves in your favor and reaches a certain position, adjust your stop-loss level to your opening position cost.
How to do it?
1️⃣Open a long position at 111,500, set the stop loss at 111,000.
When the price rises to 112,500 (profit of 100 points), move the stop loss price from 111,000 to 111,500.
After this operation, even if the market suddenly reverses, you will at most break even (exit at the principal), and you will never let a profitable trade turn into a loss.

4. Liquidation: The last line of defense that must be clear.
When the margin cannot cover potential losses, the exchange will forcibly liquidate your position. This is called liquidation.
How to calculate: The platform will automatically calculate based on your leverage and position. The higher the leverage, the closer the liquidation price is to the opening price, making it easier to be liquidated.
How to avoid:
1️⃣ Use low leverage (recommended 10x): High leverage may seem to yield high profits, but in reality, the margin for error is extremely low.
2️⃣Light Position: The lighter the position, the greater the market fluctuations it can withstand, and the further away the liquidation price is.
3️⃣Strictly set stop-loss: Manual stop-loss should be far above the liquidation price, and it has already helped you control the risk before reaching the liquidation.

💎 Summary: Four-step mantra for opening a position

1. Calculate Position: Single Opening Position ≤ 5%.
2. Set Stop Loss: Do not open a position if the profit-loss ratio is below 1.5.
3. Protect profits: After making a profit, immediately move the stop loss to the break-even price (move to cost price).
4. Low Leverage: Use controllable leverage of 10 times.

The market always has opportunities. Following discipline is the only secret to surviving in this market. Print this rule out and read it aloud every time before placing an order~

Next update on position management adjustments, profit and loss ratios, etc. If anyone needs interpretation of other cryptocurrency terminology, please leave a message, and I will create a dedicated column for interpretation.