Having spent ten years in digital asset trading, I’ve experienced three liquidation events. The most severe one was when a 10,000 USDT position was held all the way to zero, and thinking back, I still can’t help but smirk at that feeling. It’s these painful lessons that later helped me develop a set of methods that aren’t overly complicated but quite effective, with annual returns stabilizing around seven figures.

Friends often ask me: "Should I set stop-losses, or just hold through?" Actually, that’s the wrong question. The real difference isn’t about strictly following one rule or another, but about whether you can truly understand the underlying logic of the market.

**Stop-losses are not as sacred as you think**

In the beginning, I was a firm believer in stop-losses. "Stop-loss is just saving your life," I heard that so often it became a mantra. But in practice? Frequent stop-losses + fees + slippage, and within half a year, I lost all 8,000 USDT. Later, I realized the problem wasn’t with stop-losses themselves, but with blindly using them.

If your strategy can withstand extensive backtesting and has a high enough win rate, you actually don’t need to set stop-losses frequently. But there are exceptions—like trading altcoins or using 3x to 10x leverage—then you must set stop-losses, or an extreme market move could wipe out your account instantly.

**Hidden costs are the real killers**

Do you know who the biggest enemy of short-term trading is? It’s not market reversals, but fees and slippage. These two can eat up half of your profits.

Currently, I trade no more than five times a month. Sounds low, right? But each trade is based on trend signals—for example, I only enter when BTC breaks a key support level. This way, the profit from one trade can cover all the costs of multiple previous trades, and the psychological pressure is much lower.

**Leverage should match the asset**

This is often overlooked. Using 2x leverage on mainstream coins like BTC or ETH, as long as the trend isn’t completely broken, can withstand volatility. But if you’re using 2x leverage on altcoins? You’re not far from liquidation.

Conversely, even with 10x leverage, you should set proper stop-losses when trading altcoins. I once held a 10x leveraged position on an altcoin and got wiped out after a big bearish candle. That lesson is etched in my mind—I probably won’t forget it in this lifetime.

**Final words from the heart**

Having been in this market for ten years, I’ve stepped on more pits than I’ve made money. Those who keep shouting "You must set stop-losses" all the time…