Four traps of liquidation
1. High leverage
High leverage is the source of loss and liquidation! Although profits grow quickly when you do it right. But if you continue to use high leverage, you will definitely lose everything! According to my experience, as long as you use high leverage, it is only a matter of time before you lose everything. Because you will continue to use it if you do it right. If you make a big loss when you make a mistake, you will use high leverage to try to recover the loss quickly. If you want to survive, you must absolutely avoid high leverage!
2. Carrying orders
If the direction is wrong, you don’t stop loss, and even cover the position (speeding up the liquidation process). Cancel and modify the stop loss price many times, resulting in losses.
3. Frequent transactions with high leverage
Loss too much at a time, want to recover the loss on the same day. Like a gambler who loses his eyes, under high leverage, he finds that he opened the wrong position as soon as he opens the position, and the loss is huge, so he stops the loss. Repeat the operation several times, and the loss is gone.
4. Imagination + obsession
According to the price trend, it has been proved that the direction is wrong. But he does not admit that he is wrong, thinking that the turning point is coming soon. So you either have to cover your position, or change the stop loss price to hold on, or open again after the stop loss. Or a combination of these. You make orders against the trend, and end up losing all your money.
