Why most people get liquidated
Five habits that end every account.
1. Max leverage by default. The slider goes to 40x, so people use 40x. At 40x a 2.5% move ends the trade. Nothing in crypto moves less than 2.5% in a day.
2. No stop loss. Without a stop, the only exit is liquidation. A stop at a 3% loss turns a wipeout into a scratch. Set it before you press the button.
3. Adding to a loser. Averaging down with more margin moves the liquidation price a little and the size a lot. You are now bigger in the trade that is already wrong.
4. Trading the news candle. Big news makes the book thin and the spread wide. Your market order fills badly, the mark whips, and the liquidation engine does not care that you were right ten minutes later.
5. Revenge after a loss. The trade right after a liquidation is usually bigger, faster and angrier. It is also the one that empties the account. Close the app for an hour.
The honest fix. Smaller size, lower leverage, a stop on every trade, and a rule for how much you can lose per day. Boring is what surviving looks like.
Academy · Lesson 20
Why most people get liquidated
1. Max leverage by default
The slider goes to 40x, so people use 40x. At 40x a 2.5% move ends the trade. Nothing in crypto moves less than 2.5% in a day.