Five Fatal Mistakes Newbies Make When Trading Contracts and Getting Liquidated
New to Contract Trading and Getting Liquidated? 90% of It Is Due to These Five Fatal Mistakes!
Clearly Following the 'Expert', Why Do You Get Liquidated Every Time You Trade Contracts? In Fact, the Issues May Lie in These Five Key Points Below. Avoiding Them Is Essential to Survive Before Thinking About Profit!
1. Leverage Is Too High to Control.
Problem: Newbies Always Want to 'Double Up' and Open Full Positions with 50x or 100x High Leverage, Leading to Liquidation with Just a 1% Market Fluctuation.
Data Comparison:
5x Leverage: Allows for 20% Fluctuation, Low Liquidation Probability
10x Leverage: Allows for 10% Fluctuation, Medium Liquidation Probability
50x leverage: only allows a 2% fluctuation, very high probability of liquidation.
Correct practice: Beginners are advised to start with low leverage of 3-5 times, safety first.
2. Not setting stop-loss, holding on stubbornly.
Classic death method:
“Wait a little longer, it will go back up” → The losses keep increasing.
“Lost 50%, cutting losses is too painful” → Eventually loses all 100%.
Correct practice: Set a fixed stop-loss point (e.g., 3%) immediately after opening a position, and use a trailing stop-loss (gradually move the stop-loss line up after making a profit to lock in gains).
3. Full margin betting, everything goes to zero.
Wrong mindset: “Opportunities are rare, All in!” or “Just play this one,” resulting in a market reversal, directly going to zero.
Position management formula:
"Maximum single position = Principal × 2% / Leverage multiple"
For example: 10,000 USDT principal, 10x leverage, single position opening not exceeding 200 USDT.
Correct practice: Single trade not exceeding 5% of total funds, diversify investments, avoid putting all eggs in one basket.
4. Emotional trading, chasing highs and cutting losses.
Typical performance:
FOMO (Fear of Missing Out): Chasing high positions during a surge, resulting in buying at the peak.
Panic selling: Selling at low prices during a plummet, only to see a rebound right after selling.
Data: >80% of liquidations occur during extreme market volatility, leading to erroneous operations due to loss of control over emotions.
Correct practice: Prepare a trading plan in advance and strictly follow it, avoid staying up late monitoring the market, reduce emotional interference.
5. Not understanding the exchange's tricks, getting 'spiked' and liquidated.
Common tactics:
Spike: Instantaneous price drop/rise, triggering a large number of stop-loss orders and quickly returning to the original price.
Slippage: Under extreme market conditions, the actual transaction price differs greatly from the expected price.
Correct practice: Choose mainstream, reputable exchanges, and avoid trading during major news events (like Federal Reserve meetings) or extreme market volatility.$BTC
