How to Avoid Liquidation in the Cryptocurrency Contract Market?
With 10 years of trading market experience, I was born in 1990, 34 years old, with a net worth of over 50 million, of which about 42 million was earned from the "cryptocurrency market." I also experienced losses in the early stages, but I've made it all back! Today, I will share some practical tips on contract trading with you!
Liquidation is not a matter of luck; it's a matter of operation. If you want to survive in the market for a long time, remember the following points:
1. Low leverage + light position, don’t risk your life
Newbies should use 3-5x leverage, and even experienced traders shouldn’t recklessly use leverage above 10x.
Keep your position within 20-30% of your total funds so that when a big market movement occurs, you won’t get wiped out.
2. Set stop losses, don’t hold onto losing positions, recognize your mistakes and run
Not setting a stop loss = waiting to die. You should think about how to exit if you make a mistake before opening a position; usually, the stop loss is set within 3-5% of the opening price.
If you are wrong, admit defeat; holding onto a losing position will only make your losses worse, leading to direct liquidation.
3. Keep a close eye on the liquidation price, don’t let the system harvest you
Contracts have a liquidation price; being too close to this price means handing your life over to the market.
If you have enough funds, appropriately add some margin, but don’t mindlessly increase your position, or you will accelerate your downfall.
4. Don’t get emotional when you lose, don’t increase your position impulsively
Wanting to recover losses after losing money will lead to a 99% chance of losing even more.
Go with the trend; don’t force it in a volatile or one-sided market; increasing your position against the trend is basically giving away your money.
5. Spot + contracts, learn to hedge
If you hold BTC or ETH long-term, you can consider opening hedge positions:
Holding BTC, bearish in the short term? Open a short hedge to reduce losses.
Holding ETH, want to earn more? Make a moderate long position, but keep the position small, and leverage should be stable.
6. Stay away from altcoins, avoid high-risk ones
Small coins have large fluctuations and can liquidate you in minutes; mainstream coins (BTC, ETH) are more stable.
During extreme market conditions (sharp rises and falls), avoid high leverage; otherwise, you will graduate directly.
7. Don’t go all in at once, entering in batches is safer
Do not fill your position at once; build your position in batches and gradually increase your stake. Even if the market fluctuates violently, there is room for adjustment, and you won’t be wiped out immediately.
Survive first, then you have a chance to turn things around.
The biggest fears in contracts are heavy positions, holding onto losing trades, and emotional trading. Control your position well, set strict stop losses, and don’t recklessly use leverage, or you will get slapped down by the market!
Daily focus: RPL LISTA SOPH
