In trading, liquidation occurs when account funds are insufficient due to market fluctuations, leading to forced closure of positions. This is often related to not setting reasonable stop-losses, where a stop-loss is a pre-set price point that, when reached, automatically closes the position to limit losses. However, liquidation is not a stop-loss strategy but rather a result of failure in risk management.

Proper capital and position management are key to avoiding liquidation. Traders need to allocate funds based on their risk tolerance and strategy, control positions, and avoid high leverage that amplifies risks. At the same time, they should flexibly adjust their positions with market fluctuations, building a complete trading system that includes capital management and trading rules.

Traders must continuously learn and optimize their systems to adapt to market changes. In summary, avoiding liquidation requires reasonable capital management, position control, and stop-loss setting, developing a personalized trading plan, and continuously optimizing the system to ensure steady progress in the trading market.

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