Why do you always get liquidated when trading contracts? Clearly following the 'expert's' trades, yet you consistently lose all your principal? In fact, 90% of liquidations occur due to misunderstanding these 5 key issues!
I. Excessive leverage leads to quick demise
Core Issue: Newbies always want to 'double their money', opening 50x or 100x leverage with their entire capital; as a result, a slight 1%-2% market fluctuation leads to immediate liquidation.
Data Comparison:
|Leverage|Allowed Fluctuation Range|Liquidation Probability|
| 5x |20% |Low
| 10x |10% |Medium
| 50x |2% |Very High
Correct Approach: Newbies are advised to use 3-5x leverage, survive first before discussing profits!
2. Not setting stop losses, holding on stubbornly
Classic Death Method:
- 'Just wait a bit, it will definitely bounce back!' → Resulting in deeper and deeper losses until liquidation.
- 'I have already lost 50%, cutting losses is too painful!' → Eventually losing 100%.
Correct Approach:
- Fixed Stop Loss: Set a stop loss immediately after opening a position (e.g., 3%-5%).
- Move Stop Loss: Gradually raise the stop loss line after making a profit to lock in profits.
3. Full margin betting, - all going to zero
Common Mistakes for Beginners:
- 'Opportunities are rare, All-in!' → Resulting in the market reversing and being liquidated directly.
- 'I will just play this one, if I make a profit, I will stop.' → Usually ends up losing everything.
Position Management Formula:
Maximum single position = capital x 2% / leverage (e.g., 10,000 U capital, 10x leverage → single position not exceeding 200 U)
Correct Approach:
- Do not open a position exceeding 5% of total funds each time.
- Diversify trades to avoid a single trade determining life or death.
4. Emotional trading, chasing highs and cutting losses
Typical Performance:
- FOMO (Fear of Missing Out): Seeing a sharp rise, chasing high positions → Resulting in being left holding the bag.
Correct Approach:
- Formulate a trading plan and strictly execute it.
- Avoid staying up late to watch the market, reduce emotional interference.
5. Not understanding the exchange's tricks and getting liquidated by 'spikes'
The market changes rapidly, find
