Looking at the account plunging, I finally understand—stop loss is not about giving up; it's the only way to stay alive and leave the gambling table. In this 24/7 market, I’ve equipped myself with a "fireproof device," called the 5% stop loss rule.

I still remember when I first entered the crypto world; I felt like I had fallen into a candy store, with my mind full of overnight riches. And then? The market gave me a harsh slap. That loss taught me a lesson: here, surviving is always more urgent than making money. During three major crashes, I managed to get through with this method. Today, I’ll reveal this secret.

**01 What exactly is the 5% principle?**

Many people recite all kinds of sophisticated trading theories, but honestly, for ordinary people, the 5% principle is the real life-saving rule. This number isn’t something I just made up; it’s been verified by countless traders with real money.

It has two layers of meaning:

The first layer: the maximum loss per trade is 5% of your total capital. If your account has 100,000 USD, then any single trade can lose at most 5,000 USD. This means—if you make 10 wrong trades in a row, and still have half of your principal left, there’s hope to turn things around.

The second layer: if a single coin drops 5% from the purchase price, cut immediately without hesitation. Don’t think 5% is insignificant; this defensive line can save you from the vicious cycle of "getting trapped → taking losses → getting trapped again."

My habit is to write the numbers into a table, making everything clear. For example, if I plan to invest 10,000 USD, the 5% stop loss line is a 500 USD loss. When executing, there’s no hesitation.

**02 Why do some people stubbornly refuse to cut losses?**

I’ve asked many people, and the answer is basically: "What if it rebounds after I cut?"—This is a psychological trap. Greed and luck are the biggest killers in the crypto world. Instead of betting on that "what if," it’s better to trust probability. The power of stop loss isn’t in this one trade, but in your ability to survive and make the next 100 trades.