Patryk1205

How can retail investors avoid the risk of getting liquidated in Contract Trading?
The key to avoiding liquidation risk for retail investors in Futures Trading is as follows:
1. Reasonably control position size
Light position operation: avoid heavy positions, it is recommended that a single transaction should not exceed 1%-5% of the total funds, in order to reduce the risk brought by market fluctuations.
Diversify your investments: Do not concentrate all your funds in one trading pair. Diversifying your investments helps to reduce risks, but at the same time, the positions should not be too scattered or too many different varieties.
2. Set Stop Loss
Strict Stop Loss: Set a stop loss before each trade to avoid expanding losses. Stop loss should be set reasonably based on market volatility and personal risk tolerance.
Move Stop Loss: Adjust the stop loss gradually as the profit increases to lock in some profits.
3. Avoid high leverage
Use leverage cautiously: While high leverage can amplify profits, it can also increase the risk of Get Liquidated. It is recommended for beginners to use low leverage (such as 2-5 times) and gradually accumulate experience.
Adjust leverage according to market conditions: reduce leverage and minimize risk during periods of high volatility.
4. Maintain sufficient margin
Maintain Sufficient Margin: Ensure that your account has enough margin to avoid liquidation due to market fluctuations.
Monitoring Margin Ratio: Real-time monitoring of the margin ratio, timely adding margin or reducing positions.
5. Rational Trading
Avoid emotional trading: do not make impulsive decisions due to market fluctuations or emotions, stay calm.
Develop a trading plan: plan trading strategies in advance, strictly adhere to them, and avoid impulsive actions.
6. Continuous Learning
Improve trading skills: continuously learn market analysis, technical indicators, and other knowledge to enhance trading abilities.
Replay Summary: Regularly review trades, analyze reasons for success and failure, and optimize strategies.
7. Pay Attention to Market Risks
Pay attention to market dynamics: pay attention to news, policies and other factors that may affect the market, and adjust strategies in a timely manner.
Avoid trading in extreme market conditions: reduce or suspend trading during volatile market fluctuations to prevent unexpected losses.
8. Use Take Profit
Set take-profit targets: After reaching the expected profit, timely close positions in batches to lock in profits. Set stop-loss for the remaining positions and consider a larger scope to avoid being greedy and giving back profits.
9. Choose a reliable platform
Choose a reputable exchange: Ensure platform security and reliability to avoid losses due to platform issues.
10. Keep a good mindset
Accepting Losses: Losses are part of trading. Stay calm and avoid letting losses affect your subsequent operations.
Summary:
Retail investors in Futures Trading should reduce the risk of getting liquidated through light positions, stop-loss orders, low leverage, sufficient margin, rational trading, and continuous learning and attention to market dynamics. If you want to learn more, follow Sister Xingfu and tune in to her live broadcast every Monday to Friday at 8:30 am for insights!