$ACT $PNUT

《Contract: I am a Gambler - How to Prevent Spike Injections》

Why prevent spike injections?

Answer: Even if you have a 99% win rate when opening a position, encountering a spike injection can cause you to lose your previous profits. The higher your previous win rate, the more confident you become, and the less vigilant you are against black swan events.

How to prevent spike injections?

Answer:

1. Set stop-loss orders.

2. Stay vigilant with low-leverage contracts, as market makers clear high leverage positions 90% of the time. Contracts below 10x often escape unscathed, giving people a false sense of security. In reality, it’s like boiling a frog in warm water; then suddenly a spike occurs, leading some to get liquidated directly, while others survive but then add to their positions, underestimating the determination of the market maker. This can lead to a situation where they get played out by low-leverage contracts, or they end up cutting losses significantly to exit.

3. No matter how much leverage you use, whether it’s all-in or partial positions, at least establish 2-3 layers of position concepts, rather than going all-in and trying to hold on.

4. Use take-profit and stop-loss tools. When opening a position with take-profit and stop-loss tools, you can set a trigger price. For example, if I want to catch a spike at a market price of 1.2, I can place an order at 1.06. At this time, I use the take-profit and stop-loss to set the trigger price at 1.04. When the spike drops to 1.06, it won’t execute directly; instead, it will trigger at 1.04. If it drops directly to 0.95, it won’t execute, thus avoiding a direct loss during a spike. The order will execute when the spike recovers at 1.06, understood? Of course, the trigger price and the execution price should not be set in areas with dense chips, to prevent successful order execution during the process of spike fluctuations, which could lead to liquidation.

Additionally, each time you open a position, you should set a take-profit and stop-loss for high-leverage contracts at 5%-10% of your position size, fully leveraged. The execution price should not be too close to the trigger price, ideally positioned one layer above and below your liquidation price.

Of course, this won’t guarantee absolute safety, but at least it can help manage some of the risks.