Why do newbies get liquidated when trading contracts?

Why do you lose money as soon as you enter the market? Clearly, you are closely following the operations of the "masters", so why do you end up with nothing? In fact, the vast majority of people Get Liquidated not due to bad luck, but because they haven't understood these five fatal misconceptions!

1. The leverage is set too high, and once the market reverses, it will get liquidated.
Fundamental issue: Many newbies always want to "get rich overnight", pouring all their funds into the market and directly using 50x or 100x leverage. What’s the result? With market fluctuations of just 1%-2%, the account can be wiped out instantly.
It is clear at a glance from the data comparison:

Leverage Multiple Allowable Reverse Fluctuation Range Get Liquidated Risk
5x about 20% low
10x about 10% middle
50x only 2% extremely high

Correct approach: Newbies are advised not to use more than 5x leverage, prioritize survival first, and then seek profit.

2. Holding on to losses, always fantasizing about breaking even.
Typical Psychological Activities:

· "Just hold on a bit longer, it will rebound soon!" → As a result, the situation gets worse and worse until it gets Liquidated.
· "I've already lost half, selling now is too much of a loss" → in the end, just watched it Get Liquidated.
Response Strategy:
· Fixed Stop Loss: Set a stop loss line before entering the market, for example, if the capital loses 3%-5%, you must exit.
· Trailing Stop-Loss: Gradually raise the stop-loss level after making a profit to secure existing gains.

3. Always going all in and losing everything in one go.
Common Misconceptions:

· "This wave is stable, all in!" → As a result, one wrong direction, directly goes to zero.
· "Just play one last time, if you make a profit, then stop" → often becomes the last trade.
Reasonable Position Formula Reference:
Single Maximum Opening Position ≈ Total Capital × 2% ÷ Leverage Ratio
(For example: 10,000 USDT principal, 10x leverage, each order not exceeding 200 USDT)
Correct practice:
· A single transaction should not exceed 5% of the total funds.
· Diversification of multiple varieties to avoid losing everything due to a single mistake.

4. Losing Control of Mindset, Frequently Chasing Highs and Cutting Losses
Common Scenarios:

· FOMO (Fear of Missing Out): Seeing a big surge, rushing in regardless → Resulting in buying at the peak.
· Emotional fluctuations: Revenge trading after consecutive losses, losing even more.
Improvement method:
· Make a trading plan in advance and do not change it arbitrarily.
· Reduce staying up late to monitor the market; a calm mindset allows for rational decision-making.

5. Not understanding the platform mechanism often leads to being "spiked" and cleaned out.
Common Tricks:

· Pinning Market: Prices suddenly surge or plummet, triggering a large number of stop-loss orders before quickly returning to the original price.
· Severe Slippage: In extreme market conditions, the actual transaction price deviates significantly from the set price, amplifying losses.

If you often trade without direction and want to steadily recover your capital and gradually make profits, you are welcome to come and communicate with us. We have real-time strategies and risk control methods here to help you avoid these pitfalls and walk more steadily.