I want to share some trading insights recently, especially my thoughts on risk management.

Many traders get excited when they see a good short-term win rate, but there's a harsh reality— even with a 90% win rate, you can still blow up your account.

Here's a specific example:
You have $1,000 in capital, and after five consecutive profitable trades, you’ve gained 100 points (using Ethereum as an example), and your account grows to $3,000. On the fourth trade, you get stopped out with a 20-point loss. If you’re using heavy leverage, you could lose half of your capital immediately. If you then lose two more trades in a row, your account is wiped out.

Mathematically, it’s brutal— a 100-point profit can be wiped out by a 40-point loss. This is not a scientific way to trade.

The real compound interest logic looks like this:
Starting with $10,000, with a fixed position of 10 ETH per trade, regardless of win rate. If you aim for 1,000 points profit in a month and accept a 300-point loss, you still have a real profit space of 700 points. That’s how you can grow steadily.

The key difference is this: a 20-point stop loss does not mean you can go all-in. Maintaining a fixed position size is the best way to counter market uncertainty. Greed and gambling mentalities are the direct causes of account blow-ups.