At midnight, I was awakened by my cousin's cries. She sobbed and told me that her 6000 dollar account had dropped to zero. It turns out she had taken a strategy of going long with 5x leverage on her entire position, and as a result, her account was completely dropped to zero due to just a 3% pullback. Even more heartbreaking was that her trading screenshot showed she had invested all 5800 dollars without setting any stop loss.

This lesson profoundly illustrates the dangers of trading with the entire account. Many people mistakenly believe that using the entire account can bring maximum profits, not realizing that it actually involves taking on immense risks. Trading with the entire account is like driving a sports car without brakes; even the slightest bump can lead to catastrophic consequences. The true cause of liquidation is not the high leverage itself, but rather the excessively concentrated positions.

Let’s take a look at the data: with 5x leverage, if 96.7% of the principal is invested in a full position, a mere 6% reverse fluctuation will lead to liquidation. In contrast, if only 12.5% of the principal is used with the same 5x leverage, the price needs to drop by 86.7% to result in total loss. This risk gap is enormous.

After a year of exploration and summary, I have finally found three core principles to avoid full account liquidation, which not only preserved my principal but also achieved an 80% growth in my account:

1. A single trade should not exceed 7% of the total account balance. For example, in a 6000 USD account, the maximum amount for a single trade is 420 USD. Even in the worst-case scenario requiring a stop loss, the loss is limited to 29.4 USD, which will not significantly impact the account.

2. Keep a single loss within 1.1%. Taking $420 with 5x leverage as an example, set a 1% stop loss line, resulting in an actual loss of only $8.4. This allows for quick stop loss and avoids being deeply trapped.

3. Maintain a flat position when the market direction is unclear. Abandon difficult-to-understand market fluctuations and do not easily increase your position. Only consider entering the market when the daily line breaks through key levels and is accompanied by volume.

I once had a fan who faced the risk of liquidation every month. But after adopting these principles, his account grew from $3200 to $5500 in 4 months. He exclaimed: "I used to think going all in was a gamble for my life, now I understand that a real all-in strategy is meant for long-term survival in the market."

Looking back, I have stumbled through trading in the past. But now, I have finally lit an everlasting lamp for my trading journey. These experiences apply not only to the cryptocurrency market but also to other financial markets. No matter how the market fluctuates, only by adhering to the correct risk management principles can one remain undefeated in long-term trading.