A friend recently came to consult me, saying he lost all 4000U in crypto futures trading and asking if there's still a chance to turn things around. I asked him to first review the process of his losses—going all-in, chasing highs and cutting losses, trading against the trend, basically stepping on all the taboo rules of futures trading.

After talking, I realized that his core issue isn't about market direction judgment, but rather that he has no systematic approach to opening positions. So I shared with him a relatively structured framework:

**Three Stages of Opening a Position:**

Step 1: Initially allocate 20% of your capital. This is the trial-and-error phase, using the smallest cost to test the market's temperament.

Step 2: If the market moves against you and losses reach 10%, cut your position immediately. This keeps single-losses within 2% of your total funds, avoiding serious damage.

Step 3: If the direction is correct, after a 10% profit, add 20%. Continue this rhythm—another 10% increase, then another 20%, and on the third time, increase to 40%. This way, you can amplify gains in the right direction and reduce your average cost through batch additions. As long as the position doesn't retrace to -10%, hold on; if it drops below that, close all positions.

The underlying logic of this framework is to prioritize risk management. It’s somewhat similar to the philosophy of the trading legend Livermore—controlling risk with discipline and proportionality, letting profitable trades run as much as possible, and cutting losses quickly.

Of course, this is just a basic framework. In actual trading, many variables come into play, and market movements are always uncertain. I follow this approach myself; it’s relatively stable, but I wouldn’t claim it’s 100% effective. The core value of this method is to keep risk within controllable limits and improve long-term win rates.

The easiest way to get trapped in futures trading is lacking a methodology—ultimately turning into market fodder. Having a framework or not makes a huge difference in the outcome.