The fundamental reason for contract liquidation is that you are using money that does not belong to you, which is high leverage.
Suppose you have 1000u, but you use 100u with 100x leverage, which means the funds you are actually using is 10000u, and you borrowed 9000u. This 9000u does not belong to you, and as long as there is a 10% fluctuation, your principal of 1000u is gone.
As is well known, in this circle, a 10% fluctuation is like a drop of water.
A contract is just a tool; after all, when you are bearish, you can only open a short position with leverage. In the spot market, you can only buy.
The tool is not wrong; it depends on how you use it. A knife can be used to kill enemies but can also hurt yourself.
To excel in contracts, learning to control your position is key; otherwise, random operations and reckless moves will leave you helpless, even if Buffett comes to save you.
Control your position and take it slow, just like👇$SKL short position; one trade can earn a few K U, and you can achieve it too.
