Are you still unaware of where you went wrong after getting liquidated? Congratulations, you are about to pay the most expensive tuition fee.
Many people make mistakes right from the first step when trading contracts.
👉 Opening a position with full margin and high leverage? If you don't get liquidated, who will?
👉 Using the same leverage for any cryptocurrency? Are you the god of the market?
True experts never blindly believe in 'fixed multiples'.
We only look at volatility, only at cycles, only at market rhythm, and then... each trade has a different multiple!
The majority of people get liquidated not because the market is wrong, but because they misuse leverage!
Let me give you an example to illustrate:
A certain cryptocurrency is currently priced at 100 USDT,
You open at 10x? Your 'liquidation space' is only a fluctuation of 10 USDT up or down.
You open at 20x? You have only 5 USDT left, it’s just like walking a tightrope.
You open at 2x? You can still fluctuate 50 USDT before liquidation, which is much more controllable risk.
This is common sense: the larger the multiple, the quicker the liquidation; the smaller the multiple, the longer the survival.
Before each trade, please think first, don’t choose multiples randomly like gambling!
💡 So what is the appropriate multiple to use?
The answer is two words: “Watch the market”!
How to play leverage for medium to long-term?
The longer the medium-term, the smaller the multiple!
The reason is simple: the longer the time, the greater the uncertainty, and the higher the probability of one-sided market movement.
Therefore, for long-term trades, you must leave yourself a larger 'space' to survive.
Do you use daily candlestick highs and lows to measure space? OK.
Using weekly candlestick or even 5-day line fluctuations to estimate larger levels of liquidation space? More stable!
Never use 'fixed multiples' to forcibly confront the market.
Before each trade, first 'measure volatility - measure range - calculate multiples'.
Tools are always more reliable than feelings.
Want to get rich quickly? That’s understandable, but you must first learn how not to die!
I have said too much already.
But still, the same saying: as the market changes, the multiples must also change!
