How to avoid liquidation in contracts?
The simplest way is to set stop-profit and stop-loss or position by position.
When doing contracts, you must understand the principle of leverage multiples. Take Bitcoin as an example. For example, 10 times means that your funds are magnified 10 times and the margin is reduced 10 times. That is to say, you can open 10 lots originally, and you can open 100 lots after using 10 times leverage.
At this time, the problem comes. If you open 10 lots with 100 times leverage, as long as the market is not particularly extreme, you will basically not be liquidated. But if you open 100 lots with 100 times leverage. Then congratulations, you may be liquidated in the next second. The amount of profit in the contract is actually not related to your multiple.
Some people always think that if I open 100 times, as long as I can make a profit, then the amount of profit must be far more than 10 times leverage.
Your idea is completely wrong. The amount of profit is only related to your number of lots or sheets.
Whether you have 10x leverage or 100x leverage, as long as the number of lots you open is the same, your profits are the same. The so-called increased leverage is to improve your capital utilization rate, which is designed for those who want to get rich quickly.
For normal and stable investors, as long as you don't go all-in, understand the principle of leverage and your position control, then you can't blow up your position at all.
In fact, the most important thing about the contract is not leverage, nor is it the market point, but the position ratio. As long as you can allocate your funds, then the explosion does not exist for you at all.
