How to avoid liquidation in futures trading? Many people mistakenly believe that futures trading is about 'throwing dice'; in reality, those who can consistently earn rely not on luck, but on systems, discipline, and risk control. Today, I will condense my experience from executing over 300 trades into three key points. As long as you read carefully, you can avoid at least 90% of the detours.

First point: Do not blindly guess the rise and fall; direction is just a probability event.

Many people make a big mistake when entering the market - treating going long or short as gambling. True traders do not make emotional bets on direction. They first assess the trend, then decide on the direction; if uncertain, they choose to wait and observe. Remember: 'Futures trading emphasizes certainty, not excitement.'

Traps to avoid:

Leverage is an amplifier, not a money-making machine. For example, with 10x leverage, a 1% price increase can yield 10% profit, but if it drops by 1%, the principal could be wiped out. Trading based on feeling is not trading, it's just giving away money.

What you need to do:

Before entering the market, force yourself to ask three questions:

1. Is the current trend clear? (Up/Down/Consolidation)

2. Are there news or events that may affect the market?

3. If I'm wrong, where do I stop loss?

The safest way is: confirm a pullback after a breakout before entering the market. Even if you enter a bit later, it's much better than getting slapped in the face by the market from the start.

Second point: Rely on strategy rather than gut feeling.

Ordinary people rely on 'feelings' in futures, while veterans rely on systems, strategies, and experience.

Here are three practical strategies suitable for beginners:

4. Grid Quantification - Suitable for volatile markets, when prices fluctuate within a narrow range. For example, when Bitcoin hovers between 60K and 65K, grid strategies are most suitable. Set multiple buy and sell orders; every time the price rises or falls to a certain extent, transactions are automatically executed, allowing for 'buy low and sell high' in market fluctuations. It is recommended to use small positions and 3x leverage, with single grid profits reaching 10%-15%, and daily returns of 2%-5% are not a dream.

5. Funding Rate Arbitrage - This is a zero-risk arbitrage opportunity. By simultaneously going long on spot and short on perpetual contracts, you can lock in the interest rate spread. For example, if the funding rate is 18% and the spot annual return is 2%, then the interest rate spread is 16%. In actual trading, an investment of 100,000 USD can yield an annual return of 16,000 USD, with almost no volatility risk.

6. Two-way Hedging - This is suitable when the market direction is unclear before major events (like Federal Reserve meetings, CPI releases). The method is to simultaneously open equal amounts of long and short positions, and once the market direction becomes clear, stop loss on one side and keep the other side to profit. Remember, it’s not about predicting rises and falls, but about seizing opportunities for market explosions.

Third point: Strictly control risk to talk about profits.

In simple terms, survival is the primary goal. If you can’t even avoid liquidation, then any profit is just fleeting.

Position rules:

Starting position should not exceed 1%, and at most not exceed 3%. Only add positions after making a profit; do not place heavy bets from the start.

What to do when facing continuous losses?

Reduce positions or be in cash; never allow yourself to increase positions out of spite in an attempt to recover losses.

Stop loss principle:

Set stop loss levels when opening positions, controlling within 2%-3%. Even in the best markets, do not expect miracles. If a single trade profits over 5%, immediately raise the stop loss to the entry price to ensure no loss.

Emotional management:

If you incur three consecutive losses, take a forced break for a day. When emotions are unstable, making money is luck, while losing money is the norm. It is recommended to keep an 'emotional trading journal', writing down the reasons for opening positions, emotional states, and stop loss plans for each trade, using data to turn subjective trading into objective.

Survival principle:

Living expenses must be reserved separately for a year, regardless of how much capital is in the account. Never gamble with 'meal money' on coin prices; that is not trading, it is self-destruction.

Summary:

"Understanding the market is a skill; controlling your hands is wisdom." In futures trading, it may seem like you are earning from price fluctuations, but in essence, what you earn is: system, discipline, and stability.

It is recommended that beginners start with a demo account, at least conduct 100 trades, master risk control rules, and then trade with real money.

Finally, don't envy others who flip their accounts; the discipline and experience behind them may not be visible to you. Learn to 'not lose' first, then talk about how to profit.