Why do people still play in the cryptocurrency futures market even after liquidation?
Futures are the most dangerous yet the easiest means to get rich in the cryptocurrency world. Why do countless people continue to engage knowing the high liquidation rate? Because behind futures lies a desire amplifier brought by leverage.
I entered the cryptocurrency market with a capital of 50,000, and after more than a decade of ups and downs, my assets have grown to over 45 million. The experiences along this journey have taught me: futures are not an ATM, but a battlefield for realizing knowledge.
Here are my personal core trading experiences, hoping you can pay a little less tuition:
1. Why do most people get liquidated?
Too high leverage
With 100x leverage, a 1% fluctuation can lead to liquidation.
It is recommended for beginners not to exceed 20x and advanced traders not to exceed 50x.
Heavy positions
Do not open a single position exceeding 1% of total capital, and total margin for all positions should not exceed 20%.
For a capital of 10,000, using 10x leverage, single position margin ≤ 100, total position ≤ 2,000.
No stop-loss or take-profit
Stop-loss setting: When losing a certain amount, you must exit to avoid holding the position.
Take-profit setting: Close the position immediately upon reaching the target, do not be greedy.
Frequent trading and emotional decisions
The futures market spends 70% of the time in fluctuation, frequent operations will inevitably lead to losses.
2. Why are there still people willing to play?
Temptation of huge profits
If used well, futures can greatly increase capital utilization.
Some turned 10,000 into 10 million, but it relied on system + discipline, not luck.
Systematic strategy
Control positions, control losses, control rhythm, none can be omitted.
For those with a mature trading system, futures are a tool to amplify profits.
Advanced strategies
Hedging: placing orders in both directions to profit from both rises and falls.
Step-by-step position increase: enter in batches to lower costs.
Collecting funding fees: in extreme market conditions, profit from counterparty positions through reverse holdings.
3. Three concepts every beginner should understand:
Leverage is not a multiplier, it’s a meat grinder.
Stop-loss is more important than making money.
Capital management determines whether you can survive.
4. A message for everyone still struggling with futures:
Never treat futures as an opportunity to turn things around; they are only suitable for adding to your success.
Before real trading, practice on a demo account for 3 months.
Making money in futures does not rely on 'lucky strikes', but on 'patience + discipline + strategy'.
Futures are a place for retail investors to perform alchemy, but they could also be your grave. If you want to survive here, you must first learn how not to die.
