Why do you always get liquidated when trading futures? You must know these 3 truths!
Don't blame the market for screwing you; liquidations are your own fault! Ten years of experience tell you that liquidations aren't just luck; they're the result of a failure to grasp the true essence of trading!
1⃣ Leverage ≠ Risk; Position Size is the key!
With 100x leverage and a 1% position size, the risk is equivalent to a full spot position.
Formula: Risk = Leverage × Position Size.
Experts use 20x leverage, with a single position size no larger than 2%, and haven't experienced a liquidation in three years!
2⃣ Stop-loss orders aren't losses; they're account insurance!
If you don't stop-loss orders if you lose more than 5%, a liquidation is inevitable.
Professional traders' rule: Single losses must be ≤ 2%. Only by protecting your principal can you have a chance.
3⃣ Rolling positions ≠ All-in; compounding is king!
Only use 10% for your initial position; if you make a 10% profit, use that profit to increase your position.
For example, with a capital of 50,000 yuan, start with a position of 5,000 yuan and steadily increase your position, your safety margin will increase by 30%.
Risk Control Formula:
Total Position ≤ (Principal × 2%) ÷ (Stop Loss × Leverage)
Example: With a capital of 50,000 yuan, a 2% stop loss, and 10x leverage, your maximum position size is 5,000 yuan.
Profit-Taking Rule:
At 20% profit, take 1/3 off; at 50% profit, take another 1/3 off; set a stop loss on the remaining position.
Avoid Fatal Minefields:
❌ Holding a position for more than 4 hours will result in a 92% margin call rate.
❌ High-Frequency Trading will result in a 24% loss of capital.
❌ Failing to Take Profits in a Timely Manner will result in an 83% profit loss.
The Essence of Trading:
With a 34% win rate, a 2% stop loss, and a 20% take profit, you can make money!
Control losses, trade with discipline, and profits will flow naturally!
Want to learn about stable contracts? Follow us and we'll teach you!
