Why do beginners get liquidated when trading contracts?
Why do you get liquidated as soon as you trade contracts? Clearly following the operations of 'experts', yet always losing your principal? In fact, 90% of liquidations are due to not understanding these 5 key issues!
1. Leverage too high, death too fast
Core issue: Beginners always want to 'double up in one go', often using 50x or 100x leverage in full margin situations, and as a result, with just a slight market fluctuation of 1%-2%, they get liquidated.
Data comparison:
| Leverage | Allowed Fluctuation Range | Liquidation Probability |
| 5x | 20% | Low |
| 10x | 10% | Medium |
| 50x | 2% | Extremely High |
Correct approach: Beginners are advised to use 3-5x leverage; survive first before talking about making money!
2. No stop loss, stubbornly holding on
Classic way to die:
- "Just wait a bit longer, it will definitely go back up!" → Result: it keeps falling deeper until liquidation.
- "I've already lost 50%, cutting losses is too painful!" → In the end, lose 100%.
Correct approach:
- Fixed stop loss: Set a stop loss immediately after opening a position (e.g., 3%-5%).
- Trailing stop loss: Gradually raise the stop loss line after making a profit to lock in profits.
3. Full margin all-in, - returning to zero
Common mistakes made by beginners:
- "Opportunities are rare, All in!" → Result: the market reverses and they get liquidated directly.
- "I’m just playing this one, if I make a profit, I won't play anymore." → Usually ends up losing everything and leaving.
Position management formula:
- Maximum position per trade = Principal x 2% / Leverage (e.g., 10,000 U principal, 10x leverage → single trade not exceeding 200 U)
Correct approach:
- Each trade should not exceed 5% of total funds.
- Diversify trades to avoid a single trade determining life or death.
4. Emotional trading, chasing highs and cutting losses
Typical behavior:
- FOMO (Fear of Missing Out): Seeing a price surge, buying at a high → Result: getting caught at the top.
Correct approach:
- Create a trading plan and strictly adhere to it.
- Avoid staying up late to watch the market, reduce emotional interference.
5. Not understanding exchange tricks, getting 'spiked' and liquidated
Common tactics of exchanges:
- Spiking: Instant price drops or surges that trigger a large number of stop-loss orders and then quickly recover.
- Slippage: In extreme market conditions, the actual transaction price differs greatly from the expected price.
Correct approach:
- Choose mainstream exchanges. #美联储取消创新活动监管计划 #加密市场回调