Are you still playing with leveraged trading? Then you must remember these 5 'Lifesaving Rules', or liquidation is just a matter of time!
If you dare to enter the crypto world and play with leverage, you need to know that this market is never merciful! Before you face liquidation,
let’s take a look at how those who can survive in high leverage actually do it:
【1】Leverage is not better the higher it is; the higher it is, the faster you die
Newbies especially take note: 3x leverage is enough.
For example, if you have 1000 USDT in your account: with 3x leverage, you can control a position of 3000 USDT, but if you greedily go up to 10x, that’s a position of 10,000 USDT. Do you know how easy it is to get liquidated?
You’re not here to gamble with your life; learn to 'survive' first before you can talk about doubling your money.
【2】Not setting a stop-loss = Actively waiting for liquidation notice
You must set a stop-loss when opening a position, or else you are just giving away money.
For example, if you go long on BTC with 100,000 USDT, remember to set your stop-loss at 98,000. It’s better to take a small loss and exit than to watch helplessly as your position gets liquidated.
The market is not your father; it doesn’t care how much you lose!
【3】The bottom line for liquidation is not for you to step on, but to keep you away
The exchange may maintain a margin rate of 0.5%, but smart people prepare at least 3-5 times the buffer! If the market suddenly crashes and you don’t have any funds to add to your position? Liquidation can happen in a second. Received a system notification that you're 'close to the liquidation line'? Don’t pray; hurry up and add margin!
【4】Learn to read the 'Liquidation Heatmap'; it’s like seeing a battlefield full of corpses in advance
With the liquidation heatmap, you can see which price levels have the most liquidation orders lurking. For instance, if the heatmap shows: 98,000~100,000 USDT is a high liquidation area, you’d better stay away from this gate of doom.
【5】Never put all your bullets into one all-in bet
Don’t go all in on one coin at once unless you’re addicted to liquidation.
For example: if you have 5,000 USDT,
You can allocate: 2,500 USDT to BTC
2,500 USDT to ETH
Diversifying trading pairs + diversifying leverage is the best way to spread risk. Remember, even SOL and ETH can drop 30% in a bear market, and if your leverage is too high, don’t expect to have a way back.
Do you want to make quick money in the crypto world with leverage? Sure!
But please remember: The key to making money is not betting to win, but first learning not to die!
