Many people want to turn their small funds around but always ask me how to do it. Recently, I helped a friend plan his account, starting with $2,000, and he achieved $38,000 in three months.

Does that sound like a fairy tale? Actually, there’s no secret. There’s only one watershed—calculate your loss limit first, then see how much you can earn.

What is the most common way retail investors die? They jump into the market without considering the worst-case scenario. The words stop-loss and take-profit are simple, but they separate those who make money from those who lose money.

**How to Trade Short-Term Contracts**

For 5x leverage short-term trading, my target is a 6%-8% return, but there’s a strict rule—stop-loss must never exceed 3%.

When the principal is small and leverage is high, losing just 1% can lead to liquidation. When I trade Ethereum short-term, with $10,000 principal, I cut the position immediately if a 3% loss occurs on any trade, and I exit as soon as I reach a 6%-8% profit.

Don’t think the profit is thin. Over a two-week cycle, you can still make an extra $5,000. What’s the secret to short-term trading? It’s not gambling for a double, but using trading discipline to compound.

**How to Capture Spot Market Waves**

To enjoy a wave increase of over 40%, you need to tolerate 5%-10% fluctuations without being shaken out.

Place your stop-loss at effective levels—such as previous lows or support at the 4-hour moving average. Only when the level is broken does the trend truly change.

Take-profit should be done in two steps: when the price rises to about 35%, close half of the position to lock in profits. The remaining half should have a trailing stop; if it retraces 8%, close all positions.

No one can sell at the absolute highest price. Those who can sell at relatively high levels have already surpassed most retail investors.

**Position Management Is the Line of Life and Death**

A light position means you can sleep peacefully with an 8% stop-loss. A heavy position makes your heart race even with a 2% stop-loss.

With the same $12,000 account, dividing it into $3,000 for trading and $9,000 full position, the risks are completely different. This is not an exaggeration—trading full position without a stop-loss is like driving without a seatbelt, just a matter of time.

My own trading bottom line is very strict:

Stop-loss is not a cost; it’s a survival tool. Take-profit is not a dream; it’s a dividend the market gives you.

Before each trade, ask yourself: Is this my last trade? First, figure out how to lose and how to preserve the principal, then think about how to earn and how much you can earn.

Market opportunities are always there. But if your principal disappears, no matter how good the rise, it’s meaningless to you.