So many people face liquidation every day, why do some still play?
Because of greed, because of poverty, because of ignorance, and even more so because they harbor dreams of getting rich overnight. Thus, more and more new investors are joining the big family of cryptocurrency contracts.
I suggest that everyone understand what cryptocurrency contracts are, what advantages and risks they entail, and whether they are suitable for themselves before engaging in virtual currency contracts. Those who have traded contracts may understand what I mean; even though they know all the trading rules, such as stopping losses and taking profits, when it comes to actual trading, they forget it all. When it’s time to stop losses, they don’t execute it, hoping to hold on through the situation, only to end up facing liquidation.
Contracts are played for the thrill of big gains and big losses; if the direction is right, one could become rich overnight, but if the trend is wrong, one could become poor overnight. Before deciding whether to enter the market, investors can first understand the pros and cons of contract trading. After considering various factors, they can make their decision.
I believe most old-timers in the cryptocurrency circle will have lingering fears when it comes to K-line 'pin bar' market. The so-called pin bar refers to a thin line on the technical chart, representing a sudden crash (or surge) in price followed by a rapid stabilization.
Assuming you opened a contract with 100x leverage, if the price drops momentarily by just 1%, your position will immediately liquidate, even if it later rises 1000 times, it won't matter to you anymore.
So sometimes investors find that despite having correctly identified the trend, their position is gone, simply because the price experienced a sudden spike (up or down) at some moment, directly opposing their trading direction, leading to liquidation.
Of course, can contracts really be traded? The answer is definitely yes. Existence is reasonable. However, before trading contracts, ask yourself if you have made sufficient psychological preparations?
Learning to establish a trading system that suits you can make you more confident during the trading process, easier to execute, and more willing to adhere to trading discipline. This way, your mindset will be better, making it easier to make the right decisions.
A good trading system usually includes several important factors: how to stop losses, how to take profits, managing the profit-loss ratio, how to control position sizes, how to manage trades, and how to reasonably control leverage, among others. Each investor's trading system may be different, so they should summarize a set of trading principles based on their own experiences that they can execute consistently. Only when one is sure they are prepared can they enter the contract market.