In the last 100 minutes, the cryptocurrency market saw $275 million in liquidations. Why does this happen? The main reason is that many traders lack the necessary skills and knowledge. They often follow influencers on platforms like Instagram, TikTok, or YouTube, who boast about huge profits, thinking they can replicate the same results without a solid plan.
Hereās the truth: those influencers likely have a clear strategy, including precise entry and exit points. Unfortunately, most new traders jump into the market blindly, chasing quick profits, which leads to costly mistakes and eventual liquidations.
How to Protect Yourself from Liquidations:
1. Secure Profits Gradually: Once your first take-profit target is reached, lock in some profits. Relying on hitting every target is risky. Taking partial profits ensures you protect what you've gained while remaining in the market.
2. Practice Effective Risk Management: Avoid over-leveraging or over-trading. If your portfolio is $200, only risk 5-10% of it per trade. With 2-3 trades, you can grow your account steadily without exposing yourself to excessive risks.
3. Focus on Patience and Consistency: Trading is not about gambling. Itās about making thoughtful, strategic decisions. Smaller, consistent profits are far better than chasing unrealistic returns with impulsive trades.
The Importance of Patience: Consider thisāwhen working a job, you wait for your paycheck for 30 days. Why not apply the same patience to trading? If you lose your capital today, youāll have nothing to trade tomorrow. Protecting your funds is crucial for long-term survival in trading.
Stop-Loss: Your Trading Safety Net One of the biggest mistakes traders make is holding onto losing positions, hoping theyāll reverse, while quickly closing profitable trades out of fear. This approach is flawed and can lead to large losses. If a trade goes against you, accept a small loss and move on. Itās better than letting it escalate into a major hit. Always use stop-losses to limit potential losses and protect your capital.
Final Thoughts: Trading isnāt about luckāitās about disciplined, calculated decision-making. If youāre not ready to commit to risk management, patience, and discipline, trading may not be for you. Invest time in learning, manage your trades wisely, and focus on building long-term financial security. Protecting your capital today ensures more opportunities tomorrow. Stay safe and trade smart.
