Understanding liquidations in cryptocurrencies and how to avoid them

The cryptocurrency market can be highly volatile, and liquidation is a common phenomenon. For example, in just 60 minutes, $310 million has recently been liquidated. Why does this happen? One important reason is that many traders lack the knowledge and skills needed to trade successfully. Influenced by Instagram, TikTok, or YouTube traders showing off huge profits, they often believe they can replicate those results without understanding the associated risks. Here's the hard truth: many influencers have solid strategies, know when to enter and exit trades, and are experienced in risk management. Inexperienced traders, on the other hand, rush in blindly, motivated by emotion or greed, leading to costly mistakes and widespread liquidation. How to Avoid Liquidation: Key Lessons Strategically lock in profits Don't be too greedy. If your trade reaches the first take profit level (TP-1), secure some profit instead of waiting for all targets to be reached. Partial profit locking reduces risk and ensures you don't leave empty-handed if the market reverses. Risk Management Practices This is the platform for successful trading. Only allocate 5-10% of your capital for each trade. For example, if you have $100 in your account, only trade with $5-10. Excessive leverage or trading with your entire investment portfolio will increase the risk of losing everything in one bad trade. Patience and discipline. Trading is not a get-rich-quick scheme; It's a skill that requires patience and consistency. Chasing big wins with reckless trades is like gambling, not investing. Aim for small, stable returns over time. Why patience is important Think about your job—you have to wait 30 days to get paid. Similarly, in trading, waiting for the right opportunities is necessary. Losing everything in just one day leaves you with no capital to trade tomorrow. Protect your money and trade with a long-term perspective. The dilemma of stop-loss order One of the biggest mistakes traders make is holding losing trades, hoping for a reversal, while closing profitable trades prematurely out of fear. This mindset is counterproductive. Cut loss early: Use stop-loss orders to limit losses. Accept small losses when trading does not go as expected instead of letting them become significant failures. To increase profits: When your trades are profitable, adjust your strategy to maximize profits instead of exiting too early. Final thoughts Cryptocurrency trading is not about making quick money. It's about making smart, calculated decisions. Without patience, discipline, and proper risk management, you might fail in this market. If you find it difficult to adhere to these principles, trading may not be the right path for you. Always stay updated, trade responsibly, and prioritize the protection of your capital. Success in trading comes from continuous learning and disciplined approach, not from chasing shortcuts. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)