Correct market prediction but still lost 630,000, the truth about a desperate gamble

I once fell into a trap that many contract traders do—betting all chips on a single trend. When I first entered the scene, I often took pride in my market judgment, but ironically, my most accurate calls ended up costing me the most. Within half a year, my 630,000 yuan capital vanished into thin air. Only after reviewing my trade records did I realize the real problem wasn’t my judgment but my completely wrong trading approach.

All-in Trap: Why Heavy Positions Increase the Risk of Liquidation

Many people have a deadly misconception about contract trading—believing that as long as their direction is correct, they can make steady profits. So, when they see a breakout signal, they can’t resist going all-in, fearing they’ll miss any upward move.

But reality is often harsher. The market makers are waiting for such prey. Soon after entering, they trigger shakeouts. These seemingly random pullbacks are actually carefully designed traps. I remember once the market moved in my predicted direction, but just before reaching my target, a shakeout wiped me out. Watching my account go from full position to zero was an unforgettable feeling of helplessness.

The essence of going all-in is a gamble—completely entrusting your fate to a single trend. Even if your overall direction is correct, a few counter-trend candles can wipe out your account. I still vividly remember that night of liquidation, staring at the zero balance on the screen, feeling paralyzed.

Stop-Loss Black Hole: Why 3% Fixed Stops Became the Market Maker’s Tool

After lessons learned, I started analyzing why stop-losses couldn’t save me. I realized the problem was using “fixed stops”—habitually setting 3% or 5% stop-loss levels.

To the market makers, this is an easy target. Contract volatility far exceeds spot, and a 3% buffer is negligible amid daily fluctuations. I was swept out three times by false breakouts, only to see the market surge right after I cut my losses. The regret was overwhelming. Later, I understood that stop-losses should never be fixed numbers but dynamically adjusted based on market volatility.

A proper stop-loss strategy must follow the trend, adapting flexibly to market swings, rather than being bound by emotional or rigid numerical limits. This isn’t just a technical issue but a complete overhaul of trading psychology and risk management.

From Despair to Turnaround: Three Ironclad Rules to Break the Gambler’s Trap

After experiencing the darkest moments, I reflected deeply and formulated three rules I must follow.

Rule 1: Never go all-in; split your position into three parts. This is the most straightforward way to combat the gambler’s mentality. Dividing your capital into three parts means even if one part is completely lost, it won’t ruin your overall rhythm. You can still participate in the trend while limiting the damage of a single loss.

Rule 2: Dynamic stop-loss adjustment based on volatility. No longer sticking to fixed percentage stops, but setting reasonable stops according to recent market amplitude. This helps filter out false breakouts and prevents being knocked out by normal fluctuations.

Rule 3: Stay out of the market when the trend is unclear. Holding a position is also a strategy—patience and waiting for confirmed opportunities. Compared to blindly entering, staying out is often the smartest choice.

With these rules, I emerged from the cycle of consecutive liquidation. Over a year, my account tripled, turning losses into steady profits. Most importantly, I finally understood that making money isn’t about being right or wrong in predictions but about good risk management.

Avoiding all-in bets is essentially buying insurance for your long-term trading career.