The Key to Successful Futures Trading 2: Risk Management

Systematic TP/SL, Position Management, and Asset Protection Strategy

The volatility in the crypto futures market is beyond imagination, and due to high leverage, a complete loss can occur within minutes. The second key to survival and success is "system-based risk management."

 

Structural Understanding of Liquidation and Loss

In futures trading, if you let your losses run, your position can drop below the margin and trigger a forced liquidation. In this case, part of your balance may be seized, and if using cross margin, it can affect the entire account. The liquidation price is calculated based on the entry price, leverage, margin, accumulated fees, and other variables. In short, "protecting your assets should come before pursuing profits."

 

Make TP/SL (Take Profit/Stop Loss) a Habit

 • Set up TP/SL auto orders: Set a clear trigger price when entering a position. This allows you to respond to sudden market changes without constant monitoring.

  e.g. Set TP at +5% gain, SL at -2% loss

 

 

💡The more volatile the market, the more useful it is to combine limit orders and trigger orders to avoid slippage (executing at unintended prices).

 

 

Risk Limit & Fund Management

 • For large trades and high leverage, always set a Risk Limit to avoid instant liquidation due to sudden price spikes or drops.

 • Only store part of your assets in the futures wallet, and keep the rest in the funding wallet. If you invest everything at once, your entire account could be wiped out by unexpected market movements.

  -> [Guide to Wallet Types: Funding Wallets and Futures Wallets]

 

Real-Time Order and Position Monitoring

 • During trading, monitor the order book, trade history, current positions, asset status, and liquidation price frequently. If you see unusual spikes or drops, execute a stop loss or close the position quickly.

 

Other Practical Risk Management Tips

 • Understand the difference between cross margin and isolated margin, and choose the margin mode that suits your risk level

 • Trading volume, volatility, and fee structures may vary depending on the time of day and market conditions — regularly review weekend and nighttime market behavior

 • Keep records of liquidation and PnL, and review them often

 • Avoid trying to recover losses quickly, going all-in, or revenge trading

 

 

💡When you treat risk management as a part of your routine, and focus on preventing losses rather than recovering them, true "survival" in the futures market becomes possible.