The crying tone of the phrase "Bro, it’s all gone, completely gone..." still echoes in my ears. Last week, a trader sent a voice message, filled with despair. He entered the market with 10,000 yuan, betting it all on a 10x leverage to go long on mainstream tokens. As a result, the market only pulled back by 3 percentage points, and his account went from a slight profit to being completely wiped out.

I looked at his trading screenshot, and 95% of the principal is locked in margin, leaving no buffer at all. This is not called investing; this is called gambling—charging into a powder keg with a torch.

Such stories are unfolding every day in the coin circle. Just on September 25th this year, during the pullback of Ethereum, which fell more than 4%, nearly 140,000 people in the entire crypto market were liquidated at the same time, with total losses reaching $441 million. By the time of the drop on October 30th, it was even worse: 240,000 people were liquidated, and 7.8 billion yuan in funds evaporated within minutes.

**Why is liquidation so frequent?**

Many people have a deep-seated misconception in their minds: "The more principal invested, the more one can withstand volatility." Those who say this have twisted basic investment logic.

The reality is just the opposite. Suppose you have 1000, and you use 900 to open a 10x leverage position. If the market moves against you by just 5 percentage points, your account will be completely wiped out. However, if you only use 100 to do the same leverage, you need to lose 50% to get liquidated. In other words, what determines survival is never whether to go all in, but rather how much you have invested in a single position within that all-in amount.

The deadly combination in the cryptocurrency market is these two: extreme high volatility meets extreme high leverage. Volatility determines the intensity of the market, while leverage amplifies the impact of each fluctuation on the account. When the two are combined, it's like stacking explosives on a shaky balance — the slightest breeze can set off an explosion.

**But the essence of risk is actually very simple.**

Most of those who are liquidated are not defeated by the market but by their own greed. They see a certain coin with a good increase, get carried away, and bet all their chips on it, even adding leverage to "amplify their profits." This way of operating leaves no room for maneuver once the market reverses—accounts go directly from black to blood red.

Traders who truly understand risk control never play like this. Their principle is very simple: control each position to within 10% of the total capital, always leaving themselves with 9 opportunities to make mistakes. This way, even if they experience consecutive losses, the account will not be destroyed overnight.

Leverage itself is not a monster; the problem lies in how to use it. With 1x leverage, you can confidently explore market opportunities; with leverage above 5x, you are no longer investing but playing a probability game. And when leverage reaches above 10x, you are basically gambling on a very narrow market window—if the window shifts slightly, all your imagined possibilities disappear.

The most heart-wrenching thing is that every newcomer will hear these truths, but those who truly survive are often those who have learned lessons from real experiences of liquidation. Some tuition fees are destined to be paid with real money.