In the last hour alone, the cryptocurrency market witnessed $300 million in liquidations. The root cause? Many traders lack proper trading knowledge and fall victim to unrealistic expectations set by influencers on platforms like TikTok, Instagram, or YouTube. These influencers often showcase impressive profits, leading novice traders to believe they can replicate the same results without understanding the strategies behind those trades.

The reality is that experienced traders often have well-crafted strategies, clearly defined entry and exit points, and strong risk management systems in place. Unfortunately, many retail traders jump into the market blindly, driven by FOMO (fear of missing out), and end up making costly mistakes. These missteps are often what lead to massive liquidations.

Key Strategies to Prevent Liquidation

1. Secure Your Profits Wisely

When your first take-profit (TP-1) level is reached, lock in a portion of your gains. Don’t wait for all targets to hit before taking action. Securing partial profits ensures that you walk away with something, even if the market reverses unexpectedly.

2. Practice Risk Management

Never over-leverage your trades. For example, if you have $200 in your trading account, limit your exposure to 5-10% per trade, or no more than $20. Entering 2-3 well-calculated trades with proper position sizing is far safer and more sustainable than risking your entire capital on one signal.

3. Patience and Discipline Are Non-Negotiable

Trading is a calculated endeavor, not a gamble. Success in trading comes from small, consistent wins over time—not from reckless attempts to hit it big. Just as you wait a month to receive your salary at work, you need to exercise the same patience when trading. Impulsive decisions often lead to costly errors.

Why Patience Is Critical

Trading is a long-term endeavor, not a get-rich-quick scheme. If you lose all your capital in one day due to poor decision-making, you won’t have anything left to trade with tomorrow. Protecting your capital should always be your top priority.

Stop-Losses: Your Safety Net

One of the most common mistakes traders make is holding onto losing positions, hoping for a recovery, while prematurely closing profitable trades out of fear. This approach is counterproductive.

Cut Losses Early: When a trade moves against you, close it with minimal losses instead of letting the losses grow.

Use Stop-Loss Orders: A stop-loss ensures that your losses are limited, allowing you to manage your risk effectively and focus on the next opportunity.

The Bottom Line

Trading isn’t about chasing quick profits—it’s about making smart, informed decisions. If you lack the patience, discipline, or understanding to manage your risks, trading may not be the right path for you. However, if you approach it with a clear strategy, careful planning, and a long-term mindset, you can achieve consistent success.

Stay safe, manage your risks wisely, and remember that trading is a marathon, not a sprint. Your future self will thank you for trading responsibly.

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