According to Woofun AI, SmartX founder David (David) revealed its core risk control logic to PA News. At a time when AI is reshaping the trading paradigm, he stated that about 80% of his trading positions are concentrated on blue-chip assets such as BTC, ETH, BNB, SOL, HYPE, and UNI, and the remaining 20% is allocated to small-cap altcoins. David pointed out that although AI can shift the market from searching for information to personalized recommendations, the responsibility for making decisions is still borne by users. Blindly trusting algorithms and increasing leverage is a fatal mistake.
David thoroughly explores the potential pitfalls of AI-assisted trading and believes that its core value is to reduce repetitive errors rather than guarantee profits. He warned that when the AI output appears to be closely analyzed, it is easy for users to create the illusion that “I understand”, thereby mistakenly increasing leverage or increasing exposure, and taking risks beyond their own ability to bear.
According to data compiled by Woofun AI, David himself recently experienced a retracement of about $2 million in blue-chip positions worth nearly $10 million, but he sees this as a normal fluctuation. Regarding copy trading, he emphasized the need to verify real transaction records, holding time and risk appetite, and be wary of false high-yield images created by platforms using demo accounts or small records.
Furthermore, given that small digital assets have poor liquidity and are vulnerable to small amounts of capital, he recommended giving priority to mainstream currencies with better market capitalization and liquidity, and using medium- to long-term price change strategies rather than short-term games.
In terms of risk management and control, David listed “don't go all in, keep enough capital” as the first principle, and advises investors to clarify the bottom line of their own tolerance before entering the market. In particular, he pointed out that risk cannot be assessed based on the leverage ratio alone; it is necessary to comprehensively consider the actual investment size, margin ratio, and overall asset status of the account. The retracement standard he gave was: before buying any crypto asset, confirm whether you can withstand a 75% drop. This is Bitcoin's normal decline rate in a four-year cycle; if it falls back 75% to 80% and the fundamentals have not changed, you can choose to increase your position, and once you reach 90%, you should stop losing money and leave the market.
This risk-control framework, which puts survival first, reflects a long-term trader's self-restraint in the algorithmic market rather than the overall judgment of the industry; at the end of the interview, he also stated that all of the above are personal opinions and do not constitute investment advice.