Many people enter the crypto world hoping to turn things around quickly, but they are often discouraged by forced liquidations or being trapped. Actually, the key is not how amazing your chosen trading pairs are, but the art of risk management and capital allocation. Today, I will share a practical contract trading strategy that even beginners can understand.

The core logic is simple: always use only 20% of your total principal to open a position, while the remaining 80% stays locked and untouched. What are the benefits of this approach? Even if this trade drops by 5% and hits the stop-loss, your loss is controlled within 1% of your principal, avoiding serious damage. For example, with a 100,000 yuan capital, you invest only 20,000 yuan in the first trade, and the remaining 80,000 yuan stays out of the market.

The next key concept is "rolling over" (滚仓). This is not just adding positions, but letting profits do the work. Suppose you make 2,000 yuan (a 10% gain) on a 20,000 yuan position; instead of cashing out immediately, you store this 2,000 yuan into a "profit pool." For the next trade, you still use the original 20,000 yuan, and the profit is kept separate.

This process continues repeatedly. When the profit pool accumulates to 20,000 yuan (equal to the initial position), your next position size increases to 30,000 yuan. Every additional yuan added is earned profit, so even if you lose, it doesn't hurt because you're not risking your principal. This mindset is completely different.

Let's do some numbers. Assume you choose a mainstream coin, with a trading cycle of about 15 days, a win rate of 75%, and a take-profit target of 10%:

Round 1: 20,000 yuan position → earn 2,000 yuan → profit pool accumulates 2,000 yuan

Around Round 10: profit pool reaches 20,000 yuan → principal increases to 30,000 yuan → each trade's profit becomes 3,000 yuan

Round 30: profit pool reaches 50,000 yuan → principal increases to 70,000 yuan → each trade's profit rises to 7,000 yuan

This number sounds exaggerated, but the logic is solid. The power of compound interest is terrifying over long cycles. Turning 100,000 yuan into 1,000,000 yuan is not a dream, it's mathematics.

The key is execution. Three disciplines are indispensable: strict stop-loss setting (around 5%), adherence to the 20% principal rule, and separating profit and principal into different accounts. Greed is the biggest enemy. Many people lose because they want to add more after a win, or they blow up due to poor stop-loss settings.

The crypto market is cyclical, and so are opportunities. As long as you can survive a few cycles, the snowball effect of compound interest will grow bigger and bigger. The crucial point is not to put everything on the line in one market cycle—that's not courage, that's gambling.