🧭Hi! I am Uncle Bird🦜. When the storm comes, more and more people in the cryptocurrency circle are liquidated. So why are so many people liquidated? The reasons for the liquidation of many people in the cryptocurrency circle involve many factors, among which the most important factors include:
1️⃣ Leveraged trading: Many traders use leverage to amplify their profits, but this also means that they take on greater risks. When the market reverses, leveraged traders may face huge debts, which may lead to liquidation.
2️⃣ Market volatility: The cryptocurrency market is highly volatile, which means that prices tend to change dramatically in a short period of time. This volatility can easily put leveraged traders in danger of liquidation.
3️⃣ Inaccurate technical analysis and forecasts: Many traders rely on technical analysis and forecasts to make trading decisions, but these methods are not always accurate. When the forecast is wrong, traders may suffer huge losses, leading to liquidation.
4️⃣ Emotional fluctuations: Investors in the cryptocurrency market are often easily affected by emotions, such as panic and greed. Such emotions can easily lead traders to make irrational decisions, leading to liquidation.
5️⃣ Improper fund management: Many traders do not have a reasonable fund management strategy, which often causes them to suffer huge losses when the market fluctuates, leading to liquidation.
So how should we avoid liquidation? Uncle Bird gives some suggestions
1️⃣Be familiar with the market and assets: Understand the characteristics, price trends, and market sentiment of the cryptocurrencies you trade. This will help you make more informed investment decisions.
2️⃣ Develop a strategy: Establish a trading strategy that suits you, and fully test and adjust it before implementation. This can reduce unexpected events in actual transactions.
3️⃣Monitor and adjust: Monitor your trading situation regularly and adjust your strategy in time according to market changes.
4️⃣Control your position: Avoid excessive use of leverage, so that you can reduce losses even if the market changes suddenly.
5️⃣Fund management: Make sure your funds are liquid enough so that you have enough funds to deal with market fluctuations.
6️⃣Assess your risk tolerance: Before you start trading, assess your risk tolerance, which can help you make more reasonable decisions during the trading process.
7️⃣Keep learning and improving: Continuously learning and summarizing trading experience will help you make better decisions in future transactions.
You can take a good look at the above suggestions to avoid margin calls, but please note that cryptocurrency trading still has high risks, so please be cautious and remember to do a good job of risk control.
