The most heartbreaking truth in the crypto world: you think you've lost to market fluctuations, but in reality, you've lost to that position sizing decision.

Liquidation stories happen every year, but the scripts are always a few types:

Some go all-in late at night on obscure coins, and a single fluctuation turns their screen black. Some watch the bullish market from the sidelines with small positions, but when the bear market hits, they get caught full position and can't even gather chips to recover. Others stubbornly hold onto a coin, unwilling to cut losses, eventually losing all their capital to turn the tide.

The problem has never been your analysis skills—it's reasonable to identify the right direction, but the real test is whether you can control your position size. There’s no "sure-win" secret in this game, only the wisdom to "stay alive."

**Three Bottom Lines for Navigating Cycles**

First, the principal is the bottom line. Each trade’s loss should be controlled within 2%-4% of your principal—at most 4,000 on a 100,000 account—and you should stop once you reach that limit. As long as the principal remains, the opportunity remains.

Second, don’t approach crypto trading with stock market thinking. The annualized volatility in crypto is 2-3 times that of stocks, so your position should be at least 30% more conservative. Applying stock logic here is like going into a storm empty-handed.

Third, adjust according to the cycle. In a bull market, you can be aggressive with 50%-70% of your holdings; in a bear market, quickly reduce to below 30%. Mainstream coins, small caps, and leverage positions must be planned separately.

**Five Practical Strategies You Can Use**

1. **Segmented Position Building**: Divide your principal into three parts. Use 10% to explore the trend, wait until the trend is clear to add 20%, and keep the remaining 20% for emergencies.

2. **Allocate According to Risk**: No more than 25% in major coins like BTC and ETH, a maximum of 5% in a single altcoin, and be even stricter with leverage—10% of your principal is enough.

3. **Reverse Engineer Position Size from Stop-Loss**: First set your stop-loss point (e.g., exit if it drops 6%), then calculate your position size by dividing the maximum loss you can tolerate by the stop-loss percentage. This helps prevent getting swept out by stop-loss hunts.

4. **Adjust Pace With Market Conditions**: During a bear market, keep new positions within 5%-8%. In early bull markets, increase to 50%-70%. When nearing the end, immediately cut back to cash.

5. **Discipline Over Instinct**: Predefine your entry points, stop-loss levels, and position sizes. No more than 20% in a single coin. After three consecutive losses, stop and review.

The crypto market is never short of opportunities; each cycle repeats itself. What’s truly missing is whether, when opportunity knocks, you still have ammunition in your pocket. Most people aren’t lacking effort—they lack a system that allows them to survive. Building this defensive framework is what will help you find your way through the waves of volatility.