Why do you always get liquidated as soon as you trade contracts? Clearly following the 'expert' operations, yet you always lose all your capital? In fact, 90% of liquidations are due to not understanding these 5 key issues!
1. Leverage is too high, dying too quickly
Core issue: Beginners always want to 'double up in one go', opening positions with 50x or 100x leverage under full margin conditions, resulting in liquidation as soon as the market fluctuates by 1%-2%.
Data comparison:
| Leverage | Allowed Fluctuation Range | Liquidation Probability |
| 5x | 20% | Low |
| 10x | 10% | Medium |
| 50x | 2% | Extremely High |
💡 Correct approach: Beginners are advised to use 3-5x leverage, focus on survival before talking about making money!
2. No stop-loss, stubbornly holding on
Classic failures:
- "Just wait, it will definitely come back up!" → Result: it keeps falling deeper until liquidation.
- "I've already lost 50%, cutting losses is too painful!" → In the end, loses 100%.
💡 Correct approach:
- Fixed stop-loss: set a stop-loss immediately after opening a position (e.g., 3%-5%).
- Trailing stop-loss: gradually raise the stop-loss line after making a profit to lock in profits.
3. Full margin gamble, zeroing out in one go
Common mistakes among beginners:
- "Rare opportunity, all in!" → Result: market reverses and liquidation occurs.
- "I'll just play this one round, if I win, I won't play again." → Usually ends up losing everything.
Position management formula:
`Maximum single position = Capital × 2% / Leverage`
(Example: $10,000 capital, 10x leverage → single position not exceeding $200)
💡 Correct approach:
- Each position should not exceed 5% of total capital.
- Diversify trades to avoid a single trade determining success or failure.
4. Emotional trading, chasing highs and cutting losses
Typical behaviors:
- FOMO (Fear of Missing Out): seeing a surge, chasing high prices → Result: gets burned.
- Panic selling: scared during a crash, selling at low prices → just sold and then rebounds.
Data statistics:
> 80% of liquidations occur during severe market fluctuations when beginners operate under emotional control issues.
💡 Correct approach:
- Formulate a trading plan and strictly adhere to it.
- Avoid staying up late watching the market to reduce emotional interference.
5. Not understanding the exchange's tricks, getting liquidated by 'spikes'
Common tactics of exchanges:
- Spike: prices suddenly plunge/surge, triggering a large number of stop-loss orders before quickly recovering.
- Slippage: during extreme market conditions, the actual transaction price differs greatly from expectations.
💡 Correct approach:
- Choose mainstream exchanges.
- Avoid trading during extreme market conditions (e.g., Federal Reserve meetings, large liquidations).
