Eureka_Traders
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HOW TO AVOID LIQUIDATION IN CRYPTO?
In future trading, liquidation is something a trader must avoid by all means. Liquidation process happens when a trader can no longer meet the margin requirements of their leveraged position. To avoid liquidation, a trader strictly follow these tips;
1. Use Stop-Loss Orders
Losing something is better than losing everything. The most important tip to avoid liquidation is simply using a stop loss. Stop loss (SL) allowes traders to set a price to automatically exit a trade when the price of an asset hits the predetermined level.
2. Stick to Small Leverages
Too much leveraging is gambling and not trading. Even a slight pump or dump can make you dump. Overcome your Greed. 5x leverage is ideal for all types of future trading. However, if you are very sure about the pump or dump, you can use 6x - 10x leverage. More than 10x leverage is highly risky and can even lead to liquidation.
3. Use a Small Portion of Your Capital
Don't put all your eggs in one basket. Only use 5% - 10% of your capital for a single trade. This will increase your flexibility of trading more and trading smart with discipline. This will also free you from FOMO.
4. Stay Away From Highly Volatile Coins
Newly listed coins, the coins to be delisted and the low market cap coins are very volatile. There are many fake and manipulation pumps or dumps in these coins to liquidate your account. Don't trade on these coins.
5. Avoid Too Many Trades Simultaneously
Don't take more than 4 trades at the same time. 60% of your capital should always be in reserve to avoid any type of liquidation. After the success of 2 - 3 trades, you may enter 2 - 3 trades further. However, it is advised to avoid over trading. Think more, trade less. Focus on quality and not quantity.
Humble Request
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#LiquidationFrenzy
#LiquidationAlert
#SmartTradingStrategies
1. Use Stop-Loss Orders
Losing something is better than losing everything. The most important tip to avoid liquidation is simply using a stop loss. Stop loss (SL) allowes traders to set a price to automatically exit a trade when the price of an asset hits the predetermined level.
2. Stick to Small Leverages
Too much leveraging is gambling and not trading. Even a slight pump or dump can make you dump. Overcome your Greed. 5x leverage is ideal for all types of future trading. However, if you are very sure about the pump or dump, you can use 6x - 10x leverage. More than 10x leverage is highly risky and can even lead to liquidation.
3. Use a Small Portion of Your Capital
Don't put all your eggs in one basket. Only use 5% - 10% of your capital for a single trade. This will increase your flexibility of trading more and trading smart with discipline. This will also free you from FOMO.
4. Stay Away From Highly Volatile Coins
Newly listed coins, the coins to be delisted and the low market cap coins are very volatile. There are many fake and manipulation pumps or dumps in these coins to liquidate your account. Don't trade on these coins.
5. Avoid Too Many Trades Simultaneously
Don't take more than 4 trades at the same time. 60% of your capital should always be in reserve to avoid any type of liquidation. After the success of 2 - 3 trades, you may enter 2 - 3 trades further. However, it is advised to avoid over trading. Think more, trade less. Focus on quality and not quantity.
Humble Request
If you like this article, don't forget to follow me.
#LiquidationFrenzy
#LiquidationAlert
#SmartTradingStrategies
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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