Introduction to Trading Types Why Do Contracts Always Liquidate?

It's not bad luck; you fundamentally don’t understand the essence of trading! This article encapsulates a decade of trading experience with low-risk principles that will completely overturn your understanding of contract trading — liquidation is never the market's fault, but rather a time bomb you've set yourself.

Three Major Truths That Challenge Your Understanding

Leverage ≠ Risk: Position Size is the Lifeline

Using 1% of your position with 100x leverage, the actual risk is only equivalent to 1% of a full position in spot trading. A certain student operated ETH with 20x leverage, investing only 2% of the principal each time, maintaining a zero liquidation record for three years. Core formula: Actual Risk = Leverage × Position Ratio.

Stop Loss ≠ Loss: The Ultimate Insurance for Your Account

During the 312 crash in 2024, the common trait of 78% of liquidated accounts: losses exceeding 5% without setting a stop loss. Professional traders' iron rule: a single loss must not exceed 2% of the principal, equivalent to setting a "circuit fuse" for the account.

Rolling Positions ≠ All In: The Correct Way to Compound

Ladder Positioning Model: Start with a 10% trial position, increase by 10% of the profit. Starting with a principal of 50,000, the initial position is 5,000 (10x leverage), and every time a profit of 10% is made, 500 is added to the position. When BTC rises from 75,000 to 82,500, the total position only expands by 10%, but the margin of safety increases by 30%.