Futures can be exciting. They promise huge profits, but their risks are equally severe. The most painful loss is liquidation when the exchange closes your position and withdraws most of your balance. In reality, liquidation can be avoided if you focus on safety first.
Control your leverage
Using high leverage is like walking a tightrope. The higher you go, the less error you can afford that could lead to your loss. Many new traders are attracted to 50x or 100x, but even a small move against you will liquidate the position. Professional traders usually prefer very low leverage, often 5x or less, as it gives them room to survive market fluctuations.
Protect yourself with exit levels
The stop loss is not a suggestion; it is your shield. Instead of waiting for the system to liquidate your position, set an exit point that allows you to take a reasonable loss. This way, you close the trade on your terms and keep your capital safe for the next opportunity.
Trade with balanced size
Putting all your money in one position is risky. A smart trader diversifies their capital, using only a portion of it for futures, leaving the rest untouched. By carefully managing size, one bad trade will never destroy your account. Staying in the game is always more important than speed.
Control your emotions
Fear, greed, and anger are the biggest enemies of trading. Many liquidations occur because traders break their own rules - chasing pumps, doubling down, or trading in a panic. A disciplined trader always follows a plan, accepts losses calmly, and waits for the next setup.
Summary
Futures contracts are powerful, but they are also risky. To avoid liquidation, keep a low leverage level, always use stop loss orders, manage your position size, and stay calm. The primary goal in trading is not to win every trade - but to stay in the market long enough to allow profits to grow consistently.