2025-12-28 13:25:12

Many people have the wrong logic: risk management is often treated as a remedial measure after the fact. But in reality, true experts set boundaries before they even start.

The idea behind the Little Fatty model is very clear—first determine the risk boundaries and trading rules, so that the system can operate stably within this framework. It’s not about thinking of risk control during the trading process; by then, it’s already too late.

This is especially important for on-chain trading. Market volatility is fast, decision windows are small, and you can't expect to start thinking about stop-losses only when you're on the verge of liquidation. The preset risk model acts like guardrails for trading—the price levels to stop-loss, signals to reduce positions, conditions to close positions—all set in advance.

Simply put: define risk → configure the system → let it operate. That’s the professional way.

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NewPumpamentals

· 7h ago

Stay alert, this is the true rhythm of risk control. On-chain, it's like this—by the time you react, you've already lost everything. Alright, I give in, I have to hardcode the rules. The preset risk system is indeed perfect; otherwise, you'll just watch your position get liquidated and cry.

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StablecoinArbitrageur

· 7h ago

honestly, this is just regression to the mean wrapped in "framework" language. i've backtested (n=8000+) the preset stop-loss thesis across 47 different volatility regimes and the edge disappears once you factor in slippage and oracle lag. Little Fatty model sounds clean on paper but liquidity pools don't care about your predefined boundaries when impermanent loss hits different.

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DYORMaster

· 7h ago

To be honest, this is exactly what I've been emphasizing—most people lose money because they realize too late. Stop-loss really needs to be set in advance; otherwise, you'll be confused when the market moves suddenly.

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MoneyBurner

· 7h ago

Sounds about right, but to be honest, I'm the kind of person who only becomes a "Kuzuo" after the fact, often regretting not setting a stop-loss after liquidation. This time, I must execute it strictly and give it a try.

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CrossChainBreather

· 7h ago

That's right, many people are the type to only fix things after the fact, regretting only after a collapse. Preemptive risk management is indeed something that needs careful consideration; otherwise, a sudden chain collapse could directly wipe out your account.

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