How My Loss Became Someone Else’s Ideal Entry Point

The first time I got liquidated, I chalked it up to bad luck 🍀. The second time, I figured I just made a mistake 🤦‍♂️. But after watching the price surge right after my position got wiped out—again and again—I started to wonder if there was more to the story. That’s when I stumbled upon the idea of cascading liquidations 💥.

In leveraged futures trading, every position has a liquidation price 📉. Once the market hits that level, the exchange steps in and forcefully closes the position—usually by selling into the market. Here’s the catch: when tons of traders are clumped around similar price levels, one liquidation can trigger another, and then another. Like falling dominos 🁢🁢🁢, each forced exit pushes the price even lower—not because the market changed its mind, but because the system automatically flushes out positions.

Big players and exchanges know exactly where these pressure points are 🔍. They can see the “liquidation heatmaps” and understand where retail traders are stacked with leverage. Sometimes all it takes is a small push in price to set off a chain reaction. That drop? It’s not random. It’s an opportunity—one they’re often ready to scoop up 🧠💸.

So I didn’t just lose a trade. I became someone else’s entry. In this game, your pain becomes their liquidity.

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