Why is it that trading contracts always leads to liquidation?

Why does contract trading always result in liquidation? It's not due to bad luck; it's because you fundamentally misunderstand the essence of trading! This article, distilled from ten years of trading experience, presents low-risk principles that will completely change your perception of contract trading — liquidation is never the market's fault; it's a time bomb you've set yourself.

Three Major Truths That Disrupt Perception

Leverage ≠ Risk: Position Size is the Lifeline

Using 1% position with 100x leverage, the actual risk is only equivalent to 1% of a full position in spot trading. A student used 20x leverage to trade ETH, investing only 2% of the principal each time, with three years and no liquidation record. Core formula: Real Risk = Leverage Ratio × Position Size.

Stop Loss ≠ Loss: The Ultimate Insurance for Your Account

During the market crash on March 12, 2024, 78% of the accounts that were liquidated shared a common characteristic: they did not set stop-loss despite losses exceeding 5%. Professional traders' rule: single trade losses should not exceed 2% of the principal, equivalent to setting a "circuit fuse" for the account.

Rolling Positions ≠ All-In: The Correct Way to Compound

Step-by-Step Position Building Model: First position 10% for trial, use 10% of profits to increase position. With a principal of 50,000, the first position is 5,000 (10x leverage), and every 10% profit, add 500 to the position. When BTC rises from 75,000 to 82,500, the total position only expands by 10%, but the safety margin increases by 30%.

Institution-Level Risk Control Model

Dynamic Position Formula

Total Position ≤ (Principal × 2%) / (Stop Loss Margin × Leverage Ratio)

Hedging Insurance Mechanism

When holding a position, use 1% of the principal to purchase Put options, which have been tested to hedge against 80% of extreme risks. During the black swan event in April 2024, this strategy successfully saved 23% of account net worth.

Data Evidence of Fatal Traps

Holding a Position for 4 Hours: Probability of Liquidation Increases to 92%

High-Frequency Trading: Average 500 trades per month results in a 24% loss of principal

Greed in Profits: Failing to Take Profits in Time Leads to 83% Profit Reversal

Four, Mathematical Expression of Trading Essence

Expected Profit = (Win Rate × Average Profit) - (Loss Rate × Average Loss)

When setting a 2% stop loss and a 20% take profit, only a 34% win rate is needed to achieve positive returns. Professional traders achieve over 400% annual returns through strict stop-loss (average loss of 1.5%) and trend capture (average profit of 15%).

Ultimate Rule:

Single Loss ≤ 2%

Annual Trades ≤ 20

Win-Loss Ratio ≥ 3:1

70% of the Time in Cash Waiting

The essence of the market is a probability game; remember: control your losses, and profits will run. Establish a mechanical trading system, allowing discipline to replace emotional decision-making, which is the ultimate answer to continuous profitability. #亚洲家族办公室加密资产配置