Many traders, shortly after entering the market, treat "small stop-losses and high take-profits" as their trading Bible, but as a result, their accounts become increasingly difficult to grow. This logic sounds airtight—minimize risk and let profits grow infinitely. However, in reality, the volatility of the crypto market often completely shatters this idealized notion.

How volatile is the crypto market? Fluctuations of 5% up or down are nothing special; this might just be the market makers slightly adjusting their positions. If you set your stop-loss 2% below your cost basis, a normal market noise can easily wipe you out in one go. When Bitcoin just breaks through a previous high, those who chase in often set their stop-loss 1% below the support level. What happens then? A single lower shadow appears, and you get forcibly liquidated, only for the price to immediately surge upward—such a feeling is indeed unpleasant.

The problem isn't with stop-losses themselves but with how they are set. The correct approach is to place stop-losses at structural break points, i.e., reserving 3%-5% space below key support levels (previous lows, large-volume trading zones). This way, risk is effectively controlled, and you won't be easily shaken out by daily fluctuations. Another practical tool is the ATR indicator—if the current average true range is $200, then the stop-loss distance should be at least 1.5 times the ATR, to avoid being misled by normal market volatility.

Another extreme is setting take-profit targets too high. Many people think "double my position before exiting," which is understandable, but most markets simply don't go that far. Prices often retrace, consolidate sideways, or create false breakouts to trap both bulls and bears. Your take-profit target becomes as elusive as a carrot in front of a donkey. The final result is quick profit-taking at small gains, missing out on major moves, and turning the entire account into fragmented small losses.

The key is to establish a take-profit mechanism that aligns with the market stage. Different phases require different strategies—early in a trend, you can actively expand your position; mid-term, take profits appropriately; and later, be more cautious. Blindly pursuing high take-profit multiples will only result in earning suboptimal gains during perfect market conditions.