"How to effectively prevent liquidation in contract trading"
In the contract trading market where risks and opportunities are intertwined, liquidation is a nightmare for investors. However, with reasonable strategies and strict self-management, the risk of liquidation can be greatly reduced.
It is extremely important to pay close attention to the violent fluctuations in the market. When the market is extremely unstable and the long and short positions are fierce, you should actively avoid it. At this stage, there is not only the risk of technical failure of the exchange, but also the possibility of sudden and large price fluctuations. If you participate, you must keep a small position and control potential risks. At the same time, set a stop loss position. If the price falls to a certain extent, stop loss decisively to prevent losses from expanding.
You need to be highly vigilant about the phenomenon of altcoins with no volume. Especially at the end of the rising market, when mainstream currencies such as Bitcoin are close to the top, altcoin bulls are prone to concentrated selling and causing prices to plummet. Such situations are difficult to predict and extremely risky. You should avoid altcoins with insufficient trading volume, and set a stop loss point in advance, and execute the stop loss when it is reached.
It is also important to establish a clear trading logic and set a reasonable maximum retracement ratio. For example, set the maximum retracement to 50%, and resolutely stop trading when the loss reaches this ratio to avoid liquidation. It is not easy to grasp the degree of trading, and continuous practice and summary are required.
Scientific asset allocation is the key to reducing risks. When the profit reaches a certain multiple, timely withdrawal is required to lock in the profit. In the early stage, it is difficult to distinguish whether the profit depends on luck or strength. It is the best policy to ensure the safety of profit, and then roll over small funds to accumulate experience and wealth. In the transaction, set the stop loss amount or ratio reasonably according to your own risk tolerance and market conditions.
