Newbies entering the crypto world and engaging in futures trading are easily subjected to getting liquidated, mainly due to a lack of sufficient understanding of the high-risk characteristics of futures trading, as well as insufficient trading psychology and risk control abilities. Here are some key reasons and subsequent precautions to help you participate in futures trading more safely:

1. Why are newbies easily Get Liquidated?

1. High Leverage Abuse
· Newbies often mistakenly believe that "the higher the leverage, the faster the profits", but leverage is a double-edged sword. For example, with 20x leverage, a 5% price fluctuation can trigger a Get Liquidated; with 100x leverage, just a 1% fluctuation can wipe out the principal.
· Example: In 2021, when Bitcoin plummeted from $60,000 to $30,000, many retail investors using high leverage were forced to Get Liquidated within a few hours.
2. Lack of risk control
· No stop-loss set or blindly chasing highs and selling lows. For example, blindly adding margin during a bullish trend can quickly lead to larger losses once the trend reverses.
· Data Reference: According to statistics from Binance Research, 80% of futures trading newbies are liquidated in the first week due to not setting stop-loss.
3. Emotional Trading
· Frequent operations driven by fear and greed. For example, after a loss, one rushes to "make up for it" by doubling down, or becomes overly confident during profits and ignores risks.
4. Insufficient Market Awareness
· Lack of preparation for the high volatility of cryptocurrencies (e.g., Bitcoin's daily fluctuations often exceed 10%). At the same time, unfamiliarity with the "pinning" (short-term extreme price fluctuations) leads to the Get Liquidated mechanism.
5. Trusting the "master" calls
· Blindly following the recommendations of so-called KOLs or communities, while ignoring independent analysis, can easily make one a victim of market manipulation.

2. How to avoid getting liquidated? Key points to pay attention to.

1. Strictly control leverage
· Newbies are advised to use a leverage of ≤5 times and gradually increase their experience. For example, when trading Bitcoin, a leverage of 10 times is considered high risk.
· Strategy: First use low leverage to simulate market reactions, then adjust after getting familiar.
2. Forced Stop Loss
· Always set a stop loss point when opening a position (for example, stop loss if the principal loss is 2%-5%). For instance, if you open a long position on Bitcoin at 30,000 USD, you can set the stop loss at 29,500 USD.
· Tool Utilization: Use "Conditional Orders" or "Take Profit and Stop Loss Orders" for automated execution, avoiding emotional interference.
3. Position Management
· The position of a single trade should not exceed 5% of the total funds (for example, in a $10,000 account, a single trade should not exceed $500).
· Rule: Use the "pyramid adding method" to add positions in batches only after making a profit, not to average down during losses.
4. Continuous Learning of the Market
· Understand technical indicators (such as EMA, RSI) and on-chain data (such as exchange fund flows) to avoid trading based on intuition.
· Recommended tools: TradingView analysis charts, Glassnode on-chain data.
5. Simulated Trading and Review
· Practice for more than 3 months using a demo account (such as the demo trading features of Binance or Bybit), record each trade, and regularly review mistakes.
6. Beware of Market Risks
· Avoid opening high-leverage positions before and after major events (such as Federal Reserve interest rate hikes or exchange hacks). Pay attention to high volatility periods (such as when liquidity is low in the Asian early morning, which can easily lead to "spikes").
7. Psychological Construction
· Develop a trading plan and adhere to it strictly, avoiding frequent operations (day trading should not exceed 3 times). Pause trading after a loss, and re-enter the market after adjusting your mindset.

3. Additional Suggestions

· Fund Isolation: Only trade with idle funds (it is recommended not to exceed 10% of total assets), and do not borrow or use living expenses.
· Compliance and Security: Choose top exchanges (such as Binance, OKX), avoid using unregulated platforms, and guard against risks of Get Liquidated or exit scams.
· Long-term perspective: Futures trading is not a shortcut to wealth; it should be used as a hedging tool for spot trading or a short-term strategy. Prioritize mastering spot trading before engaging in futures.

4. Resource Recommendations

· Books: "Reminiscences of a Stock Operator" (Understanding Market Psychology), "Digital Currency Trading Guide"
· Data Platforms: CoinGlass (view Get Liquidated data, leverage popularity), Coingecko (project fundamental analysis)

Final reminder: The essence of Futures Trading in the crypto world is a zero-sum game, with 90% of retail investors suffering long-term losses. The key to survival is not making a one-time profit but maintaining continuous risk control. Before opening a position, ask yourself: "If there is a 50% adverse fluctuation, can I bear it?" Proceed with caution to retain your strength amid volatility.