5 Major Traps That 90% of Contract Traders Easily Fall Into, A Must-Read Before Liquidation
In the ever-changing cryptocurrency trading market, massive losses often do not stem from sudden market shifts, but rather from traders themselves opening the 'Pandora's Box.' The following five 'deadly traps' are like cracks at the edge of an abyss, consuming countless traders' principal and confidence.
1. Holding Positions Without Stop Loss → The Slow Suicide of Boiling a Frog
Essence of the Problem: When faced with adverse market conditions, traders hold onto hope, fantasizing that 'the rebound is just a second away.' They refuse to acknowledge their mistakes and allow losses to continue to expand.
Deadly Consequences: Minor losses evolve into unbearable massive losses, not only eroding the account but potentially ending the trading career. The account shrinks like a dam bursting, unstoppable.
2. Full Margin with Leverage → Dancing on the Edge of a Knife, Burning Oneself
Essence of the Problem: Betting all capital, even using high leverage, in an attempt to 'make it all in one go.' Essentially, it's gambling everything on a single bet.
Deadly Consequences: With even slight adverse market fluctuations, the enormous risk exposure can instantly breach the account's bottom line. The risk of 'liquidation' follows closely, turning wealth into nothing in an instant.
3. Chasing Highs and Selling Lows → The Fate of Retail Investors in Market Noise
Essence of the Problem: Emotions are swept away by short-term fluctuations (especially extreme ups and downs), fervently chasing highs and panic selling at lows.
Deadly Consequences: Perfectly misstepping the market rhythm, becoming a target for being 'harvested.' Frequently contributing to transaction fees, the account continues to bleed in repeated ineffective trades.
4. Revenge Trading → Actively 'Giving Money Away' Under Out-of-Control Emotions
Essence of the Problem: After a single loss, the mindset becomes unbalanced, dominated by the urgent desire to 'recoup the losses.' Ignoring rules, impulsively opening positions, with trading frequency and risk dramatically increasing.
Deadly Consequences: Emotions dictate actions, falling into the vicious cycle of 'the more you lose, the more you gamble; the more you gamble, the more you lose.' At this point, the actions are akin to handing over funds willingly to the market.
5. Bottom Fishing Against the Trend → Trying to Catch a Falling Knife with Bare Hands
Essence of the Problem: In a clear downtrend, fantasizing about accurately catching the 'lowest point,' attempting to counteract market momentum.
Deadly Consequences: The 'bottom' is unfathomable, and the inertia of the decline is massive. Bottom fishers are often crushed by the subsequent overwhelming selling pressure, suffering heavy losses in their accounts.
